CRH warns of 10% earnings fall

CRH warns of 10% earnings fall
Published: 24 August 2010

CRH warned core earnings would fall 10 per cent this year as the U.S. economic recovery falters.

Worries of deflation and a double-dip recession have dominated investor sentiment in the U.S. in recent weeks and CRH Chief Executive Myles Lee said that although he did not see a return to recession, the softening economic data was not good.

"The economic news out of the U.S. has been disappointing and is lagging expectations. It looks now clear that the economic pick up there, while coming through, isn’t going to be as fast-paced as earlier expected," Lee told Irish broadcaster RTE.

In its Interim Results for the six months ended 30th June 2010 EBITDA was €520m, in line with the guidance provided in the Trading Update Statement of 7th July 2010 (H1 2009: €651 million). Operating profit fell 51% to €118m (2009: €241m).

Profit before tax of €25m was 77% below first-half 2009; the July Update Statement indicated that profit would be close to breakeven. First-half earnings per share fell 79% to 2.6c (H1 2009: 12.2c).

During the first six months of 2010, the Group spent €159m on 14 acquisitions and investments. The company said it made further progress on the development front in July and August with a further six transactions at a total cost of €86m. It added that it is seeing a good flow of bolt-on opportunities and while it continues to monitor wider developments in the industry it is maintaining a patient approach in progressing transactions in light of the challenging market backdrop.