Hanson pins hopes on US to stop profits fall

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The Independent Online
Hanson held out the prospect of improved results on the back of a recovering US economy when it announced a 28 per cent fall in pre-tax profits in the three months to 30 June.

Lord White, chairman of Hanson Industries, said: 'Economic conditions in the US are improving slowly and we continue to seek acquisition opportunities.'

Martin Taylor, a Hanson director, said the group's US timber and consumer businesses, including Jacuzzi, were doing well, coal was benefiting from a cool summer and the quarries were beginning to see extra spending on roads.

In the UK, the engineering businesses and Imperial Tobacco had seen improved demand but building materials - the company owns London Brick - were 'no better than you would expect'.

Third-quarter profits fell from pounds 379m to pounds 274m before tax and earnings per share were down from 6.1p to 4.7p. The company has prided itself on its record of steady increases in earnings.

It said the underlying fall in the third-quarter profits was only 5 per cent. The 1991 figures were boosted by the inclusion of a pounds 127m profit on the disposal of part of Consolidated Gold Fields and the 1992 result was depressed by exchange rate movements.

In the latest three-month period there was an extraordinary profit of pounds 144m on the sale of British Ever Ready and a 2.8 per cent stake in ICI, sold in June after almost a year.

Mr Taylor said profits on disposals were included in pre-tax results in 1991 because this was consistent with the policies adopted by Consolidated Gold Fields before Hanson acquired it. But the 1992 profit on the disposal of Ever Ready was excluded from the pre- tax result, in line with the group's normal accounting policies.

The third-quarter result took profits for the nine months to 30 June to pounds 762m before tax, down from pounds 967m on sales of pounds 6.11bn, up from pounds 5.82bn.

Tax took only 18 per cent of profits, whereas it accounts for about 30 per cent of most quoted companies' profits. The tax charge was reduced by the effect of introducing quarterly dividends. Mr Taylor said the tax charge would revert to Hanson's normal level - about 23 per cent - next year.

The third-quarter dividend is 2.75p a share and the company repeated its promise to pay not less than this each quarter.

The shares rose 3p to 195.5p. Mr Taylor said the company was looking for acquisitions in the US, the UK and on the Continent.