French losses and strong pound cost Redland dear
Friday 28 March 1997
The poor figures were expected by the City, however, and Redland's shares, barely more than half their level three years ago, recovered 6.5p to close at 360p last night.
Robert Napier, chief executive, promised a resolution of its problems in France, where Granulats, the aggregates and road surfacing contractor bought as part of 1992's disastrous Steetley acquisition, continues to haemorrhage cash. Redland is talking to a number of potential purchasers of the business, which slipped into the red last year, and expects to announce a deal before the summer.
Pre-tax profits before exceptional items plummeted from pounds 355m to pounds 259m in the 12 months to December, a year of great strategic change at Redland in which it merged its European roof tile operations with those of associate Braas and sold its brick business to Ibstock.
After a goodwill write-off on the brick sale of pounds 75m, reported profits emerged at pounds 200.9m (pounds 273.2m). The strength of the pound cost Redland pounds 7m in the year and Mr Napier said that if the results had been translated at today's exchange rate they would have been pounds 25m lower.
Earnings per share were 21.6p (30.6p), allowing a same again full-year dividend payout of 16.7p. Redland cut its dividend from 25p in 1994 after years of struggling to maintain the payout following its pounds 1bn acquisition of Steetley, a deal the group admits it overpaid for.
Redland denied speculation yesterday that the imminent sale of its French operations would herald further asset sales or even a break-up of the group. Mr Napier said, "We believe we can create value for shareholders through the actions we have already implemented, including the consolidation of our building interests in Germany and the proposed sale of Granulats."
Analysts have put a break-up value of between 355p and 415p on Redland, which Mr Napier said was not sufficiently higher than the current share price to warrant the expense of a demerger. The decision to sell the French businesses follows a difficult year in which the operations reversed a pounds 10m profit into an pounds 8m loss. Around 360 jobs were lost at Granulats in the year and total employee numbers have fallen from 4,000 four years ago to about 2,500.
Net assets in France amount to about pounds 310m, but analysts remain sceptical about Redland's chances of realising much more than about pounds 240m for the businesses.
Wellcome Image Awards: The most striking images from the world of science, including breast cancer cells under chemical attack and a photographer’s own kidney stone
Missing Malaysia Airlines plane: Terrorism explanation 'cannot be ruled out', says CIA
Bob Crow death: 'Admired by his members, feared by employers' - Tributes pour in for RMT union leader and 'working class hero' Bob Crow
Oscar Pistorius murder trial: Athlete repeatedly sick as court hears 'graphic details' of Reeva Steenkamp's post-mortem
How climate change helped Genghis Khan: Scientists believe a sudden period of warmer weather allowed the Mongols to invade with such success
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Poor 'live like animals' says Boris's privately educated sister after going on 'poverty safari'
Exclusive: Impact of immigrants on British workers ‘negligible’
Vince Cable: Teachers 'know absolutely nothing' about the world of work
Ukraine crisis: Russia pledges to 'retaliate against sanctions' as Ukrainian president says Crimea vote will not be recognised
The quiet diplomat: Catherine Ashton - recognised and admired in all the world’s troubled countries, yet ridiculed at home
- 1 Bad cattitude: Family call police after crazed and 'hostile cat with a history of violence' attacks baby before attempting to 'flee custody'
- 2 Family forced to flee home after discovering 'terrifying' nest of spiders in bananas
- 3 First Kiss: Filmmaker gets 20 strangers to make out on YouTube with awkward results
- 4 Grace Dent: Who cares if she spells it Barraco Barner? Gemma Worrall is more employable than some bookish arts graduate
- 5 Bob Crow death: 'Admired by his members, feared by employers' - Tributes pour in for RMT union leader and 'working class hero' Bob Crow
iJobs Money & Business
£1000 per month: Inspiring Interns: The company works with Tier 1 FTSE 100 Ban...
£35000 - £60000 per annum + Bonus + Benefits: Pro-Recruitment Group: You must ...
£60000 - £80000 per annum + BONUS + BENEFITS: Harrington Starr: A top, City ba...
VOLUNTARY ONLY - EXPENSES REIMBURSED : Reach Volunteering: Fantastic opportuni...