Hanson on the warpath with £200m

INTERNATIONAL building products group Hanson plans to return to the acquisition trail, having improved margins and squeezed costs to concentrate on organic growth last year.

But although it expects to spend 10 times as much on acquisitions this year as it did last, the budget at about £200m will look miserly compared with the heady days of the 1980s and 1990s when Lords Hanson and White were at the helm. In the six months to June the group spent £102.4m on acquisitions, some £92.5m of it on US concrete pipes maker Choctaw. That compares with £11.3m last year.

New chief executive Alan Murray plans to increase this to £200m before the end of the current financial year. Cashflow up 9.6% to £207.1m will make bolt-on acquisitions easy.

America, where Hanson still makes 57% of its earnings, is still causing problems for the group. Although the US housing market is booming, industrial and commercial demand for Hanson aggregates is still very weak.

Britain and Australia compensated for US weakness and helped drive pre-tax pre-exceptional profits up 12.3% at the interim stage to £145.1m . The interim dividend is increased by a modest 2.2% to 4.55p. Murray expects a 'marginal improvement over the 2001 performance for the full year'.