David Munro, the new chief executive, plans a fresh start for the ready-mix concrete maker after years of problems in Germany and the UK’s Rugby cement business – reports the UK’s Daily Telegraph. Consequently, as much as UK£140m of RMC’s UK£365m of goodwill could be written off. Mr Munro is set to outline his full strategy in February and, so far, the signs have been encouraging. Instead of running the cement and aggregate arms as feeder businesses for the concrete operations, all three divisions will be given due prominence and there will be regional management teams. RMC will also press ahead with cost savings to cut overheads by pounds 50m a year from the end of 2005 compared with 2002. Germany, where the market has been oversupplied, is recovering and should break even next year for the first time since 2002. Debts are falling.
At UK£1.8bn three years ago, they dropped to pounds UK£894m at the half year, gearing the group at a manageable 55per cent. As cash is freed up, capital spending is expected to be accelerated and Mr Munro will be able to supplement his plans with selective acquisitions. The UK has continued to be a black spot for the group, with problems at Rugby (now largely resolved) and a reduction in asphalt demand due to road-building delays. But commercial construction is picking up in the US, which has contributed to strong half-year figures and usually prefaces a recovery in the UK.