CRH cements solid results as profits climb to €1.2bn

BUILDERS materials group CRH has reported solid growth in sales and profits including good contributions from recent acquisitions.

Sales in 2005 rose 13% to €13.4 billion and operating profit increased 14% to €1.3bn.

The group boosted earnings per share 14% to 186.7 cents, while shareholders will benefit from an 18% increase to their final dividend to 39 cents per share.

Profits for the period before tax rose 16% to €1.2bn as the group reported very strong results across the Americas, with European growth significantly more subdued.

Operating profits achieved growth of 7% to €676m.

This is the 13th year of increased profits from the continually expanding group and the 22nd consecutive year dividends have been increased.

Key findings:

* Total operating profits for the Americas increased by 22% to euro €716 million

* Total operating profit from European operations up 7% to €676 million for the year.

Despite the good results, and the positive outlook for 2006, shares in the group fell 29 cents to €27.26, a dip of over 1% in the share value as some investors cashed in on the good results.

These were about €20 million ahead of the group's earlier guidance to the market for the year. CRH has entered 2006 with good momentum and analysts may have to revise their forecasts for 2006.

Davy Stockbrokers has already changed its pre-tax profit forecast for 2006 from €1,423m to €1,470m and our fully-diluted EPS forecast, before amortisation of intangibles, from 205.4c to 210.1c.

Those projections do not include any acquisitions the group might make in the current year.

Liam O'Mahony said the group continued to move forward on many fronts in 2005, producing new record sales and profits, with strong underlying profit growth and good contributions from acquisitions.

"The group also delivered substantial development success, especially in the second half of the year", he said.

Looking ahead, Europe is picking up and any continuation of that will have a positive impact in the current year and beyond, he said.

The US, where the economic outlook remains broadly positive, all aspects of the operations look on course to deliver another set of good figures in the current year.

"With a continuing focus on operational effectiveness and ongoing acquisition benefits, we look to 2006 with confidence", he said.