Tuesday 23 October 2018

'Stabilising' markets give first-quarter boost to CRH

CRH chief executive Albert Manifold
CRH chief executive Albert Manifold
John Mulligan

John Mulligan

Ireland's biggest company, building materials giant CRH, expects its first-half earnings before interest, tax, depreciation and amortisation (Ebitda) to be ahead of the €1.12bn it generated in the first six months of 2016.

It also expects second-half Ebitda to rise.

The company, whose chief executive is Albert Manifold, said that like-for-like group sales were 3pc higher in the first quarter, with "stabilising trends" in key markets in Europe and a positive business environment in the US.

It noted that the UK market remained buoyant in the first quarter, despite the approach of Brexit. CRH said that volumes and prices of aggregates, ready-mixed concrete and asphalt there were ahead of the first three months of 2016, with cement volumes marginally behind.

CRH also said that its lightside business - which includes products such as construction accessories, shutters, awnings and fencing - had performed well in the UK in the latest period.

"The broad-based recovery evident in a number of key markets in 2016 has continued into the first quarter of 2017," said CRH of its business in Europe. "This contributed to solid demand, albeit with mixed weather and competitive pricing in some regions."

It added that like-for-like sales rose 6pc across its three divisions in Europe. Like-for-like sales in its lightside business in Europe were up 5pc, and were 8pc higher in its heavyside business, which includes asphalt, aggregates and cement.

In its Americas materials unit, like-for-like sales edged 2pc higher in the first quarter. Asphalt volumes and construction revenues were higher.

"This markedly seasonal business typically sells less than 10pc of annual asphalt volumes and less than 20pc of aggregates and ready-mixed concrete volumes in the first quarter of the year," CRH said of the Americas division.

In its Americas products division, like-for-like sales were in line with those of the first quarter in 2016. CRH said that in non-residential activity there was continued year-on-year growth, with "positive trends in most segments". It also said that home building growth continued.

"While there is no news on the development front, we expect that given the strength of its balance sheet, acquisition activity will continue," analysts at Davy Stockbrokers noted. "This will further enhance the earnings ability of the business."

CRH holds its AGM today.

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