Rinker Group quashed any lingering concerns about the impact of the recent Florida hurricane season on its US operations by providing the market with a profit upgrade - its second in four months - and a record half-year result. Rinker shares hit an all-time high of $9.38 before closing 35 ¢ higher at $9.30, after the construction materials group beat market expectations by reporting a 26 per cent lift in half-year net profits to $294 million.
Aside from crediting the resilient US housing sector and recent cost-cutting within the group, Rinker chief executive David Clarke said the result was also underpinned by strong price increases for its product in the US and Australia. Rinker’s US operations, largely focused on Florida and Arizona, posted a 31 per cent increase in pretax profits to $US273 million ($A355 million). Mr Clarke said Rinker expected its US operations to increase their full-year pretax profits (in US dollars) by 30 per cent, up from the previous forecast of a 20 per cent increase. Rinker generates 48 per cent of its US sales in Florida, but Mr Clarke said disruptions from the worst-ever hurricane season had only had a minor effect on sales. "Even though our business may have suffered a little bit in one month . . . we’ll catch that up over the balance of the year," he said.
Aside from insatiable demand for concrete and cement in Florida, another heartening sign was Rinker’s previously underperforming concrete pipe business posting a 25 per cent lift in profitability for the six months to September 30. Mr Clarke said the company still aimed to spend an average $US200-$US300 million a year on acquisitions and greenfield expansion in the US. Rinker declared a fully franked interim dividend of 7 ¢ a share, up 1 ¢ on the year and payable on December 13.