Hanson vows to build on success

BUILDING materials group Hanson pledged to continue the cautious approach that has led to a 10% rise in underlying profits.

The improvement was driven by Hanson's American building materials division after mild weather at the end of last year boosted its performance. But London-based Hanson has also adopted a 'back to basics' policy with a tighter focus on costs and margins.

Chairman Christopher Collins indicated the tactic was likely to continue: 'In the current economic climate, it is particularly difficult to predict the outlook so early in the year. We will continue to adopt a cautious approach, maintaining our back to basics disciplines.'

Earlier this week, Hanson heightened its focus on core businesses by selling its under-performing continental bricks operation for £39m. Figures show pre-tax profits before one-off items rose to £351m in 2001 from £318.6m a year earlier.

Hanson's European building materials division relied on the UK for 90% of its profits as turnover rose to £1.46bn from £1.21bn. Profits before exceptional items within the division improved from £121.6m to £133m.

UK brick volumes increased by 1% during the year because of buoyant demand for products in the repair, maintenance and improvement sector. However, Hanson said there was a decline in sales of products to a slower housebuilding market.

The company pledged to continue to improve margins and reduce costs at its European operation, although this will not be achieved through widespread redundancies.

Hanson said it would also benefit from the Government's £180bn, 10-year transport infrastructure programme: 'The outlook for UK demand for aggregates, asphalt and ready-mix concrete is expected to be stable.'