Redland to create European tile giant


City Editor

Redland yesterday announced plans for a radical overhaul of its building materials operations that will create Europe's largest roof tiles manufacturer with sales of DM3bn (pounds 1.33bn). Details of the deal, which will involve a merger of its own interests with those of its successful German subsidiary, Braas, are likely to be unveiled within the next few weeks.

Robert Napier, chief executive, also said negotiations were at an advanced stage with four potential buyers of its UK bricks arm. In addition, discussions are in train to sell Redland's US brick operations, which will complete a reversal of the company's expansion in bricks early in the 1990s when it bought rival Steetley. Mr Napier admits now that Redland overpaid for that deal.

The ambitious deal with Braas comes as that company's core German activities face a rapid slowdown in construction activity. The underlying weakening in trading has been exacerbated in the early months of 1996 by poor weather across Europe, and Redland warned that first-half profits will not match those achieved in 1995.

Although Braas has given Redland exposure to the recent post-unification building surge in Germany, recession is taking its toll and Redland believes now is the right time to simplify the relationship between the two companies and reduce duplication of investment.

The shape of the proposed deal is still uncertain, but it is understood that Redland will inject its tile businesses, based in the UK, France, Spain and the Low Countries, into Braas, which focuses further east, in exchange for a mixture of cash and Braas shares.

Currently Redland owns 50.8 per cent of Braas and it is thought that the German company's minority shareholders are prepared to see that stake rise to about 60 per cent. A newly named company will be created, probably headed by a Braas-nominated chairman and with a board of directors taken from both Braas and Redland.

News of the restructuring accompanied full-year figures which underlined the difficult trading conditions facing Redland last year. Pre-tax profits before exceptional items fell 5 per cent to pounds 355.1m (pounds 373m), which Mr Napier said represented a strong management performance in the face of volume falls in most of its markets of up to 10 per cent. Price rises in line with inflation were pushed through and cost-cutting largely offset the volume-induced margin fall.

The reported profit figure of pounds 273.2m was hit further by an pounds 81.9m exceptional charge, mainly made up of book value write-offs at Genstar, Redland's aggregates operation in Maryland. A maintained final dividend of 11.2p, following the interim reduction, resulted in a full year total of 16.7p (19.4p).

In the UK, where Mr Napier said "the phones stopped ringing last March", volumes of sand, gravel, dry stone and ready mixed concrete all fell by more than 10 per cent. Higher prices offset much of the damage but the weaker housing market also hit brick demand, leading to a fall in UK profits from pounds 41m to pounds 35.2m.

Germany, the dominant profit contributor, saw an 11 per cent fall in DM profits, although currency movements limited the fall to pounds 3.6m, down to pounds 191m.

Start your day with The Independent, sign up for daily news emails
peoplePair enliven the Emirates bore-draw
Arts and Entertainment
tvPoldark episode 8, review
Britain's opposition Labour Party leader Ed Miliband (R) and Boris Johnson, mayor of London, talk on the Andrew Marr show in London April 26
General electionAndrew Marr forced to intervene as Boris and Miliband clash on TV
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions