€1.5bn war chest for possible acquisitions

CRH has spent €60m on acquisitions and investments — covering seven "small" transactions — since the beginning of 2014 and claims to have approximately €1.5bn available to spend over the next year and a half.

Speaking after the building materials giant’s AGM in Dún Laoghaire yesterday, chief executive Albert Manifold said that management would continue to search for opportunities in its core markets of mainland Europe, the Americas and Asia.

CRH spent €720m on acquisitions and investments last year.

Asked about potential opportunities arising from the recently agreed merger between Swiss cement giant, Holcim and its French counterpart, Lafarge — which will see around €5bn worth of assets sold off in order for it to meet competition approval — Mr Manifold said that CRH looks at a number of business opportunities, but seemed to distance the group from this particular transaction, although admitted they would watch the progress “very carefully”.

He said the Holcim deal would be “very significant” for the global cement industry, but noted that cement only makes up 15% of CRH’s broad-based business and the Irish group will continue to grow from its existing platforms.

CRH is undertaking its own asset disposal round, as part of its strategic portfolio review which kicked into gear earlier this year. In February, the company said it would be selling 45 subsidiary companies — or 10% of its asset base — with another 20% to be reviewed.

A number of sales processes, regarding the initial 10%, are already under way. Of the remaining 20%, Mr Manifold said that half will be kept, with the other half (representing 7% of annual group earnings) still being under review, with their fate set to be decided upon sometime during the third quarter of this year.

The non-core businesses up for sale — the identities of which have not been divulged as yet — were bought by CRH around 15 years ago.

When tackled, from the floor, about the accuracy of CRH’s buying judgement during that timeframe, Mr Manifold told shareholders that about €24bn had been spent, of which €23.3bn worth of assets have proved “very solid” investments and fundamental to the industry-leading returns generated by the company.