Exchange rate averaging boosts RMC

RMC gave last year's profits a pounds 20m boost yesterday by translating its overseas earnings at average exchange rates rather than using the pound's sky-high year-end value. The ready-mixed concrete and quarrying group said it was one of the last companies in the FTSE 100 index to make the move although it admitted its decision had been influenced by the extreme volatility of the foreign exchange markets last year.

Even using the new accounting method, RMC announced a sharp fall in profits, from pounds 324.9m to pounds 295.3m, after a slump in Germany, which traditionally provides more than half the company's profits but was hit last year by a slowing economy and poor winter weather in the first half. RMC shares closed 7.5p lower at 993.5p, well below the peak of pounds 11.95p reached last September.

Peter Young, chief executive, said he expected further falls in volumes this year in Germany although at a slower rate than last year which saw reductions of up to 9 per cent. Profits in Germany tumbled from pounds 187.5m to pounds 139.6m, mirroring the large drop in German profits announced recently by Redland, the other British construction materials company with a large exposure to that country.

RMC has reduced its 12,000-strong German workforce by about 1,400 in the past 18 months to cope with the first reduction in sales volumes in the former eastern states since re-unification and the challenge of cheap concrete imports from Poland.

On the old translation basis RMC's figures were at the top end of analysts' expectations as weakness in Germany and France was offset by strong performances from American and Israeli operations. Profits of pounds 275.8m compared with expectations of as low as pounds 250m, struck from flat turnover of pounds 4.08bn. Earnings per share fell from 80.3p to 68.9p, but the company's conservative dividend cover meant the payout could still be increased by 6 per cent to 26.5p.

At home profits fell slightly to pounds 72.8m (pounds 76.8m) as the construction industry continued to struggle against a lack of significant recovery in the new housing market, government cutbacks in finance for new roads and slower progress than hoped for on the private finance initiative.

Mr Young called on the next government to reverse Britain's consistent under-investment in infrastructure spending, which he said had created a construction industry in this country only one third the size of that in Germany. The industry represented only 8 per cent of gross domestic product in Britain compared with 12 per cent of a larger economy in Germany and 15 per cent in Spain.

"There are no votes in putting anything right in this country," he said. "There will be in 10 years when the whole place is gridlocked; by then it will take another 20 years to catch up."

Describing the UK attitude to public sector construction as "a morass of mis-information", he called on the Government to settle on a transport policy that would include road and rail. He said, however, he had little confidence that such a policy would emerge.

RMC said it would be interested in acquiring the French aggregates operations recently put up for sale by Redland, but doubted whether its British rival was yet realistic about the price a bidder would pay.

Investment column, page 26

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss