Friday 24 November 2017

CRH's profits jump as United States finally repays investment

Albert Manifold
Albert Manifold
John Mulligan

John Mulligan

The chief executive of Ireland's biggest company, building materials firm CRH, believes it will benefit from years of "cyclical construction growth" in its major markets as economies improve.

Albert Manifold was speaking to investors as the firm reported better than expected results for 2014, with earnings before interest, tax, depreciation and amortisation (EBITDA) climbing 11pc to €1.64bn.

Revenue at the group rose 5pc to €18.9bn last year. It generates about 60pc of its EBITDA in North America.

Chief financial officer Maeve Carton said that the group is "very well placed" to take advantage of opportunities that present themselves in the industry in the near and longer term.

Mr Manifold said the company experienced a strong start and finish to 2014, and that margins rose in all six divisions, helped by reorganisation and restructuring, as well as a review of underperforming assets.

He added that while the US had performed well last year, Europe has been largely lacklustre. However, he said there are signs that markets such as the Netherlands, which had its own property bust, are now improving.

He said that France will remain weak, although the company entered a deal last year that gives it an option to eventually wholly acquire a joint venture partner there, Samse.

Earlier this month, CRH confirmed that it had signed a deal to pay €6.5bn for assets being sold by rivals Lafarge and Holcim as those two firms offload assets to win anti-trust approval for their merger. CRH will hold an EGM on March 19 to secure shareholder approval for the acquisitions.

That will give CRH a foothold in countries such as the Philippines, where Mr Manifold said he had been trying to gain a presence for 15 years. It will make CRH the second-biggest cement maker in the country.

"It's very profitable business, with growth to 2020 and beyond."

"For us in 2015, our key objective is to close that deal and bed that (Lafarge-Holcim) deal down. We will still go out and acquire businesses, because the run-rate of our business demands us to do that," said Mr Manifold.

He said that CRH will use its platforms in India and China to slowly grow the company's presence in Asia.

"We invest a dollar in Beijing the same as we invest a dollar in Boston - we expect the same returns," he said.

Mr Manifold said the pipeline of potential acquisitions for CRH is "very strong and very good".

"The key for us is to retain our discipline," he added.

Mr Manifold also said the company's activities in Ukraine hadn't been significantly impacted by unrest there, as most of its business is in the west of the country.

Shares in CRH closed up 0.5pc in Dublin at €25.10.

Irish Independent

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