CRH in sales warning as building sector struggles
Country's biggest company predicts further drop of 20pc
THE country's biggest company said sales could tumble 20pc this year after falling 35pc last year as the construction market continues to contract.
CRH said Irish sales fell to €726m last year from €1.12bn the previous year, while it swung to an operating loss of €34m last year from a profit of €110m the previous year.
Ireland, one of CRH's four regions, suffered a decline in profit and sales that was worse than twice the average across the company. Total pre-tax profit more than halved last year to €773m, while sales declined 17pc to €17.4bn, the company added.
Sales here will fall again this year as major construction projects, such as the nation's motorway network, the national convention centre and the only shopping centre still under construction, are completed, chief executive Myles Lee said yesterday.
The company's performance was uneven last year, with countries such as Switzerland, Poland and Germany holding up well, while others such as the US and Ireland struggled.
CRH embarked on a major cost-cutting programme over the past two years, cutting one in four jobs at the organisation which employed 90,000 at the height of the boom.
Here in Ireland, CRH closed companies, such as Castlecomer, Kilkenny-based Ormond Brick, as sales faltered.
Shares in CRH, which has streaked past the battered banks to become the country's biggest company by market value, were little changed yesterday at €16.80 in Dublin.
The shares tumbled last November when the company warned it was facing sharp falls in earnings and profits.
The company gave the market further details in January, so there were few surprises in yesterday's figures which the company blamed on poor weather, cost-cutting and unfavourable foreign exchange rates.
"They're bang in line. They are known for cautious guidance. There's nothing really new in that," one Dublin-based trader said.
Most analysts focused instead on the company's outlook for 2010. The company said yesterday the outlook was the least certain for 15-20 years.
"There is considerable uncertainty with regard to what 2010 holds for us, and I don't think anybody is calling anything yet," chief operating officer Albert Manifold said. "You couldn't call it up. You couldn't call it down."
The group edged up the final dividend to 44 cent from 43.7 cent last year, which enabled it to record its 26th straight year of dividend growth.
Mr Lee said the pipeline for acquisitions, a key driver for future growth, was good in Europe and the United States, and the company, which has less debt than rivals following a rights issue last year, could afford to be selective.