Investment: Rugby's pounds 250m sell-off permits Scancem bids

RUGBY, Britain's third-biggest cement producer, is to use the proceeds of a pounds 250m disposal programme to bid for assets in Scancem, the Nordic building materials giant.

The UK group yesterday pleased the City with radical plans to sell all its joinery and materials businesses to focus on cement and lime operations.

Rugby said it was in advanced talks with Jeld-Wen, a private US company, over the sale of its US, UK and Australian joinery companies, which make doors and windowframes, and its US distribution subsidiary. The disposals are likely to net Rugby over pounds 250m. They will involve the loss of pounds 700m of sales, 70 per cent of group turnover.

The chief executive, Peter Johnson, said the sales would help Rugby make inroads into the global cement market. "The cement industry is like a jungle and you cannot go into the jungle with one eye on the joinery business," he said.

Funds raised will enable Rugby to participate in the auction for Scancem, owner of Castle Cement, the second-ranked UK cement maker. The Scandinavian company is being sold by its joint owners, Skanska of Sweden and Aker of Norway. The sale has attracted interest from European building materials groups, including CRH of Ireland, France's Lafarge and British group RMC.

Analysts believe Rugby will not be able to buy the whole group, but could bid for its east European assets. Scancem owns firms in Finland, the Baltic States and Poland, which fit with Rugby's Polish business.

The UK company could also buy parts of Castle Cement, although buying the entire group would be blocked on competition grounds.

News of the sales and potential purchases overshadowed Rugby's 1998 results. The group posted a small increase in operating profit to pounds 76.9m on sales down 4 per cent to pounds 1.02bn.

Analysts said the restructuring raised the chance of a bid for Rugby. "[After the disposals] they are a very tidied-up company. If there is a predator, Rugby is doing all the dirty work for them," said David Taylor of Teather & Greenwood.

After the sale of Castle Cement, Rugby will be the only large UK cement producer available to buy. It could attract European giants such as Lafarge and CRH, believe analysts. Profit forecasts for 1999 and the p/e ratio are now academic, but given the bid prospects Rugby's shares, up 2p to 113p yesterday, are a good speculative buy.

Start your day with The Independent, sign up for daily news emails
Life and Style
love + sex
Voices
A propaganda video shows Isis forces near Tikrit
voicesAdam Walker: The Koran has violent passages, but it also has others that explicitly tells us how to interpret them
News
people
Sport
football
ebooks
ebooksA special investigation by Andy McSmith
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

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 ...

Christine McCleave: FP&A Analyst

£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

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
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
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
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
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all