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24Sep92 UK: RMC REPORTS 11% FALL IN PROFITS IN FIRST HALF OF 1992 TO £62.1M.

By Bill Fishlock.Ready mixed concrete volumes are set to fall by 7-8 per cent this year and may drop by a further 5 per cent in 1993, the industry's largest producer RMC Group said last week.The company said trading conditions in the UK were difficult and had deteriorated in recent months. After the first half fall of 3-4 per cent, volumes were expected to fall further in the second half.RMC said that prices of ready mixed and aggregrates, which now stand some 12 per cent below the 1989 peak, remain under pressure although the rate of decline has slowed in the first half.Margins on RMC's £441 million UK turnover halved to 2 per cent in the first half as profits from its home market fell to £8.8 million from £19.2 million last time.However, a strong showing by its German operations meant RMC's group pre-tax profits slipped by only 11 per cent to £62.1 million in the half ending June. The interim dividend was maintained.RMC says its home market, which has strunk by one-third since 1989, continues to be dogged by over-capacity. Its own measures to retrench since 1989 - cutting the number of its truck mixers by 27 per cent, mothballed around 10 per cent of its quarries and shedding 2,500 jobs - reflects a cautious long-term view.'We are getting ourselves to fighting weight to trade profitably at reduced demand,' said UK director John Cooper.The group's German profits climbed by 26 per cent to £40.5 million although margins did slip modestly, partly due to the inclusion of an acquisition. Ytong, RMC expects some slowing in the west German market but hopes that expansion in the east will mean its volumes and operating profits from the entire German market will grow next year.Readymix Berlin, has not enjoyed the expected growth rate, although productivity has improved sharply at the firm's Rudersdorfer Zement works and operating profits are expected.