Profit rise of 33% to fuel further CRH acquisitions

CRH is to continue spending on acquisitions this year on the back of continued financial growth in 2011, which included a 33% rise in pre-tax profits.

Speaking yesterday, on the back of the publication of the Irish building materials group’s 2011 financialresults, chief executive Myles Lee said that the business would be “reasonably active” in the marketplace in 2012 after seeing the immediate effects of a €600m spend last year.

“Benefits from acquisitions completed in 2011 leads us to expect further progress in the year ahead,” Mr Lee said.

CRH’s total revenues grew by 5% in 2011, going from just under €17.2bn to just under €18.1bn.

Operating profit grew by 25% on the preceding year, to €871m, while pre-tax profits were up by 33% to €711m. Earnings per share were up by 35% to 82.6c, while there was no change in the annual dividend per share, at 62.5c.

Mr Lee said that the positive figures were largely reliant on the group’s re-organisation and restructuring measures carried out in recent years.

“Assuming no major economic or energy market dislocations, we expect to generate further like-for-like revenue growth this year, with the achievement of targeted price increases a key priority,” he added.

Out of its six major divisions, in Europe and the Americas, Americas Products and Europe Products were the only ones to see revenue declines last year; the latter by 6% and the former down by 4%. Double-digit revenue growth was evident in its Europe Materials and Distribution divisions; while the equivalent divisions in the Americas were unchanged and up by 8%, respectively.

The group added that cement volumes in Ireland were down by 16%, with Ireland now only contributing 2% of overall group revenues.

However, Mr Lee said management is confident of an eventual upswing in the Irish construction market and that the group will be “well-placed” to benefit from that.

More importantly, in the current climate, the group is expecting good demand to continue in a number of its chief European markets — such as Germany, Poland, Finland and Switzerland — with subdued activity elsewhere on the continent.

The group is even more optimistic of growth in North America, where recent construction data and consumer confidence trends have been steadily rising.

In Dublin, now the group’s secondary listing, CRH’s shares were down by over 2% to just under €16. Despite it switching its primary share listing to London, the group has no intention of changing its reporting currency or its Dublin headquarters.