BUILDING MATERIALS group CRH expects earnings in the first half of this year to be similar to 2011, following a slow start in its European businesses.
The group told shareholders at its agm yesterday that, by the end of April, sales were 2 per cent ahead of last year.
However, CRH said a slow start in its European businesses left earnings before interest, tax and write-offs – a measure of the cash flow the company generates – lagging 2011.
Against this background, and given normal weather conditions in the US over the next two months, when its materials operations gear up for their busiest time of year, the group expects earnings to be close to the €574 million returned in the first half of 2011.
“With incrementally more positive US economic data and construction prospects for 2012 mitigating a more cautious view on the outlook in Europe, we continue, subject to no major financial or energy market dislocations, to expect overall like-for-like sales growth in 2012,” CRH said.
The group said that the exceptionally cold February hit trade in Europe. “This resulted in a like-for-like sale decline of approximately 6 per cent for January-February,” its statement added.
CRH went on to say that the rate of decline slowed subsequently as the weather improved, leaving sales for the four months ended April 30th at 4 per cent behind 2011. By contrast, in the US, which is responsible for just over half its revenues, the group benefited from unusually mild weather in the early months of the year.
Aided by this, and improving economic activity in the US, where most of its American businesses are based, its operations delivered an 11 per cent increase in sales.
The group’s sales are tied to construction activity in its markets, and that in turn can be affected by the weather.
The group spent €230 million on acquisitions in the first four months of the year, purchasing businesses in Germany, Nebraska and Texas.
Last year CRH switched its premier listing from Dublin to London. After yesterday’s meeting, chief executive Myles Lee said that, as a result, the group had seen a 3-4 per cent increase in the number of index-tracking funds in its shareholder base.
Nick Hartery succeeded Kieran McGowan as chairman of the group at yesterday’s meeting. Mr Hartery is a former vice-president at multinational Dell’s Europe, Middle East and Africa operations. Before that he held senior positions at Eastman Kodak and Verbatim.
