Steetley stimulus lifts Redland in first half

THE acquisition of Steetley added pounds 15m to Redland's operating profits, helping it to a 12 per cent increase in the first half of the year.

Redland said the cost-savings are now running at more than pounds 30m on an annualised basis. Gerland Corbett, finance director, said there should be more to come both in UK bricks and French aggregates.

Gobitta, the French aggregates business, had been the 'major disappointment' and had been in a far worse position than expected. For example, it had pounds 45m of leases for office and other equipment, which meant the total debt was larger than expected.

In total, Redland has cut 800 of Steetley's 10,000 employees and a further 200 will lose their jobs by the year-end. Further losses in France are likely next year. The major changes have been in the UK, where 11 brick plants have been permanently closed, saving pounds 10.8m, and the two groups' aggregates businesses have been merged, saving pounds 7.4m.

Redland has written down the value of Steetley's Spanish aggregates business, its US brick interests and Gobitta, but it also revalued some aggregates and clay reserves. Rationalisation provisions will be about pounds 60m, which means the net effect will be to cut Steetley's net assets, shown as pounds 330m at the beginning of the year, by about pounds 30m.

The group's pre-tax profits rose from pounds 78.8m to pounds 88.5m. The figures also benefited from the sale of land for waste disposal sites, which brought in pounds 7m compared with pounds 4m the previous year.

At the operating level, profits were pounds 15.4m higher at pounds 95.2m while net interest payable rose from pounds 1m to pounds 6.7m, largely because it took on pounds 307m of Steetley's debt. This was largely bank borrowings and has now been refinanced, saving pounds 5.5m.

Earnings per shares fell from 13.6p to pounds 11.6p, reflecting dilution from the pounds 260m rights issue last April.

But the group has backtracked on the dividend promise made with the acquisition. Then, it said that the full year dividend would be increased. Now, it says that 'adverse conditions' mean it will be maintained at 25p. The interim was held at 8.25p.

Analysts are split over whether it will cut the dividend in 1993. Andrew Melrose at Nomura, who is expecting pounds 195m profits this year and next - giving 23p of earnings in 1993 - believes the group may be forced to cut to 16p. But Mark Stockdale of Warburg Securities, who expects pounds 210m profit this year, thinks it may be held.

Redland's shares fell 19p to 343p.

Emma Watson has become the latest target of the 4Chan nude hacking scandal
peopleThreats follows actress' speech on feminism and equality at the UN
Life and Style
food + drink
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
Life and Style
Arts and Entertainment
Geena Davis, founder and chair of the Geena Davis Institute on Gender in Media
Alan Bennett criticised the lack of fairness in British society encapsulated by the private school system
peopleBut he does like Stewart Lee
John Terry, Frank Lampard
footballChelsea captain sends signed shirt to fan whose mum had died
Arts and Entertainment
Rita Ora will replace Kylie Minogue as a judge on The Voice 2015
Life and Style
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
Arts and Entertainment
Tennis player Andy Murray's mum Judy has been paired with Anton du Beke for Strictly Come Dancing. 'I'm absolutely delighted,' she said.
tvJudy Murray 'struggling' to let Anton Du Beke take control on Strictly
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
David Moyes and Louis van Gaal
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

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits