UK building products division experiences 1.2% fall in turnover after fall in RMI and public infrastructure spending

Building materials group Hanson has reported a 12% rise in profits for the first half, boosted by strong performance from its UK aggregates business.

Pre-tax profit rose 12.4% to £193.6m, compared with £172.3m last year. Turnover rose 14.4% to £1,998.2m across the same period.

The growth was led by good performances from the firm’s UK aggregates, Australian and continental European operations, together with strong results from the group’s US businesses.

The performances offset ongoing difficult market conditions for the UK building products division, which experienced a 1.2% drop in turnover to £193.8m. Operating profit fell by just over 50%, due largely to lower brick volumes caused by weak demand in the repair, maintenance and improvement sector.

The group said it didn't expect to see significant improvements in the RMI sector in the second half of the year and said its priority was to maintain selling price and cost discipline to prevent further decline in earnings.

Of the group's overall performance Alan Murray, Hanson chief executive, said: “Hanson has made significant progress in driving forward its profitability both from existing business operations and through the contribution from acquisitions. Overall, the outlook remains in line with our expectations and we anticipate continued progress in the second half of 2006.”