Midlands quarrying and materials group Ennstone has said it plans to invest up to £5 million in its Telford factory, if planning permission to build homes on it site in Doseley goes ahead.
Chairman Vaughan McLeod said he hoped to raise cash from the sale of the land to turn the site, which employs 123 people, into "one of the most efficient sites of its kind in the world".
Mr McLeod said the Derbyshire-based businesses was also looking to make acquisitions in the Midlands market, but would not comment on whether Ennstone had any targets in mind.
He said: "Our English business will continue to consolidate its position throughout the Midlands. I think there are a couple of potential takeovers that look quite interesting across our English business. I cannot go into specifics, but I do not believe it will be too long before we make an announcement."
Mr McLeod said there were still opportunities to consolidate within the UK market and that Ennstone was looking at a number of opportunities to expand its coverage. The Scottish market was of particular interest, he said, adding that the company was looking at establishing a presence around Inverness.
In June, Ennstone completed the acquisition of a 25-year leasehold interest in Netherglen quarry, near Elgin in Scotland, for £2 million in cash. The 40-acre site had about five million tonnes of consented reserves of hard rock, the group said.
The chairman's comments come after Ennstone posted a 2.2 per cent fall in interim underlying profit, impacted by tough market conditions in the US.
Underlying pre-tax profit was down to £5.26 million from £5.38 million on a revenue increase of 19.5 per cent to £112.75 million. Underlying group operating profit increased by 19 per cent to £10.5 million from £8.8 million.
Ennstone said its UK Aggregates division, which saw an almost 20 per cent rise in underlying operating profit, was helped by strong UK pricing while its UK Concrete Products business has been strong. Ennstone said its US business has coped well with the challenges it has faced but will remain under pressure until Ennstone completes the development of its fully integrated business model with the acquisition of further aggregates operations.
US operations were significantly lower than last year, hurt by challenging market conditions but in line with expectations, the company said. The company added that last year's mild winter boosted 2006 results, which further accentuates the difference between the periods.
In its Polish division, Ennstone said turnover was up 100 per cent, with profits increasing seven-fold.
Mr McLeod said an influx of EU money into the country had helped to boost the number of infrastructure projects taking place.
But he added: "It has taken us four years to get where we've got in Poland and we're now reaping the benefits.
It has been hard work and, although we will be focusing on extending our reach in Poland, I do not think we will be looking to move into other new EU states at this time."
Mr McLeod said: "The group has laid strong foundations for its two key objectives being real asset value growth in the medium term and, given a consistent and fair economic climate, good earnings growth."
The company increased its interim dividend by 6.8 per cent to 0.47 pence per share, to be paid on January 7, 2008.