Job losses likely at CRH’s northern Europe operations

Incoming chief executive Albert Manifold has said staff reductions in CRH’s northern European operations will be an inevitable part of continued cost reduction drives by the building materials group.

Mr Manifold, currently CRH’s chief operating officer, is due to succeed retiring CEO Myles Lee next year.

Speaking yesterday as part of the group’s interim results presentation, he said CRH had not yet reached the limit of its cost reduction capabilities and could further extend targets if markets remain challenging.

Group costs were reduced by €166m last year; €16m more than originally planned and the total savings forecast for 2013 has already been increased from €125m to €185m, with 70% amounting to permanent savings. CRH’s European operations account for 70% of that cost reduction target.

While labour costs are understood to be a relatively small part of overall group costs, any job losses would likely be seen in countries like Holland, Germany, and Poland and not Ireland.

Meanwhile, the group is set to continue its acquisition drive; Mr Lee saying that management continues to look at viable opportunities, adding that “further transactions are likely” before the end of the year.

CRH has officially spent €470m on acquisitions and investments this year and has agreed purchases worth more than €270m, combined.

The group’s overall 2013 spend could well top the €800m mark; which would be €200m more than its annual outlay in each of the past two years.

Maeve Carton, CRH’s finance director, said that, with available liquidity of around €3bn, the group is well-financed to meet upcoming debt repayments — it has a $700m dollar bond payment due in October and a €750m one due next year — and has “no immediate intention” of any further bond issuances to raise cash.

When asked about the change in management, Mr Manifold largely deflected, saying management is only focused on the current year, but added no “rush of blood to the head” approach would be taken to embracing more emerging markets in the short-term.