McAlpine warning as profits double

ALFRED MCALPINE, the civil engineer and housebuilder, yesterday said the group would be hit by Government curbs on new road building as it announced a doubling of pre-tax profits to pounds 24.1m.

Oliver Whitehead, the group's chief executive, warned its civil engineering business would suffer from falling sales as the Government went ahead with cuts to new road building. He said the group was moving into projects in the water sector, and road and rail maintenance to offset the decline.

Alfred McAlpine doubled pre-tax profits in 1997 after buying Raine, a rival housebuilder, for pounds 42.6m. McAlpine said the homes division, which has so far missed out on a housing boom in the South-east, was set to benefit as the boom spread.

The company sold 2,674 homes last year against 1,688 in 1996. Its housing arm made an operating profit of pounds 22m.

The company exited the construction market two years ago but still conducts special projects such as building football stadia. It is now close to completing Huddersfield Town football stadium and will this year start building a 25,000-seater stadium at Wigan Football Club.

Shares in McAlpine rose 5p to 176p, valuing the group at pounds 207.7m. Mr Whitehead said he would sell the group's loss-making US businesses "if the right offer came along". Blythe Construction and Becker Minerals, which make up 15 per cent of McAlpine's turnover, have been beaten to big road contracts by rival US companies.

"It's no secret these activities do not form part of the group's long- term plans, but there is no 'for sale' sign hanging over them," Mr Whitehead said.

Profits at the US division fell last year by 22 per cent to pounds 2.85m on sales of pounds 99m.

Investment column, page 24