Wednesday 21 March 2018

Boucher joins board of CRH as profits hit a record €3.3bn

Richie Boucher
Richie Boucher
CRH chief executive Albert Manifold welcomed US President Donald Trump’s corporate tax cut
John Mulligan

John Mulligan

Former Bank of Ireland chief executive Richie Boucher has joined the board of CRH, Ireland's biggest company, as it posted a strong set of full-year results despite challenging weather in the US market during 2017.

CRH chief executive Albert Manifold has said the building materials giant has seen a slowdown in commercial activity in the UK, but insisted that the decline was being offset by the construction of major infrastructural projects such as the high-speed HS2 train network and a major new London sewer project, the Thames Tideway.

CRH generated about 10pc of its record €3.3bn 2017 earnings before interest, tax, depreciation and amortisation (ebitda) in the UK, making it the group's second biggest market after the United States.

"There's been a lot of commentary about how activity levels have been, particularly in construction, in the UK," he said. "In line with everybody else, we have seen a slowdown here [in the UK], in commercial activity, particularly in the southeast and particularly inside the M25 [the London orbital motorway]."

But Mr Manifold said that CRH's business in the UK is not just about activity in the commercial sector.

"We are a broadly-spread, truly national business," he said. "We're very significantly exposed to the public purse, the public infrastructure spend.

"What we have started to see at last is the enabling works taking place for some of the big, high-profile projects coming through."

Mr Manifold said those projects are offsetting declines in commercial projects and that CRH's UK business should be "broadly stable" this year.

CRH chief financial officer Senan Murphy said that the group also benefited from US President Donald Trump's decision to slash the US corporate tax rate from 35pc to 21pc.

"In 2017… this benefit is coming through in the form of deferred tax," he said. "We were able to reduce our deferred tax liability by €450m this year [2017] for a one-time benefit that has obviously boosted our earnings per share."

In 2018, the tax change will see CRH's group underlying tax rate fall from 27pc to 24pc.

Mr Manifold declined to comment on Mr Trump's presidency, but said the tax reform had been a significant step and a "positive" for the US economy.

"It puts a lot more cash into the economy for investment," he said.

CRH's revenue rose 2pc to €27.6bn last year, and was also 2pc ahead on a like-for-like basis. Its €3.3bn in ebitda was up 6pc, and 3pc on a like-for-like basis.

CRH spent almost €5bn on acquisitions, mostly in North America. This month, it will finalise the $3.5bn (€2.87bn) acquisition of Kansas-headquartered Ash Grove Cement.

The company expects to generate synergies of more than $100m over three years from the acquisition. The Ash Grove buy will also raise CRH's net debt to €6.4bn from €5.8bn at the end of 2017, a figure Mr Murphy said was "well within comfort levels" for CRH.

Mr Manifold said that it's likely to be the end of this year before CRH starts to look again at any big ticket acquisitions, however.

Mr Boucher's appointment as a non-executive director at CRH comes just months after he retired as Bank of Ireland chief executive.

Irish Independent

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