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Aggregate Industries feeling heat of materials price rises

SHARP increases in the price of oil-related products such as bitumen have put coated stone margins under pressure at Aggregate Industries, one of the leading producers of roadstone.

The sector also faced rising haulage rates and flat volumes as road maintenance and new road spending has remained unchanged over the past six months.

Aggregate says some of the increased costs have been recovered through price increases and margins on coated stone at urban plants have been maintained.

Chief executive Peter Tom added that the recent government spending announcements were positive for the industry in the medium term. Second-half trading at the group is expected to remain firm.

Aggregate reported a 16 per cent rise in pre-tax profits to £33.8 million for the half-year ending June, on a turnover up 22 per cent at £514.5 million.

The firm said its UK markets in the first half were generally stable. Crushed rock volumes fell by 4 per cent, while sand and gravel rose by 11 per cent.

Aggregate also benefited from price increases of 5 per cent in crushed rock and 3 per cent in sand and gravel. In the US, the group's underlying profits rose by 46 per cent to £20.1 million and acquisitions chipped in a further £2.5 million.