RNS Number:1649I
Aggregate Industries PLC
03 March 2003
Embargoed until 7:00am, Monday, 3 March 2003
AGGREGATE INDUSTRIES PLC
Preliminary results for the year ended 31 December 2002
Aggregate Industries plc, the international quarry and aggregates group,
announces its preliminary results and increased dividend for the year ended 31
December 2002.
Year ended
2002 2001 Increase
#m #m %
* Turnover 1,378.2 1,306.9 5
* EBITDA 239.1 230.1 4
* Operating profit 168.2 165.8 1
* Profit before tax 134.5 124.1 8
* Earnings per share 6.7p 6.3p 6
* Interest cover (times) 5.0 4.0 25
* Total ordinary dividend per share 2.55p 2.43p 5
* Net cash inflow from operating activities 226.2 208.9 8
* Gearing (%) 54 54 -
* Net assets 887.1 859.6 3
* Total mineral reserves (tonnes) 4.4bn 4.4bn
Peter Tom, Aggregate Industries' Group Chief Executive, comments:-
"We achieved record profits in 2002, with a strong performance in the UK
offsetting a slower year in the US. Looking ahead, there is a backlog of
infrastructure and publicly funded works in the UK and we have a strong order
book. With low interest rates we expect total housing demand to be maintained.
Overall, we anticipate some volume and price improvements to be achieved in the
UK in 2003.
"In the US, the start of the year has seen continuing very heavy snowfall,
particularly on the East Coast, and extremely cold weather elsewhere, which is
delaying the start of the trading year. We expect US sales volumes for the year
to be flat or to show a modest decline; however, we expect to see further price
improvements.
"Our balance sheet remains strong and we will remain alert to opportunities to
add businesses which make a positive contribution to Group earnings. The
developing situation in Iraq will overshadow economic sentiment and could have a
bearing on the final outcome for 2003. Nevertheless, based on our assessment of
our markets at this time, we anticipate making further progress during the
year."
Further information about Aggregate Industries can be found at www.aggregate.com
Contacts: Peter Tom, Group Chief Executive
Chris Bailey, Group Finance Director Tel: 020 7831 3113 (on 3 March 2003)
Aggregate Industries plc Tel: 01530 816600 (thereafter)
Steve Jacobs/Meg Baker
Financial Dynamics Tel: 020 7831 3113
GROUP CHIEF EXECUTIVE'S REVIEW
Financial review
Turnover increased 5% to #1,378.2m and profit before taxation was up #10.4m to a
record #134.5m (2001 #124.1m), an increase of 8%. Acquisitions made during the
year contributed #4.9m of operating profit on #75.9m of turnover.
A strong performance in the UK offset a slower year in the US. Results from the
US were also adversely affected by the decline during the year in the value of
the US dollar, which reduced reported turnover by #33m and profit before
taxation by #4.0m.
Goodwill amortisation increased to #6.8m (2001 #5.7m).
EBITDA rose 4% to #239.1m (2001 #230.1m) and net cash flow from operations rose
#17.3m to #226.2m (2001 #208.9m). Interest costs benefited from a lower average
level of debt throughout the year and from the reduction in interest rates which
occurred during the year. The charge fell #8.0m to #33.7m and interest cover
improved to 5.0 times (2001 4.0 times).
The profit attributable to shareholders rose 8% to #89.2m (2001 #82.5m).
Earnings per ordinary share rose 6% to 6.7 pence per share (2001 6.3p).
Total Group net assets at 31 December 2002 were #887.1m (2001 #859.6m) and net
debt was #481.9m, representing gearing of 54%, in line with the 54% reported at
the close of 2001.
Dividend
A final dividend of 1.52 pence per ordinary share has been proposed and, if
approved, will be paid on 4 July 2003 to shareholders on the register at 13 June
2003. Taken together with the interim dividend of 1.03 pence per ordinary
share, this represents a 5% increase in the total dividend to 2.55 pence per
ordinary share (2001 2.43 pence per ordinary share).
Trading performance
UK trading in the first 5 months of 2002 was very strong and we were able to
increase prices across almost all products in March. During April the
aggregates levy was introduced, adding #1.60 per tonne to the price customers
pay for virgin aggregates. In June activity was badly affected by the World Cup
and Jubilee celebrations, which reduced the number of working days in the month
and, although the third quarter only recovered slowly thereafter, we ended the
year with a strong fourth quarter which, despite very wet weather in November,
enabled us to recover much of the previous four months' reduction in sales.
Total sales volume of virgin aggregates fell 3%. However, we were able to
increase our sales of secondary and recycled materials in substitution for
certain of these lower-grade virgin materials, so that overall aggregate sales
only fell 1%.
Both our asphalt and ready-mixed concrete operations had excellent results, with
sales volumes up 12% and 13% respectively. Both increases included
contributions from a number of acquisitions completed in the year, but sales
also rose on a like-for-like basis.
Our Bradstone, Charcon and Masterblock pre-cast concrete operations all had an
excellent year. Bradstone increased sales by 8% and continued to improve our
market position with major merchants. Charcon prospered, with sales volumes
increasing by 1%, and we were pleased that the Masterblock operation, which had
suffered margin erosion in recent years, stabilised with increases in both
margin and profit.
The slowdown in US construction in 2001 continued in 2002. However, there were
significant regional variations and some sectors of the market remained
relatively buoyant.
Mild weather at the beginning of the year enabled most regions to make a good
start, but in all regions this was followed by a colder and wetter second
quarter which delayed deliveries to some projects. Activity recovered
thereafter, but early snowfall on the east coast disrupted operations from late
November and this resulted in an early close in both the Northeast and the Mid
Atlantic regions.
Across our US operations as a whole, the economic slowdown resulted in a fall in
total aggregate volumes of 3%. Asphalt volume fell 3% and ready-mixed concrete
sales reduced by 6%, caused primarily by the decline in residential sales in
Colorado.
The Northeast Region (Massachusetts/New Hampshire) had a good year and delivered
record results. The Central Artery/Tunnel project in Boston is approaching
completion, although activity was extended as work was won on ancillary works.
The housing market remained strong throughout the region and we benefited from
supplies to the redevelopment of Route 3 North.
Operations in the North Central Region (Minnesota/North Dakota) had a much
improved year following the previous year's flooding of the Mississippi river.
Overall the market was firm, with a good level of infrastructure projects and a
strong housing market offsetting a fall in commercial demand as office vacancies
rose.
The Central Region (Michigan/Indiana) had a mixed year. Aggregate operations
performed as expected, but ready-mixed concrete activities in Northern Indiana
had a poor year, with increased competition and a weak housing market.
The Mid Atlantic Region (Maryland/Northern Virginia) performed broadly as
expected, although activity slowed as the year progressed. Unlike other
regions, commercial activity remained firm in the Washington area and the
housing market performed well. Infrastructure was subdued, although we
continued to supply materials to the first phase of the Woodrow Wilson Bridge.
West Central Region (Colorado), in contrast, had a poor year as a result of the
sharp decline in the telecommunications and technology sectors within the
region. Although we experienced a good level of demand from infrastructure
projects, and the major expansion of Interstate Highway 25 (known as T-REX) is
now underway, this did not offset the significant fall in ready-mixed concrete
sales and results were lower.
Acquisitions
During the year a total of fifteen businesses in the UK and three businesses in
the US were acquired. The total cost of businesses purchased was #89.1m.
On 10 January the UK business acquired its joint venture partner's interest in
Douglas Truck Mixer Services Ltd, a company providing ready-mixed concrete
vehicles and maintenance facilities. On 1 February the purchase of Kennedy
Asphalt Ltd was announced. Comprising an asphalt plant and a contracting
business in Greater Manchester, the operation represented a valuable addition to
our network of services in the north west and West Midlands. Later in the same
month the UK operation expanded its presence in the south east by purchasing
Essex-based Bradwell Aggregates Ltd, which also trades as Karrimix. Activities
included three sand and gravel operations and five ready-mixed concrete plants.
In the same month the purchase of the ready-mixed concrete plant of Littler
Readymix, based in Chester, strengthened the operations in the Ellesmere Port,
Chester and greater Wirral markets.
On 27 June the Group increased to 55% its interest in Paragon Materials Ltd
which, through its cement facility at Chatham, will supply Aggregate Industries
with an additional secure source of this important raw material for its
ready-mixed concrete and pre-cast concrete operations. Finally, during the
first half of the year, the asphalt plant and contracting operation, Pallot
Tarmac, based in Jersey, was acquired.
As part of the UK strategy of developing a market-leading national asphalt
contracting business, the Group purchased on 8 July certain assets and
subsidiary interests from the Receiver of Stenoak Associated Services plc.
These operations provide specialist contracting services in the asphalt,
surfacing and associated markets, laying approximately 500,000 tonnes of asphalt
per annum throughout south east England.
A 51% interest in Paving Developments Limited was acquired on 22 July. This
start-up operation focuses upon the supply of quality hard landscaping and
pre-cast concrete products and complements the Group's existing pre-cast
concrete operations.
On 7 November the acquisitions of a further five UK businesses were announced,
which similarly complemented existing operations. These comprised: the
businesses of GFX Hartigan Ltd, a ready-mixed concrete and sand and gravel
operation in the Midlands; Border Stone Ltd, based in Powys, which supplies
decorative aggregates; Central Coated Stone, based in east Nottinghamshire, an
asphalt supplier; and Francis Flower's bagged aggregate operations. In
addition, a 50% interest was purchased in Sewells Reservoir Construction Ltd,
based in Essex, which adds to the existing sand and gravel operations of
Bradwell Aggregates and Karrimix. Finally, on 12 December, mineral assets and a
ready-mixed concrete plant were purchased from Cambridgeshire Aggregates Ltd.
Since the end of the year the Group has acquired the whole of the share capital
of Three Counties Concrete Ltd. Located at Upton-upon-Severn in Worcestershire,
this supplier of ready-mixed concrete will enhance the Group's ability to supply
the southern West Midlands market.
During January 2002 the US operations added the business and assets of Seven
Star Aggregates Inc. Located in southern Maryland, the sand and gravel
operations are contiguous to the Group's existing mineral reserves. Producing
1m tons of aggregates a year, the business also owns mineral reserves of 17m
tons and holds under lease a further 2m tons.
On 1 May the Group acquired property and ready-mixed concrete assets situated in
Waltham, Massachusetts.
On 10 September the Group announced the purchase of aggregate and ready-mixed
concrete assets from Wakefield Materials Inc for a cash consideration of $73m
(#47m). Located in northern Massachusetts and southern New Hampshire, the
business and assets comprise a large hard rock quarry, three sand and gravel
operations, eleven ready-mixed concrete plants and associated trucks. Producing
1.5m tons of aggregate and 850,000 cubic yards of ready-mixed concrete, total
consented mineral reserves are in excess of 90m tons.
The business has been integrated into the existing Massachusetts operations,
expanding its ready-mixed concrete operations into northern Massachusetts and
enabling a presence to be established in the fast-growing southern New Hampshire
market.
UK AND CHANNEL ISLANDS OPERATIONS
Aggregates, Asphalt, Ready-Mixed Concrete and Contracting
Turnover #559m (2001 #441m)
Aggregates and asphalt
Demand in 2002 started well, with volumes across all product groups ahead of the
same period in 2001. However, June saw reduced activity due to the Jubilee
celebrations and the football World Cup. Trading conditions in the third
quarter improved slightly, with a reasonable level of activity achieved in the
last quarter. Overall, the market demand for aggregates in the UK was below
that of 2001.
Our aggregate volumes outperformed the market due to a number of acquisitions
and developments to the business. The Bardon Hill replant was completed during
the year, and the benefits of this investment are already starting to emerge.
Edzell Sand and Gravel was opened in Scotland and we also saw the benefits of
our Uttoxeter sand and gravel facility in Staffordshire, which was opened in
2001 to support our ready-mixed concrete operations in the Midlands.
We completed a number of strategic acquisitions, intended to provide aggregate
for our value added businesses and contracting operations. In addition to the
purchase of Francis Flower's bagging operations, we invested in expanding our
existing bagging business, Quarrypak. Operations now extend across south west
England and we have new facilities at Cleveland Farm, Wiltshire and Forfar in
Scotland.
Our secondary aggregate operations increased their export of material to the
south east of England by sea, adding to those already made to our businesses in
the Channel Islands and Isle of Wight.
A number of significant and prestigious contracts were completed using our
products and services. Our crushed rock and sand and gravel were supplied to the
new meteorological office in Exeter and our drainage and recycled materials were
used for the M5 Junction 26-27 reconstruction. Other major schemes included the
A6 Great Glen and Clapham bypasses and the supply of material for the largest
warehouse in Europe - the Asda distribution centre in Leicestershire. In
addition, cost controls and price improvement contributed to improved results
across all our products.
A new asphalt plant was commissioned at our Haughmond Hill quarry to service the
West Midlands and support Bardon Contracting's operations in the region through
the acquisition of Kennedy Asphalt. We also continued to invest in improved
efficiency and productivity, with a replacement asphalt plant at Moorcroft
Quarry in the south west which is capable of delivering the service previously
supplied by two old plants.
2002 also saw the launch of our network of 20 urban asphalt plants under the
Express Asphalt brand name. These units are specifically designed to service
the collect and utilities markets. An additional plant at Newark has been added
to the network, through the acquisition of Central Coated Stone, strengthening
our service in the East Midlands.
Ronez, our business in the Channel Islands, acquired Pallot Tarmac and Trinity
Joinery during the year, to broaden our service provided to the islands. Ronez
also invested in an on-site ready-mixed concrete plant as part of the material
supply contract for the construction of the new terminal building at Guernsey
Airport. Having a plant on-site will reduce the impact of vehicle movements on
the environment, improve productivity and minimise inconvenience to the
islanders.
Halsvik, our Norwegian joint venture, had another good year, with sales to
Poland, Germany and the UK. Halsvik supplied aggregates to the North Sea
offshore oil industry and rail ballast to Holland. It also supplied the
aggregates for re-surfacing the NATO airbase in Iceland.
Ready-Mixed Concrete
During 2002 our ready mixed concrete operations were reorganised under a single
national business - Bardon Concrete. We have already seen an expansion of this
business through focused management and the acquisition of ten strategically
located plants, increasing our penetration of the market. These acquisitions
have been successfully integrated into the business and are performing in line
with expectations. Bardon Concrete has introduced a range of special and
proprietary products and services including Bardon Multicrete, an in-situ foam
concrete service for the utility market. Excellent service is the key to Bardon
Concrete's successful Elite and Alba mini-mix businesses. London Concrete also
performed well in 2002, and commissioned a new plant at Heathrow. This plant,
the largest in Europe, will be ideally located to supply contracts associated
with the Heathrow Terminal 5 development.
Contracting
Bardon Contracting, our national surfacing business, saw significant growth
during the year due to a number of key acquisitions. The purchase of Kennedy
Asphalt Ltd in March and the assets of Associated Asphalt in July, resulted in
increased turnover and enabled Bardon Contracting to become a leading national
player. The acquisitions have also increased tendering opportunities, helping
us to secure work on a number of Highways Agency Framework and Term Maintenance
Contracts and improving our capacity to work on a number of major road schemes.
The acquisition of the traffic management company Moxon Ltd, as part of the
Associated Asphalt purchase, brought an important element of road maintenance
in-house. Moxon also assisted us in securing work such as the resurfacing of
the M1 in Hertfordshire and the M11 contract to be carried out early this year.
Last year, Bardon Contracting completed a #12.5m high profile sub-contract on
the A43 Silverstone bypass, as well as a #6.2m contract in Scotland on the M8.
Building Materials
Turnover #158m (2001 #146m)
The building materials businesses delivered an excellent performance in 2002,
with volume improvements in most product groups. We continued to focus on new
and premium products, enabling us to improve both turnover and sales margins.
Bradstone generated strong growth, driven by firm demand for our innovative
premium products and a wider customer base. The acquisition of Border Stone
strengthened Bradstone's position in the decorative aggregates market and
provided further outlets for its existing product range. Bradstone now has a
strong presence in all sectors of the market.
Internationally, Bradstone continues to expand its export sales and licensing
revenue. A new licensing agreement was signed for Portugal and production of
Bradstone products commenced under licence in Slovakia. Products are now
distributed to, or manufactured under licence in twelve countries.
Charcon launched three new products in 2002. Its environmentally friendly flag
and kerb range uses recycled and secondary materials and the latest energy
saving manufacturing methods. The products are targeted at local authorities,
many of which specify the use of environmentally sound products. The Highway
Splay range of products was developed specifically for AMEC for use on the
Bingley bypass and the products were so successful that they are now being used
on other road contracts. Focus on the London market resulted in the launch of a
reinforced paving product that provides greater strength when heavily
trafficked. A number of major term contractors in London have expressed an
interest in the product, with the first significant supplies to begin shortly.
2002 saw the launch by our Masterblock business of the Fyfestone architectural
masonry range in England. Positive responses have been received from many
architects, a number of contracts have been specified and deliveries are
expected to start later this year.
Masterblock also launched two new products, a common brick in June and a
multi-cell block in December. Our blocks were used in the construction of the
Falmouth Maritime museum, Port Pendennis, Falmouth.
US OPERATIONS
Mid Atlantic Region (Maryland/Northern Virginia)
Turnover $164m (2001 $169m)
The Mid Atlantic Region started the year strongly and benefited from an open
winter, which allowed increased construction activity during the first quarter.
This buoyant start was followed by a reduction in demand that persisted
throughout the remainder of the year, brought on by sluggish economic conditions
that discouraged investors. During the year price improvements were achieved in
aggregates, ready-mixed concrete and asphalt.
Sand and gravel volumes bettered last year by 10% and this volume improvement
was underpinned by the purchase in January of Seven Star Aggregates Inc located
in southern Maryland. The acquisition included a sand and gravel wash plant
capable of producing 1m tons per year, along with 19m tons of high quality
consented reserves. Ready-mixed concrete and asphalt volumes were the most
affected by the sluggish economy as road and office build programmes were put on
hold.
In contrast, Washington DC is poised to strengthen its employment base with the
implementation of the "Homeland Security Agency" and, as a result,
infrastructure activity is expected to increase.
The region was involved in the supply of aggregates, ready-mixed concrete and
asphalt products for the Woodrow Wilson Bridge structure and the Maryland
highway approaches. Other major contracts completed in 2002, or still in
progress, include the National Institute of Standards and Testing building
located in Rockville, Gallery Place, the American Indian Museum in Washington
DC, Largo's mass-transit extension and Highway 450 widening in central Maryland.
Northeast Region (Massachusetts/New Hampshire)
Turnover $312m (2001 $316m)
The region had a good year, producing solid earnings as a result of a number of
infrastructure projects and residential work, together with continuing demand
from the Central Artery/Tunnel project. The Wakefield acquisition in September
was a significant expansion into the New Hampshire market and further
strengthened our reserves and concrete operations in the region.
Asphalt had a healthy year. The private sector remained strong, accounting for
approximately half the region's overall tonnage. The region started the year
with a significant backlog and continued with the Route 3 North reconstruction
project, other secured work at Gillette Stadium, the Route 44 reconstruction and
the resurfacing of Routes 495 and 128.
The aggregates division experienced its best overall performance in recent
years, with sales boosted by the continuing Norumbega Water Containment System
project in Weston, Logan International Airport, and expansion into the New
Hampshire market. Aggregate production increased by 20% with the Raymond, New
Hampshire quarry acquisition, along with the addition of two sand and gravel
production plants.
Ready-mixed concrete volumes for 2002 remained strong, but were slightly down on
the prior year due to lower demand from Central Artery/Tunnel work and declining
commercial office construction.
West Central Region (Colorado)
Turnover $252m (2001 $277m)
After eleven years of steady growth, the Colorado economy contracted in 2002.
Construction spending was down on 2001 levels, with sizeable decreases in
residential housing and commercial construction projects.
Real price increases were achieved in our aggregate products, but prices in our
external coated stone sales decreased due to lower liquid asphalt pricing from
suppliers. Bidding levels in our contracting business became more competitive
as the year progressed. Ready-mixed concrete pricing came under increasing
pressure and ended the year below the average for 2001.
The region supplied a number of major new construction projects. The $1.2bn
expansion of Interstate Highway 25 ("T-REX") will require 4m tons of aggregates
and over 600,000 cubic yards of concrete; significant volumes were supplied in
the year and these are expected to continue in 2003. We were the principal
supplier of aggregates to the final $480m construction phase of the new E-470
beltway around the east side of metropolitan Denver, which was completed in
December, and to the $30m renovation of the Horsetooth Reservoir west of Ft.
Collins.
Central Region (Michigan/Indiana)
Turnover $87m (2001 $94m)
Public sector spending in 2002 was a key factor in the continued success of the
region. State funding for transportation construction projects exceeded $2.5bn.
Additionally, strength in the residential markets in both Indiana and Michigan
provided the region with a consistent backlog of work throughout the year.
The concrete division had a difficult year, with the overall economic downturn
more pronounced in the northern Indiana market.
The region continued to expand its mineral reserve base by acquiring three
parcels of land with reserves located close to three existing aggregate
production facilities. These strategic acquisitions have increased the region's
permitted mineral reserves to over 100m tons and total mineral reserves to above
110m tons.
The asphalt division had a mixed year. The region successfully completed its
first "Superpave" job in Michigan and the expertise gained from this will be an
asset to the business in the coming year. However, a long, wet spring delayed
the start of the operating season.
North Central Region (Minnesota/North Dakota)
Turnover $184m (2001 $181m)
The North Central Region had a very good year, marking a significant improvement
over the previous year. The improvement in profitability was primarily
attributable to cost and efficiency improvements, an exceptionally good
performance in the North Dakota market and the timely sale of excess assets.
Market conditions in the Twin Cities remained mixed. The residential market
achieved some stability but the commercial market continued to decline and is
forecast to move down again in 2003. The North Dakota market remained fairly
stable, with an excellent year in the concrete paving sector.
Aggregate reserves totalling 15m tons, located in the South Metro area, were
added in the year. These reserves are proven, but as yet not permitted. With
proven and permitted reserves of more than 210m tons, the region is well
positioned to ensure a continued profit stream for many years to come.
Economic review
Our planning for 2003 and beyond is based on the assumption that we will see a
continuation of slow global economic growth, declining inflation, further falls
in interest rates and a moderate rise in unemployment.
In reaching this conclusion, we have not attempted to factor in the effect of a
war nor any resulting impact on oil prices which, as a consequence of military
action, could rise beyond current levels and further slow economic activity.
In the UK, although a recession was avoided in 2001, the weak growth of 2002 is
expected to continue in 2003, improving only marginally thereafter.
Construction supported what modest growth there was in 2002, with increases in
public spending offsetting the slowdown in the manufacturing and commercial
sectors and we expect this trend to continue. Indeed, while the commercial
sectors may weaken further, there will be further increases in public sector
spending on hospitals, schools and, importantly, road and infrastructure
construction and repair. Housing is also expected to remain firm, although some
weakness may emerge in areas which have experienced the fastest price rises in
recent years. Forecasts for growth in total construction output in 2003, while
lower than the previous year, suggest that an increase of approximately 4% could
be achieved.
We anticipate that US economic growth will once again be muted in 2003.
Consumer spending and a strong housing market, boosted by low interest rates,
offset a decline in the industrial and commercial sectors in 2002. Overall,
this resulted in GDP growth of approximately 2.5%. Currently, forecasters
predict similar growth in 2003, but there is a risk that consumer spending and
the strong housing market will slow before industrial activity improves,
corporate profits grow and equity markets recover.
With the political uncertainties caused by mid-term elections in 2002 now past,
Federal and State legislatures are likely to focus more sharply on economic
issues, which should contribute to more stable conditions. Federal highway
spending is funded through six year programmes. The current TEA-21 programme
will end in September 2003 and we are confident that discussions already
underway to establish a replacement will be successful. However, the timing is
uncertain and there may be some delays to the commencement of the new programme.
Meanwhile, 2003 expenditure of #31.6bn under the existing programme was
approved by the US House of Representatives and the Senate on 12 February 2003.
This followed a long period of uncertainty and the expectation that a reduced
level of spending might apply.
Outlook
Weak economies and the political and economic uncertainties created by the
events taking place in Iraq make it unusually difficult to predict the outlook
for 2003. In these circumstances, Aggregate Industries will continue to adopt a
cautious approach, controlling costs, strengthening our core assets where
possible, and seeking to supply products with superior quality and service in
order to maximise our share of the available market. Throughout 2003 we expect
the US construction markets to remain subdued after years of significant growth.
Weaker performance in the mid-western states will continue. However, in other
regions some improvements can be expected, aided by the full effect of 2002
acquisitions. President Bush's programmes connected with home security and
defence, together with the recently-announced budget stimulus, should counter
the impact of weak State finances. Low interest rates are expected to maintain
the buoyancy of the housing market and we anticipate that a further six year
programme to replace TEA-21 when it ends in the autumn, will be enacted at
broadly the expenditure levels of the current programme.
The start of the year has seen continuing very heavy snowfall, particularly on
the US East Coast, and extremely cold weather elsewhere, which is delaying the
start of the trading year. We expect US sales volumes for the year to be flat
or to show a modest decline; however, we expect to see further price
improvements.
Increases in Government spending on infrastructure and public services benefited
our UK operations during 2002. We anticipate that this trend will continue in
2003, although as the economy slows, increasing pressure will be placed on the
Government's ability to fund already announced spending programmes without
increased borrowing and this could impact the rate at which programmes are
implemented. However, there is a backlog of infrastructure and publicly funded
works in the UK and we have a strong order book. With low interest rates we
expect total housing demand to be maintained. Overall we anticipate some volume
and price improvements to be achieved in 2003.
Our balance sheet remains strong and we will remain alert to opportunities to
add businesses which make a positive contribution to Group earnings. The
developing situation in Iraq will overshadow economic sentiment and could have a
bearing on the final outcome for 2003. Nevertheless, based on our assessment of
our markets at this time, we anticipate making further progress during the year.
AGGREGATE INDUSTRIES PLC
PRELIMINARY RESULTS 2002
Abridged Consolidated Profit and Loss Account for the year ended 31 December
2002
2002 2001
Restated*
#m #m
Turnover
- continuing operations 1,302.3 1,306.9
- acquisitions 75.9 -
1,378.2 1,306.9
Group operating profit
- continuing operations 161.6 163.8
- acquisitions 4.9 -
166.5 163.8
Share of profits of joint ventures 1.7 2.0
Total operating profit 168.2 165.8
Net interest payable (33.7) (41.7)
Profit before taxation 134.5 124.1
Taxation (43.0) (39.5)
Profit after taxation 91.5 84.6
Minority interests (2.3) (2.1)
Profit for the year attributable to shareholders 89.2 82.5
Dividends (36.7) (34.9)
Retained profit for the year 52.5 47.6
Earnings per ordinary share 6.7p 6.3p
Dividend per ordinary share 2.55p 2.43p
*Prior year figures have been restated to reflect the effect of FRS 19 -
Deferred Taxation.
AGGREGATE INDUSTRIES PLC
PRELIMINARY RESULTS 2002
Turnover and total operating profit
Geographical analysis of turnover:
Continuing
operations Acquisitions Total Total
2002 2002 2002 2001
#m #m #m #m
UK 663.4 53.7 717.1 587.1
USA 638.9 22.2 661.1 719.8
1,302.3 75.9 1,378.2 1,306.9
Geographical analysis of total operating profit:
Continuing
operations Acquisitions Total Total
2002 2002 2002 2001
#m #m #m #m
UK 83.9 2.4 86.3 70.3
USA 79.4 2.5 81.9 95.5
163.3 4.9 168.2 165.8
AGGREGATE INDUSTRIES PLC
PRELIMINARY RESULTS 2002
Abridged Consolidated Balance Sheet
31 December 31 December
2002 2001
Restated
#m #m
Fixed assets
Intangible assets 121.9 110.3
Tangible assets 1,267.5 1,250.5
Investments 23.0 18.9
1,412.4 1,379.7
Current assets
Stocks and work in progress 109.2 99.7
Debtors 290.0 248.8
Cash 52.8 73.0
452.0 421.5
Creditors
Amounts falling due within one year:
Loans and overdrafts (34.2) (8.3)
Trade and other creditors (281.1) (256.2)
Taxation (15.7) (19.4)
Dividends payable (32.4) (30.6)
(363.4) (314.5)
Net current assets 88.6 107.0
Total assets less current liabilities 1,501.0 1,486.7
Creditors
Amounts falling due after more than one year (515.2) (541.0)
Provisions for liabilities and charges (98.7) (86.1)
Net assets 887.1 859.6
Capital and reserves 880.1 853.7
Minority interests 7.0 5.9
887.1 859.6
AGGREGATE INDUSTRIES PLC
PRELIMINARY RESULTS 2002
Abridged Consolidated Cash Flow Statement for the year ended 31 December 2002
2002 2001
#m #m
Net cash inflow from operating activities
Group operating profit 166.5 163.8
Depreciation and amortisation 72.6 66.3
Changes in working capital and provisions (12.9) (21.2)
Net cash inflow from operating activities 226.2 208.9
Dividends from joint ventures - 0.1
Returns on investments and servicing of finance
Interest paid, net (34.4) (42.0)
Dividends paid (36.1) (35.3)
(70.5) (77.3)
Taxation (30.5) (21.3)
Capital expenditure and financial investment
Purchase of tangible fixed assets (80.9) (73.6)
Sale of tangible fixed assets 6.2 8.0
Purchase of other investments (3.6) (1.8)
Joint ventures (0.3) 0.1
(78.6) (67.3)
Acquisitions and disposals (88.8) (36.6)
Net cash inflow/(outflow) before financing (42.2) 6.5
Net cash inflow from financing 5.9 80.9
Increase/(decrease) in cash and overdrafts
in the year (36.3) 87.4
Earnings per ordinary share
Earnings per ordinary share have been calculated by dividing the profit
attributable to ordinary shareholders of #84.9m (2001 #78.2m) by 1,263.1m (2001
1,246.0m) ordinary shares, being the weighted average number of shares in issue
during the year.
Dividends
Subject to shareholder approval, a final dividend of 1.52p per ordinary share
will be paid on 4 July 2003 to shareholders on the register at 13 June 2003.
Accounting policies
The Group's accounting policies reflect a change following the adoption in 2002
of FRS 19 - Deferred Taxation.
FRS 19 requires deferred tax to be recognised on a full provision basis on all
timing differences that have originated but not reversed at the balance sheet
date. In adopting FRS 19 the Group has chosen to discount the deferred tax
provision to present value.
The effect of FRS 19 has been to decrease profit after taxation by #2.2m (2001
#4.9m), decrease net assets by #0.6m (2001 #0.2m) and to decrease EPS by 0.2
pence (2001 0.4 pence).
Basis of preparation of accounts
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2002 or 2001. Statutory
accounts for 2001 have been delivered to the registrar of companies and those
for 2002 will be delivered following the Company's annual general meeting on 24
April 2003. The auditors have reported on those accounts; their reports were
unqualified and did not contain statements under section 237(2) or (3) of the
Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
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