CRH posts another credible advance

CRH posts another credible advance
Published: 02 March 2005

CRH, based in Ireland, generated a turnover of €12,820m in 2004, an increase of 15.7 per cent, but at constant currency rates the advance represents some 22 per cent.  The EBITDA rose by 15.8% to €1,741m, with the trading profit rising by 19.3 per cent to €1,247m.  The American contribution fell from 54.3 per cent of turnover and 53.6 per cent of turnover in 2003 to 49.3 per cent and 47.5 per cent respectively last year, reflecting both increased acquisition activity in Europe, notably Cementbouw in The Netherlands and Secil in Portugal, and the weaker US dollar.  Looking at the split by activity, heavy building materials, including the production of close on 12Mt of cement in Europe, represented 40.5 per cent of turnover and 49.0 per cent trading profit, building products accounted for 36.7 per cent of turnover and 35.7 per cent of the trading profit and distribution for the remaining 22.8 per cent of turnover and 15.3 per cent of profit.  Capital expenditure in existing operations rose by 29.4 per cent to €520m, but spending of acquisitions and development expenditure was 42.9 per cent lower at €922m. The gearing level stood at 46 per cent at the end of 2004, an improvement from 48 per cent a year earlier. 
 
In the Irish Republic, turnover rose by 9.8% to €804m, reflecting a strong growth in construction activity, but the trading profit emerged 0.8% lower at €129m as higher costs did not fully reflect the cost increases.  This was to a large extent a reflection of the intense competition in the ready-mixed concrete market where the number of competitors has increased notably in recent years.  Housebuilding was the strongest performing segment, with unit completions rising by some 12 per cent and there are now signs of an improvement in the non-residential field as well.  Great Britain and Northern Ireland contributed an 8.2 per cent increase in turnover and the trading profit rose by 12.3 per cent to €64m.  Better housing and infrastructure activity in Northern Ireland boosted the sale of heavy building materials, while in Britain, the Ibstock brick business improved profit, margins and market share in spite of a 0.5 per cent decline in brick deliveries.
 
Continental European turnover increased by 35.9 per cent to €4,939m and had the benefit of an additional nine months of Cementbouw and an initial seven months of Secil as well as volume growth in Finland, the Baltic states, Poland, Switzerland and, most notably, the Ukraine, where cement shipments were up by a quarter.  Margins also improved thanks to better capacity utilisation and the trading profit advanced by 55.0 per cent to €462m.  The Swiss cement volumes were helped by infrastructure projects and the acquisition of additional downstream operations.  Some volume reductions in Spain were offset by better prices and lower costs.  The Dutch lime-sand brick operations did very well in spite of a difficult domestic construction market.