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higher growth & higher profits forecast ... Rinker expects higher FY profits on strong US markets

By RWE Australian Business News, 06 Apr 2006
Sydney - Thursday - April 6: (RWE Aust Business News)

- Rinker Group Ltd (ASX:RIN) expects profit for the year ended 31 March 2006 will be higher than previously forecast, mainly from the ongoing strong performance of its major US markets - particularly Florida and Arizona.
Net profit is forecast to be around $US740 million, around 50 per cent above the previous corresponding period.

Earnings per share (EPS) is expected to be around US80c, up approximately 53pc on the previous year.

One-off gains in the above results include a pre-tax profit of $US31m in the US subsidiary Rinker Materials Corp, following the April 2005 sale of the Buffalo Road quarry in Las Vegas.

Also included is a $26m pre-tax profit in the Australian subsidiary, trading as Readymix, following the sale of the Emoleum joint venture in February.

Including these one-off gains, Rinker Materials earnings before interest and tax (EBIT) is expected to be up around 53pc and Readymix EBIT up around 19pc.

Chief executive David Clarke said ongoing population growth, strong employment and economic expansion, together with healthy state finances were behind the continuing growth in construction activity in the US.

"These are long term trends in our key markets which support strong activity levels across the residential, nonresidential and infrastructure sectors," he said.

"Volumes and prices were higher in most markets across the US during the year.

"These gains, together with an ongoing program of cost savings and productivity improvements and a focus on delivering what our customers need, helped override significant increases in fuel and energy, freight and raw materials."