CRH profits fall 27% to €534m

BUILDING materials group CRH which is ranked number two in the world among its peers, saw its pre-tax profits dive by 27% to €534 million in 2010.

Total sales fell 1% to €17.2bn which rises to 7% when acquisitions and currency factors are taken into the equation.

Results from the group were in line with, or better than, market expectations and the shares traded higher during the day, despite the drop in performance.

Earnings per share fell heavily on the back of the lower profit out turn and were down by 31% to 61.3 cent. With the outlook for the group’s activities at home and in Ireland still quite mixed, the group announced an unchanged final dividend of 44c, bringing the year’s tally to 62.5c, which meant no change overall on the 2009 dividend payout.

During the year, the group spent €567m on acquisitions across the group of which €408m was delivered in the second half.

Group chief executive Myles Lee interviewed over the phone yesterday refused to be drawn on what amount the company might spend this year across its core areas of activity, but the markets will not be surprised if the company spends a similar amount or slightly more in 2011. For several years in the boom period the group’s acquisition spend was well over €1bn year on year.

Mr Lee said that demand across the group’s activities looks to have stabilised over the past three months. The level of price progress achieved in 2011 will be a factor in the outcome for the year, he said.

“Overall demand across the group appears to have stabilised in the past three months and, assuming no major market dislocations, we believe it is reasonable to look forward to like-for-like revenue growth for 2011 as a whole,” he said.

He stressed also the level of price progress achieved in 2011 would be key to pushing up sales growth and to the recovery of higher input costs.

“Acquisitions completed over the last eight months are expected to add to the group’s performance in 2011 and with a strong balance sheet we have the capacity, where we see value, to capitalise on a growing pipeline of opportunities.

“With significant adjustments to our cost and operational base over the past three difficult years, we look to a year of progress in 2011 and to stronger upward momentum thereafter,” he said.