Merrion capital cuts profit forecast

Merrion Capital says it is reducing its organic profit expectations for CRH’s products and distribution divisions by between 5% and 8% in 2008.

It no longer expects organic growth in any of the P&D divisions in 2008.

It said this reflects a greater than expected impact from the credit crunch on both residential and non-residential construction activity in the US and Western Europe.

“This reduces our 2008 EPS forecast by 3.2%. However, we are now assuming that CRH completes its 5% share buyback over the course of 2008, which adds 1.4% back to our 2008 EPS forecast, resulting in a net reduction of just 1.8% to 259 cents — a forecast yoy EPS contraction of 1.4%,” it said yesterday.