Saturday 15 December 2018

CRH buys depot from Kilsaran as construction growth boosts its Irish business

CRH chief executive Albert Manifold. Photo: Bloomberg
CRH chief executive Albert Manifold. Photo: Bloomberg
Gavin McLoughlin

Gavin McLoughlin

CRH has bought assets from Irish competitor Kilsaran as growth in its Irish business picks up.

The move was announced in results posted earlier this week but specifics relating to the deal were not disclosed. The Sunday Independent understands it relates to CRH's purchase of a ready-mix concrete depot outside Wexford town.

Chief executive Albert Manifold said "momentum is good" in the company's Irish business as activity increases in the construction sector.

"Construction in Ireland has been on the up off a low base. I think after a number of years of slowdown in construction both in residential and non-residential, and also in terms of infrastructure spend, there's bound to be a catch-up. Broadly speaking the business has performed well," he said.

Manifold was speaking after the company posted record full-year ebitda (earnings before interest, tax, depreciation and amortisation) of €3.3bn.

He said the company did not regret its investment in the Philippines, where sales were down on the prior year. CRH said this was fuelled in part by aggressive competitor pricing.

"Emerging markets are more volatile than developed markets and one has to be cautious as to how you invest in those businesses. At the same time, running a global business in CRH, you've got to invest for both the short-term and indeed the longer term," Manifold said.

"We believe there is solid underlying profitable growth going forward. The fundamentals of construction are good there. There's a growing population, significant needs."

Manifold said the collapse of UK-based Carillion was "a big shock to everybody" but that it had not had a significant impact.

"We didn't have any exposure there. Let's just say that while it was a big shock when it actually happened, it was known they had had some challenging times and people were monitoring their exposure to them. Certainly we were. But there was no significant knock-on effect to us and certainly now we don't see any either."

Acquisitions are a big part of CRH's growth model and Manifold says there are "many years" left in this strategy. "Take our biggest market, North America, the United States - the top five or six players in the heavyside business (a category including cement and asphalt) don't even make up 20pc of the population of businesses or sales in the industry," he said.

"So there's significant fragmentation still in the industry and there's decades of growth for us to go forward here."

Sunday Indo Business

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