CRH shares tumble by 6%

SHARES in building materials giant CRH fell over 6%, or by more than €1 in monetary terms, yesterday, on the back of the group stating that the decline in its full year revenues is likely to be “greater than previously anticipated”.

The first-half trading update from the group – the biggest name on the Irish Stock Exchange – also warned that operating profit for the six months up to the end of June (CRH is due to issue its half-year financial results towards the end of next month) will likely be around half that of the €240m reported for the first half of 2009.

While pre-tax profits amounted to €100m at the halfway stage last year, this year’s first-half figures are likely to show a break-even level in this respect.

However, the group added that the rate of decline in like-for-like sales is continuing to ease as the year progresses (the rate falling from 14% to 10% between April and June) and earnings before interest, tax, depreciation and amortisation (EBITDA) in the seasonally more important second half of the year will be ahead of last year’s second half showing of €1.15bn.

“Since our AGM statement in early May, concerns relating to fiscal deficits across eurozone countries have intensified, adding to uncertainty regarding the pace of economic progress in Europe,” the group said in its statement.

However, it added that it remains more upbeat about conditions in the US – which represents around 50% of group EBITDA.

Davy Stockbrokers added that the weak first-half performance is likely to result in a “slight full-year downgrade”, while the Americas Materials division “is still key”.

The group’s net debt levels are currently around €4.7bn, about €1bn higher than at the end of December.

CRH’s share price fell by 6.1% – or €1.05 – to €16.08; after spending most of the day pulling back from an early 9% fall.