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[May 2008]
CRH Interim Management Statement
CRH plc, the international building materials group, has issued an Interim Management Statement, which is in accordance with the reporting requirements of the EU Transparency Directive.
It said that overall profitability in the seasonally less significant January/April period, which traditionally accounts for a small proportion of annual profit before tax, is behind the very strong performance experienced in the early months of 2007.
Europe
Europe Materials had a positive start with significant advances in Poland and Ukraine more than compensating for declines in the Irish and Spanish markets, where the benefits of continuing growth in infrastructure investment have been outweighed by sharp reductions in residential construction activity.In Europe Products, trading in January and February was well ahead of 2007. However, March results were lower than last year due to an earlier Easter and harsher weather conditions. As expected, April saw a rebound and cumulative results to date are in line with the very strong start experienced in 2007.
For Europe Distribution, lower activity levels and profitability in the DIY operations in the Benelux due to weakening consumer confidence more than offset the benefits of a generally good start across the builders’ merchanting operations.
Overall for Europe, results to date are similar to 2007 and organic growth remains underpinned by a continuing strong dynamic in central and eastern countries.
Americas
As is normal for Americas Materials, the highway construction season in most of its markets is just getting underway. While energy costs, in particular diesel, will be higher in 2008 the liquid asphalt winter-fill programme has been encouraging. Early indications point to a continuation of the positive pricing environment and slightly softer volume trends of recent years.Americas Products is seeing ongoing declines in US residential construction and some evidence of moderation in forward indicators for non-residential activity. Further significant cost reduction initiatives have been implemented across various operations.
To date while Americas Distribution operating margins are lower, turnover in US$ is ahead of 2007 reflecting the acquisition last November of Acoustical Materials Services. Although the difficult trading conditions experienced in 2007 have continued into 2008 the rate of decline in like-for-like sales has eased over the past two months.
Overall for the Americas, results to date are behind 2007 mainly reflecting continuing difficult trading in residential markets.
Development
On the development front a total of approximately €0.35 billion has been invested to date in acquisitions and investments. In addition, transactions in China, India and the USA which have already been announced in 2008 are expected to be completed later in the year at a cost of approximately €0.85 billion.
Share Buyback
The share repurchase programme announced on 3 January 2008, which is limited to a maximum of 5% of the 547 million Ordinary shares in issue at December 2007, is ongoing and to date CRH has repurchased 11.4 million shares at an average price of €24.40 per share.Outlook
The further depreciation of the US Dollar over recent months, together with weaker trends in a number of markets, has made the company’s goal of achieving another year of profit and earnings growth more challenging. However, CRH’s profitability and cash flow remain well underpinned by its geographic, sectoral and product balance and as it moves into the busier and more significant trading months it has intensified its emphasis on operational efficiency and commercial delivery across the group businesses.www.crh.com
ENDS