European sales in building materials up despite concerns in US housing
The world’s second- biggest maker and distributor of building materials said higher sales in Europe offset a downturn in the US.
Total sales rose 21% to €9.6 billion while earnings per share of 92 cents increased 26% in the first half of 2007.
The group, which made €1 billion in acquisitions in the first half, has also boosted its interim dividend 48% to 20c as the group delivered on its commitment to cut its dividend cover to 3.5 times.
Its first half dividend in 2006 came in at 35c a share.
For the period sales in the US were up 19% overall to €4.6b, but operating profits fell 2% from €283m to €276m.
Both the materials and products divisions recorded lower profits over the six months.
In Europe the picture was much more upbeat as total sales rose 23% to over €5bn for the six months and operating profit ahead by an impressive 50% to €495m, boosted by both strong organic growth and contributions from acquisitions.
Chief executive Liam O’Mahony said despite the problems in the US the group delivered a record return for shareholders and it would also produce a solid 12 months sales and profits outturn for the year, he said.
The results vindicated the group’s diverse strategy where it has a presence in the 50 US states and is active in 16 countries in Europe, he said.
CRH is active in the 50 states in the US and has operations in 16 countries across Europe.
“This is a very reassuring set of figures,” said John Mattimoe, an analyst at Merrion Stockbrokers in Dublin, who rates the shares a “buy”.
In Dublin the group’s shares were down 1.5% in late afternoon trading to €30.83.
But the chief executive, who retires in 2008, said the stock’s volatility reflected the “turmoil in the markets” and had nothing to do with the outlook for the company.
