Brickmaker Hanson yesterday posted a 28 per cent rise in first- half profits to £172.3 million - but warned of continuing weak demand in the UK housebuilding market.
The company, which has quarrying operations in the West Midlands as well as a concrete pipe factory in Wolverhampton, said selling-price increases and cost-cutting had helped it deliver a strong performance in the six months to June 30.
It said the improvement had come from many areas of the group, including Hanson Building Products North America and Hanson Aggregates UK, which has recently undergone a shake-up.
However, the company said it was not expecting significant volume benefits in the second half and believed that underlying demand patterns for the rest of 2005 would follow similar trends to those seen in the first half.
In the UK, demand, in particular housing-related construction, was expected to remain weak and first half underlying volume reductions in aggregates and bricks were likely to continue into the second half.
Hanson said fuel price increases were continuing and all divisions would maintain price rises to cover the extra costs.
The company said in a statement: "Overall, Hanson expects to make further progress in the second half of 2005, albeit against a good performance and significant property profits in the second half of 2004."
Hanson is the world's biggest producer of aggregates and concrete pipes and the third largest ready mixed concrete manufacturer.
The group also makes clay bricks and concrete roof tiles and has operations in the UK, North America, Australia, continental Europe and the Asia Pacific region.
Hanson has installed a new management team in its UK aggregates business and has been cutting costs in the division.
It said its strategy of rebalancing aggregates production towards premium products had contributed to a 4.1 per cent improvement in operating margins to 10.6 per cent.
The division's operating profits improved by 81.8 per cent to £42.9 million and turnover was up by 10.9 per cent to £403.7 million.
Productivity gains continued to be delivered through a combination of capital spending and industry rationalisation, such as the agreement to share capacity at four quarries with industry rival Lafarge.
In the group's UK building products division, operating profits improved by 20.1 percent to £21.5 million.
While overall brick volumes increased by 14.9 per cent excluding acquisitions, heritage brick volumes declined by eight per cent compared with the first half of 2004.
"This reflects the difficult market conditions in both the new build and improvement sectors of the housing market," the statement said.