CRH chief says strong start will be key indicator for company
Trading in first quarter up on 2010 but it is off a weak base
CRH chief executive Myles Lee says trading in the first part of 2011 has been stronger than a year ago but the performance is off a weak base and a true picture for the business won't be evident until the third quarter of this year.
Speaking to the Irish Independent as the company unveiled full-year results for 2010, Mr Lee also said there were clear signs of stability within the group's business.
CRH, which is the biggest Irish company, posted a 1pc decline in revenues last year to €17.17bn, while earnings before interest, tax, depreciation and amortisation (EBITDA) fell 10pc to €1.61bn. Operating profit was 27pc lower at €698m. Revenues, excluding acquisitions and foreign exchange benefits, actually declined 7pc. The results were in line with forecasts.
"January and February are ahead of last year in terms of revenues but we're not running away with ourselves," said Mr Lee, pointing out that the increase was against weak comparatives. "We are looking forward to revenue growth in 2011," he added, but declined to say at this early stage in the year what type of increase might be generated. "There are uncertainties out there and it's not clear how that's going to feed through." Last year CRH's share price was hammered after management spooked investors by issuing a profit warning.
The company said that the rate of decline in like-for-like group revenues "moderated progressively" in the second half of 2010, with third and fourth quarter falls of 4pc and 2pc respectively.
CRH, which is involved in everything from the supply of aggregates for road construction to cement manufacture and the operation of DIY stores, generated about 47pc of its sales in the US last year.
The US government's spending on highway construction is an important contributor to CRH's business there, but there has been a budgetary deadlock that the company believes will be ironed out within a matter of weeks. In the US, CRH's like-for-like revenues from its materials division there -- which sells those components such as asphalt that are used in roads -- fell 7pc. At its Americas products division, like-for-like revenues were down 9pc, and at the Americas distribution unit, which sells goods used in home construction, like-for-like sales edged up slightly.
Within Europe, CRH chief financial officer Albert Manifold told the Irish Independent that economies such as Germany, Switzerland, Finland and Poland continued to remain in robust budgetary positions and provide the company with opportunities. Like-for-like sales at its European materials unit fell 8pc last year, and at its European products division the decline was 7pc. They also fell at its European distribution unit.
Investors broadly welcomed the results, with shares in the company closing down 36c at €16.35.