RNS Number:1367N
RMC Group PLC
04 July 2003



                                RMC Group p.l.c.



TRADING REVIEW FOR THE FIRST HALF OF 2003


This trading review is being issued by RMC Group p.l.c. in advance of its
interim results for the 6 months ending 30 June 2003, which will be announced on
5 September 2003.



At our preliminary results meeting in March, we indicated that we expected
broadly similar market conditions in the first half of 2003 to those prevailing
in the second half of 2002.   The position at the end of the first half remains
as we described at our AGM on 2 May, when we confirmed that following our first
quarter's trading, with the exception of Germany, market conditions and our
financial performance were in line with our expectations.



Operating performance



In Great Britain, aggregates sales have been down compared with the same period
in 2002, but last year's sales reflected high demand in advance of the
introduction of the Aggregates Levy in April 2002.   Cement sales and prices
have been similar to 2002, in line with the overall market.   Ready mixed
concrete sales have been lower, due to the fall in demand in the south east of
England, where RMC is particularly strong, but margins have improved.



The encouraging performance of the Rugby cement plant reported at the start of
May has been maintained.  Following the replacement of the kiln's burners, and
the other modifications and upgrades implemented during the annual shutdown in
January, clinker production has averaged over 100,000 tonnes per month in the
four full months of production.  Production is now at the design capacity of the
plant and is over 65 per cent higher than the monthly average during the same
period in 2002.  When stability in output at these levels has been achieved for
six months, the Rugby operation will be in a better position to realise
additional financial benefits through cost reductions.



Overall in Great Britain, EBITA profitability is expected to have improved in
the first half of 2003, relative to the same period last year.



In Germany, RMC's cement sales have increased but prices continued to decline in
the first few months of the year, averaging around Euro30 per tonne.   Weak demand
has meant that ready mixed concrete margins have also been under pressure.
However, in recent months, an increase in residential building permits suggests
that overall demand in 2003 may not be down by as much as had initially been
anticipated, but the future direction of prices remains uncertain.



As indicated at our AGM, despite management actions to reduce costs and improve
efficiency, if prices do not recover during the remainder of the year, a
material loss is expected to be recorded in Germany.   Due to seasonality, the
major part of this loss will be reported in the first half of the year.



In the Rest of Europe, market conditions experienced in the second half of 2002
have generally continued in 2003.   In western Europe, construction demand has
remained strong in Spain, but has weakened somewhat in France.   Demand in
Ireland has been stronger than expected.   In eastern Europe, prices in Poland
have been affected by weak demand, compounded by the impact of prolonged and
severe winter weather conditions.  In Croatia, domestic demand has been strong.
  The net result is that profitability in the Rest of Europe is expected to be
lower than in the first half of 2002, excluding discontinued operations.



In the USA, there has been no sign of an improvement in market conditions.
However, our operations in Florida have continued to benefit from the strong
housing market and this has also been the case in California. In the Carolinas
and Georgia, our businesses have been affected by weak market conditions,
pricing pressures and adverse weather.      Overall, profitability in the first
half of 2003 is expected to be similar to the second half of last year.



The Group's results in the Rest of the World reflect the continuing favourable
market conditions in Australia, and the excellent performance of Adelaide
Brighton.   Elsewhere, demand continues to grow in the Gulf States, although
Israel has been held back by the continuing political uncertainty.   Overall,
profitability is expected to increase compared with the same period in 2002.



Business developments



On 20 June, the Group announced the sale of Hales Waste Control Limited and RMC
Environmental Services Limited for approximately #141m.  This is an important
step in rationalising RMC's business portfolio and a further strengthening of
the balance sheet.



As indicated at our AGM, further action is being taken to ensure that the Group
is in the best position to achieve its RONOA target of 12% and to maximise the
value to be delivered from the core asset base of the Group.  With the
assistance of L.E.K. Consulting, work on the identification of further cost
reductions in the core businesses in Great Britain, Europe and the USA is well
advanced.



As referred to at our AGM, the search for a new Group Chief Executive is
underway.



Other



Expenditure on acquisitions during the first half of 2003 is expected to total
#38m.



Exceptional items will include net profit on the disposal of businesses,
including Hales and our operations in Belgium and Jordan.   Disposals so far
this year have generated proceeds of #172m.



These disposals have further strengthened the financial position of the Group,
with seasonal gearing at 30 June 2003 forecast to be around 60%, compared with
68% last June.  The Group is confident that the target to reduce net debt below
#1 billion by the end of 2003 will be achieved.



With the successful refinancing of Group debt completed in December last year,
the Group is now well positioned to invest selectively for growth in its core
markets of Great Britain, Europe and the USA.



Outlook



With continuing uncertain economic conditions in some of our key markets,
notably Germany, we remain cautious about the outlook for 2003.   However,
assuming the continuation of prevailing market conditions, RMC at this stage
expects that its overall financial performance will be in the range of market
expectations for the year.





Enquiries:

Investor Relations     Gary Rawlinson         01932 583067

Media Relations        Tim Stokes             01932 583215






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