However the former Anglo-US conglomerate, which became famous in the 1980s as an aggressive takeover predator, said the UK market would be flat for most of 1999.

Hanson has performed better than analysts had expected

Pre-tax profit before exceptionals for the year to 31 December was up 18% at the group to £265.2m ($425m), from £224.7m in 1997. Turnover was virtually flat at £1.53bn.

Andrew Dougall, chief executive at Hanson, said: "Overall prospects for 1999 are positive, principally because of ongoing growth in the US."

But the situation in the UK was less promising, he said: "In the UK the outlook for volumes is flat but Hanson's UK operations are well placed to maintain margin leadership."

Kevin Cammack, analyst at Merrill Lynch in London, described the result as "very good figures, much better than forecast".

Brick sales down

Hanson's US building materials business saw trading profit increase 45%.

Excluding the effect of the group's several US acquisition over the year, profits were still up a strong 33%.

The European quarrying business saw more modest growth of around 13%.

Hanson Bricks Europe however saw profits trimmed by the slowdown in the construction market and brick sales fell sharply.

UK housebuilding slowdown

Brick sales also fell in the UK as a slowdown in house building took its toll, but tight control of prices meant the UK business improved profit margins.

The group's profit before tax including exceptional items stood at £196.5m, down on the previous year's figure of £609.3m which was bolstered by high exceptional income.

Hanson employs around 15,000 employees and has brick and building materials operations in Europe, the US and Asia.