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
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Day In a Page

War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life
Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

Election 2015: A dead heat between Mr Bean and Dick Dastardly!

Lord Ashcroft reveals latest polling – and which character voters associate with each leader
Audiences queue up for 'true stories told live' as cult competition The Moth goes global

Cult competition The Moth goes global

The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

Pakistani women come out fighting

Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
Leonora Carrington transcended her stolid background to become an avant garde star

Surreal deal: Leonora Carrington

The artist transcended her stolid background to become an avant garde star
LGBT History Month: Pupils discuss topics from Sappho to same-sex marriage

Education: LGBT History Month

Pupils have been discussing topics from Sappho to same-sex marriage
11 best gel eyeliners

Go bold this season: 11 best gel eyeliners

Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
Cricket World Cup 2015: Tournament runs riot to make the event more hit than miss...

Cricket World Cup runs riot to make the event more hit than miss...

The tournament has reached its halfway mark and scores of 300 and amazing catches abound. One thing never changes, though – everyone loves beating England
Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

Katarina Johnson-Thompson: Ready to jump at first major title

After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot