The Investment Column: Aggregate Ind

AGGREGATE INDUSTRIES has delivered a steady rise in its shareprice in the last five years, with few hiccups. Its products, include the coloured gravel used in tennis courts and bus lanes, are equally unexciting. But things are heating up, and AI's 25 per cent rise in half-year pre-tax profits is not the only reason.

AI's stability is based on its exposure to the US construction industry. Whilst the Federal government is awash with cash earmarked for infrastructure projects there are wide variations between state spending. AI is broadening its US exposure, having spent pounds 94m in the half-year on acquisitions. It's planning to spend up to pounds 100m in the second half.

AI's aggressive and acquisitive reputation must have its UK rivals quaking. British road maintenance contracts were non-existent in the half-year and sand and gravel volumes are not rising. But there's price inflation, largely because of environmental regulations, and AI wants to lead consolidation in the sector. Analysts expect full year pre-tax profits of pounds 91m and earnings of 5.2p per share. The shares, at 80.75p, are worth a punt on AI taking the lead in a shaking up a dull sector.

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Taylor Woodrow

TAYLOR WOODROW, the construction group, suffered a 4p decline in its shares to 188p yesterday after it failed to unveil a shake-up in its businesses.

That may seem somewhat harsh given that it posted a 58 per cent hike in US housing profits to pounds 19m, but that was the inevitable result of contracts won three years ago. While TW cannot replicate that sort of growth year on year, it nevertheless has more US, Canadian and London completions coming to boost second-half earnings.

Meanwhile the group's property arm - one-fifth of profits - is set to enjoy profit growth at a rate of at least 14 per cent as recent developments mature. Naturally, the group also sees itself as a beneficiary of rising house prices.