CRH can add to portfolio by 2bn per annum

BUILDING materials group CRH says it has the capacity to spend 2bn plus a year for the next few years on acquisitions.

Having beaten its own profit forecasts and paid out a dividend 33% higher than last year, the group says its key financial indicators make such spending possible.

Chief executive Liam O’Mahony pointed out that 2006 represented the group’s 23rd year of unbroken dividend growth. For several years, the dividend payment increase has been in the high teens and the board decided it was time to give a little more to shareholders.

He could not confirm that the huge dividend increase in 2006 would be replicated.

However, investors can look forward to a rising dividends income stream provided earnings continue to grow, he said.

On China, the CRH boss indicated the group would hasten slowly in that market.

The group was under “no pressure” to enter China he told journalists yesterday, but it was hard to avoid getting involved in a market that uses 600 million tons of cement annually.

He rejected suggestions that institutional pressure had forced CRH’s hand on China.

That market had been under investigation for a number of years before its made its first relatively small acquisitions in North Eastern China where it took full control of a cement plant in Harbin. That deal was signed off last month and it also holds a 26% stake in a company that owns four cement plants with a 9 million tonne capacity.