Aggregate boosts dividend despite ongoing troubles in US

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The Independent Online

Aggregate Industries, the quarries and ready-mix concrete group, unveiled a surprise 10 per cent rise in its interim dividend yesterday in a move designed to show nervous investors that it believes its fortunes will recover strongly in the second half of the year.

The company, which has one-third of its business in the US, is struggling to recover after freak weather conditions hampered its customers in the US construction industry. Group profits in the first-half were £40.2m, 3 per cent lower than in the same period last year, after operating profits in the US fell 62 per cent.

Peter Tom, the chief executive, still insists that sales had been delayed rather than lost. The company is expecting full-year profits from the US, in dollar terms, to be the same as last year. Mr Tom said: "We don't expect customers in the majority of our US regions to work until April. This year on 4 April there was a massive snowfall on the East Coast, followed by a miserable month. There was more snow than normal in Colorado, too. The first clear seven days with no rain was not until mid-June. So there is a big, pent-up backlog of work and June was a record month for us."

Investors responded well to the increased dividend, which was portrayed as an expression of management confidence in the second-half performance. The payout is being raised to 1.13p. Aggregate's shares ended up 3p at 85.75p.

The UK market continued to be buoyant and Mr Tom welcomed the Government's commitment to a massive new road-building project that will support sales in the medium term. More recently, Aggregate's business has proved most resilient in the Midlands, the North of England and Scotland.

Mr Tom said: "Pretty well every major city in the UK is building on the sites of old factories and warehouses, creating attractive bars, restaurants or apartments. The beauty of it is that they are all funded by different funding bodies, so we are not at the mercy of government, local government or one big contractor."