CRH predicts 23% rise in pre-tax profits for 2006
Building materials firm CRH has said it expects to record a 23% rise in its pre-tax profits for 2006.
The company said today that profits were expected to be up €300m on the 2005 figure of €1.279bn.
CRH, the second largest firm on the Irish Stock Exchange, is due to issue its preliminary results for 2006 in early March.
CRH, which also owns the UK’s largest brickmaker Ibstock, said it expected the 23% profits rise despite the impact of a weakening US construction market.
The Dublin-based building materials firm credited a strong performance in 2006 following record organic growth and a significant contribution from acquisitions over the past 18 months.
The profits hike came in the face of higher input costs and declining US residential construction, which caused growth rates in its American products operation to moderate through the second half of the year.
In line with comments from other operators, CRH said UK brick demand continued to decline during 2006, but it added that cost controls and price increases helped maintain profitability in the second half of the year.
Ibstock – named after the Leicestershire village where the company is still based – employs a total of 1,960 people across the UK. It has 24 brick and paver plants with a total annual capacity in excess of 900 million bricks.
While brick demand declined in 2006, CRH reported a strong performance in other parts of its European products division. In particular, structural operations such as floor and wall elements and drainage products delivered excellent results following better market demand.
CRH said it expected the European products division to achieve much improved full-year operating profits, along with a step-up in margins.
The company added: “In the second half, trading across our European businesses gathered momentum and, although US residential construction declined, our American operations continued to perform well.”
CRH said total acquisition spending in the second half amounted to €400m in the second half, adding to the €1.3bn it agreed to pay in August for Ashland Paving and Construction. Ashland is an aggregates, asphalt and highway construction company with around 9,700 employees and extensive operations in 14 mid-western and southern states.
