Hanson suffered a sharp drop in brick sales in the UK, but the building materials group was rescued by a strong performance from its US operations, which enabled it to post better-than-expected profits yesterday.
Soaring energy costs and a slowdown in the DIY market more than halved profits at Hanson's British building products business and forced it to shut two brick-making plants this year, with the loss of 125 jobs. Brick volumes were down 19 per cent in the first half of the year, while higher energy costs added £50m to Hanson's fuel bill.
The company admitted the market had been bad for 12 months, with fewer people building extensions. The group has also been hurt by a trend away from building houses to putting up blocks of apartments, which use fewer bricks, though the group finance manager Nick Swift said this was a temporary phenomenon.
Group pre-tax profits from continuing operations climbed 12 per cent to £194m in the half. Mr Swift said: "The US is a great engine of growth for us and we have a lot of firepower [to make acquisitions]. The UK had a tough time on bricks but will come back."
Hanson gets a third of its business from the UK and about half from America, where it raised prices by 12 per cent for aggregates (gravel and sand) and building materials to offset energy costs. In Britain and Australia it raised prices by around 6 per cent.
Hanson wants to double the size of its US business and spent £540m buying up 12 smaller rivals in the first half, with further deals expected in the second half.
The group remains embroiled in lawsuits related to asbestos, which it inherited from acquired businesses and are costing it £15-20m a year. Mr Swift said it was small beer as Hanson generates £500m of cash annually but admitted asbestos claims would dog the company for the next 20 years. It is also suing its insurers for additional asbestos cover.Reuse content