Hanson double blow to profits

A RISING pensions bill and the weak dollar have hit profits at construction materials giant Hanson.

In a trading statement ahead of half-year results due on 28 July, the group said it anticipates a fall in pre-tax profits for the six months to 30 June.

In the same period last year it made £120.6m. Hanson's shares dived 10 1/4p to 388p on the news.

Higher pension costs and the slide in the dollar have cost the group about £5m each, Hanson said, adding that without these two factors it would have expected to report a slight year-on-year improvement in first-half profitability.

Looking ahead to the full-year, it said it continued to anticipate 'some improvement' compared with last year.

Performance in its UK operations has been disappointing due to weak demand for road building and lower construction activity in the South and the Midlands.

Hanson said that managing director Mike Ogden has been replaced by Patrick O'Shea, currently chief executive of Hanson Continental Europe and Asia.

Meanwhile, rival construction group Mowlem announced that it will take an operating exceptional charge of £12m against its half-year figures due to underperformance at its Australian business.

It said its Barclay Mowlem Australian division would not be able to achieve its expected outturn for 2004 as the Aussie building market was suffering from increasing labour costs and material shortages.