Hanson sets aside £100m for pensions

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The Independent Online

Hanson, the building material group, revealed it is to plough £100m into its pension funds, as it reported a 16 per cent fall in interim profits.

Hanson, the building material group, revealed it is to plough £100m into its pension funds, as it reported a 16 per cent fall in interim profits.

The company said however that its financial position was strong, reflected in a 10 per cent rise in the half-year dividend and that the second half should prove more "resilient". Hanson blamed poor weather, higher pension costs and adverse exchange rate movements for the drop in interim profits. Volumes of aggregate sales declined 6 to 9 per cent in major markets.

Jonathan Nicholls, finance director, said: "We had a pretty tough winter in the US for the first time in five years. That's been compounded by a wet spring."

He said that concrete and aggregates could not be produced in bad weather. Underlying pre-tax profit was down 16 per cent at £148.8m, for the year ended 30 June. While that counted a £12m pension charge, the figures did not include the £100m the company said was necessary to plug the deficit, in its US and UK retirement schemes, over the next two years. Hanson is currently seeking the agreement of the pension fund trustees over filling the short-fall.

Hanson took a $64m (£40m) charge to cover the costs of asbestos-related litigation. The company is linked with supplying products in the past containing the potentially deadly material. This bolsters the group's asbestos reserves to $320m. The number of outstanding claimants is 118,700.

The US market accounts for almost half of Hanson's turnover and the company said an improving trend for aggregates demand signalled a better second half.

US aggregates volume in the first quarter was down eight per cent from a year earlier, but this slowed to a 3 per cent fall in the second quarter and was set to rise in July.

Simon Brown, analyst at Williams de Broe, said: "There are clearly big order backlogs in the States and that should come through in the second half."

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