CRH to dispose of Americas distribution business for €2.2bn as profits increase 10pc
CRH has announced that it is to dispose of its Americas Distribution business to Beacon Roofing for €2.2bn citing a lack of acquisition opportunities and a lack of a visible route to market leadership in the area.
CRH said that the proceeds of the sale will be reallocated to value creating acquisitions and investments, and in this context the group announced the acquisition of Fels, a German lime and aggregates business for over €600m.
Commenting on the transactions, Albert Manifold, CRH chief executive, said that the transactions demonstrated the company’s strategy of adding value through the efficient allocation and reallocation of capital, and in particular the deployment of capital into an attractive growth market in Europe.
"We see significant value creation potential from the Fels acquisition announced today, which will also be an exciting new development platform for CRH," Mr Manifold said.
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The announcement was made in line with the release of the groups interim results which showed that the company’s operating profit increase 10pc year-on-year to €647m in the six months to 30 June.
Earnings before interest, taxation, depreciation, and amortisation - a measure of a company’s operating cash flow - increased 5pc to €1.2bn in the six months to 30 June, supported by modest price recoveries in Europe and the Americas.
The results were driven by an increase in like-for-like sales which rose 3pc year-on-year in Europe, while in the Americas, like-for-like sales increased 1pc in the six month period.
Total sales for the six month period were €13bn.
CRH said that the increase in sales in Europe and the Americas “more than offset” the reduced activity in Asia, where like-for-like sales were down 8pc.
The decrease in sales in Asia was due to what the company said was a challenging market environment in the Philippines.
Net debt, at €6.4bn, was down €0.7bn year-on-year, while depreciation and amortisation charges of €528m were broadly in line with last year at the group.
The interim dividend has been increased by 2pc to 19.2c per share.