European growth helps profits rise to €1.9bn

STRONG growth in Europe saw Ireland’s international builders provider CRH deliver earnings in line with expectations for 2007.

Profit before tax increased by 19% to €1.904 billion while Earnings Per Share (EPS) rose 17% to 262.7 cent, also in lime with forecasts.

Group dividend increased 31% to 68 cent.

During the year the group spent an impressive €2.2bn on acquisitions.

In the year under review Europe performed strongly, with operating profits up 36%, thanks to strongorganic growth (accounting for more than 60%) andacquisitions.

Europe delivered strong results across the board, the company said.

Its activities in the Americas delivered a subdued performance as tough trading conditions restricted operations profit growth to just 3%.

In dollar terms the growth would have been 12%, said group chief executive Liam O’Mahony. In that respect, the weaker US dollar that cost the group €78m in earnings and the weaker residential market were the main negatives and the outlook is still far from certain.

In the current year, CRH said it expects the dollar to average out at $1.52 to the euro, close to its current levels.

Its US distribution division was hit particularly badly, with profits down 32% year on year.

The US last year accounted for €10.27bn in sales against €107bn for Europe, which are the group core trading areas.

While the group has interests in China and some developing European markets, Mr O’Mahony expects the core operations in Europe and the US will continue to be the spring board of the group’s future development.

Shares in the company rose to €24 per share by mid-afternoon having fallen by 8 cent to €23.62 after the publication of its figures in early trading.

This year the US market is an unknown quantity in terms of the credit crunch, but Mr O’Mahony said the group expects to boost turnover and profits in 2008 giving it 16 years of unbroken profit growth and 24 years of rising dividends.

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