CRH full year profits to top expectations at £860M

CRH full year profits to top expectations at £860M

	Published : Wed, 04 Jan 2006 20:05 By : James Rowe Print this Story

DUBLIN: Irish building materials group CRH Plc, said it expected pre-tax profits for the year to 31st December to exceed £860m which is the top end of analysts’ forecast.

The company had benefited from 34 acquisition deals as well as organic growth especially in its US operations. In a trading statement issued ahead of the March 7 date for reporting full year earnings, CRH said its American business gained from the passage of a new Highway Bill that improved prospects in the highway markets.

The US government had decided to spend more on roads and schools. The company also said that its Spanish operations had done well throughout 2005. Additionally, the Dutch economy was showing signs of picking up, giving CRH enough reason to be upbeat about full year profits.

The first half had disappointed shareholders as spending on acquisitions had slowed down to £0.13bn but in the subsequent six months, the company spent more than £0.8bn in acquisitions taking investment during the whole year worth a total of £1bn. Acquisition have proved to be the more consistent source for growth for CRH

During the last six months the company completed 8 deals worth over £21m in its materials business, 13 deals worth more than £117m in products and distribution, nine acquisitions worth £246m in products and distribution in Europe and another four worth £10.3m in products and distribution businesses in Europe - these included two Finnish concrete making companies.

The company hopes these acquisitions will “give a useful boost to the European products and distribution business” the only part of the group’s business that performed poorly in 2005.

In 2004, the company had reported a pre-tax profit of £0.7bn (1.02bn euros).

The trading update has prompted analysts to revise targets and the earnings per share of the stock. They now expect EPS of around 205 cents.