Business Irish

Monday 11 December 2017

CRH sounds upbeat note on future but shares fall

Albert Manifold.
Albert Manifold.
John Mulligan

John Mulligan

CRH has "set out its stall" and remains focused on driving returns from the business despite two major rivals merging to create the world's biggest cement company, according to chief executive Albert Manifold.

Asked whether the Dublin-headquartered building materials giant is taking into account the planned merger between rivals Holcim and Lafarge, which will result in a company with €32bn in annual revenues, Mr Manifold said the marriage was an issue for the two firms.

"From our own point of view, we set our stall out and we're focused on recovering the returns and margins and bringing them back to peak," he said.

"Like anything else, we remain aware or open to opportunities within our industry provided there's value there, provided there's returns for CRH. We have our own thought process, we have our own plan."

Mr Manifold, pictured, was speaking before the CRH annual general meeting, which was held in Dublin yesterday.

He revealed the group had received a number of expressions of interest in 45 business units the company put up for sale earlier this year following an asset review.

But shares in the global building materials giant shed over 3pc at one stage yesterday morning, despite what analysts said was an encouraging outlook from management.

CRH said that its business in Europe benefited from "improving trends" since the beginning of the year, with like-for-like sales 10pc, or about €250m higher in the January to April period.

But the increase was flattered by an easy comparison with the corresponding period in 2013, when bad weather hindered construction activity in the region.

In the US, like-for-like sales edged 2pc higher, despite very bad winter weather on the east coast that curtailed activity at the start of the year.

Mr Manifold said that despite the easy comparison in Europe for the first four months of the year, there was a noticeable better environment in a number of countries, including Germany, Poland, the UK and Switzerland. Shares fell more than 2pc after the news.

He also said it was too early to say how its business in Ukraine would be impacted by rising tensions in the country.

CRH is the biggest cement producer in Ukraine and last year generated earnings before interest, tax, depreciation and amortisation (EBITDA) of €24m there. Mr Manifold said that in the first four months of 2014, the business there is trading ahead of 2013.

"It is inevitable, given the state of uncertainty ... that there will be a slow down in construction activity," he said.

"Most of CRH's business in Ukraine is in the west of the country, which hasn't suffered as much as the east from instability.

CRH is predicting first half group EBITDA to be around €500m. That's €100m more than in the first half of 2013.

For the second half, Mr Manifold said that group EBITDA would be somewhat ahead of the €1.08bn generated in the 2013 second half.

The company spent €60m on acquisitions in the first four months of 2014.

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