CRH spending passes €400m mark

CRH’s spending levels are believed to have passed the €400m mark for the year to date following an estimated €35m bolt-on purchase of a heating product wholesale company in Belgium.

In its latest trading update, issued earlier this week, the Dublin-based building materials group said a further eight transactions had been completed since the end of June, bringing year-to-date acquisition and investment spend to €390m.

While the group made no further comment yesterday, a proposed purchase of Lambrechts, a family-owned Belgian company, was reported on the latter’s corporate website.

While no consideration has formally been disclosed, analysts here have suggested that such a deal — Goodbody Stockbrokers referring to it as “a typical bolt-on for CRH” — could cost about €35m.

In this week’s update, CRH said full-year profits and earnings per share would likely be down this year, but chief executive Myles Lee added that the business would remain active on the merger/acquisition side, with “quite a number of opportunities” being explored.

Saying that management hoped to add to its spend before the end of this year, Mr Lee said this week: “We continue to have capacity in our balance sheet, but we continue to focus on getting good value and completing deals that are appropriately priced for CRH, given the outlook.”

Last year, CRH spent €600m on acquisitions and investments, adding a further €250m in the first six months of this year.

Goodbody Stockbrokers has forecast total acquisition spend of around €480m for 2012.

While continuing weakness in European markets and a slowdown in growth in the Americas is likely to dent CRH’s full-year figures for 2012, the group’s net debt levels are still likely to be down by about €600m to €3bn and overall profits on disposals should exceed €200m.

The group is also targeting cost savings of about €450m over the coming three years.