CRH profits up 71%

Building materials group CRH profits are up 71% to €275m for the first half of this year, it reported this morning.

Overall, sales were up 22% to €5.67bn.

In the Republic of Ireland, residential construction grew strongly with increases in cement, concrete blocks, readymixed concrete and blacktop volumes, although prices failed to compensate for cost increases. While margins declined profits were similar at €68m.

In Britain and Northern Ireland, underlying organic profit improvements combined with a slight strengthening of Sterling resulted in an 8% first half operating profit advance to €32m.

In mainland Europe, more normal weather conditions than in 2003 resulted in a much better demand backdrop for CRH's materials division with a particularly strong organic performance contributing to a 91% increase in operating profit to €63m.

The products and distribution division continued to experience subdued markets but benefited from internal improvements and strong contributions from the record 2003 development spend delivering a 124% increase in operating profits to euro 121 million.

Chief executive Liam O'Mahony said: "CRH has had a particularly strong first half with a good organic bounce back from weather depressed 2003, significant incremental contributions from acquisitions and only a modest adverse profit translation impact due to seasonally low first half US Dollar operating profits.

"Second half performance will be affected by continuing high world energy prices and rising input costs, a lower incremental acquisition impact than in the first half and, at current exchange rates, an adverse translation impact of approximately euro 26 million at profit before tax level compared with 2003. However, markets are on balance better and with improved activity across much of our business we expect to deliver a healthy full year profit advance.

"With the improved trading outlook the Board has decided that a higher ongoing annual dividend increase is appropriate and accordingly has decided to raise the interim dividend by 17% making 2004 the 21st consecutive year of dividend increase."

CRH's shareprice was up 9c just before 10am this morning to €18.99.