High hopes at Hanson

It is an interesting time for Hanson. The building materials company might generally be quieter than its size and scale would suggest – it is after all a member of the FTSE-100 with a market capitalisation of more than £3.5bn – but change is in the air.

Its share price has been steadily creeping up in the past 12 months.

It has ranged from a low of 358p in July last year, to a high of 541p in February this year, with shares levelling off at 483p at the close

of trading last week. Hanson’s strengthening position can partly be explained by solid financial results, but also because the market is hopeful that the US Congress will pass a bill creating a compensation fund for asbestos sufferers, thus limiting Hanson’s liabilities. That would significantly slacken the shackles that have been holding the company back, with liabilities last year standing at $400m (£210m).

Observers of Hanson say the potential removal of this millstone would allow the company to really take off, but as a result it would be open to the threat of an unwelcome takeover approach.

All the UK’s big heavy materials companies – Tarmac, Blue Circle, RMC and Aggregate Industries – have been snapped up by international companies. Hanson would be the last one to fall. It is very possible that its current aggressive acquisition plans are a

bid to bulk up and defend itself against any unwanted advances.

Last month it bought Thermalite, a UK manufacturer of aircrete lightweight concrete blocks, for £120m from Etex.

Alan Murray, Hanson’s chief executive, said at the time that this was just part of a plan to grow through “bolt-ons,” and that it was actively pursuing others.

Last week Hanson’s shares dropped 3% to 483p, but this reflected the general fate of equities, which have suffered the ripple effect from falls at Wall Street and poor corporate results in the US.

Elsewhere in the sector, McCarthy & Stone had a poor week, dropping 8.6% to 585p after it sounded a cautious note when reporting its interim results. Overall the construction and building materials sector fell 1.4% to 3357 compared with a 0.9% drop in the All-Share Index to 2433.

Angela Monaghan is business editor