RMC looks poised to sell Great Mills DIY chain

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The Independent Online

RMC Group, the cement and concrete maker, is believed to be ready to sign a deal to sell its do-it-yourself chain Great Mills, possibly as soon as today.

RMC Group, the cement and concrete maker, is believed to be ready to sign a deal to sell its do-it-yourself chain Great Mills, possibly as soon as today.

Analysts said that Focus Do It All, the fourth-biggest DIY chain, owned by Duke Street Capital, was a probable suitor in the talks, which RMC yesterday admitted were at an "advanced stage".

However, one analyst said: "The fact that they are still quoting their price range for Great Mills as up to £300m suggests they have had quite a few options. There were lower expectations in the City and we expected them to bring their range down."

RMC yesterday also issued a progress report on its cost-cutting review, started in July to combat harsher business conditions in its core non-UK markets of the United States and Germany. The company had already said 1,000 jobs would be cut from operations worldwide, with 170 coming from UK and 400 from German operations.

RMC revealed for the first time yesterday that the cost-cutting project, which also involved selling businesses in Indonesia and Florida and streamlining other operations, would cost £60m, which will be charged to the profit and loss account in 2000.

An RMC spokesman said: "We are ahead of ourselves. We said the review would lead to savings of £40m a year, but now we are estimating it will be £50m and that the results will be seen from January 2001."

Analysts questioned whether the measures would be enough to combat tough trading in the world cement market. Mike Betts of JP Morgan said: "I am not sure if I regard the strategic review as a one-off event. If the markets continue to be difficult in Germany and the US and that extends to the UK, we may well hear that there will be another review."

RMC shares rose 18p to 610p.

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