CRH, the building materials giant, believes it is on the cusp of a 10-year cycle of growth, as the company cheered investors with a strong interim results topped with a $1.3 billion deal to buy CR Laurence, a US glazing products supplier.
Albert Manifold, CRH's chief executive, said a bounce back in US building markets and an expectation that US infrastructure spending will rise in future, is fuelling his belief that the company had entered a major phase of expansion.
Maeve Carton, CRH's chief financial officer, also confirmed that following the deal to buy CRL, the group will avoid any more major acquisitions for up to 18 months. The focus, she said, would be on restoring CRH's debt ratios following the deal, which comes on the heels of its €6.5 billion buyout of assets from the lafarge-Holcim merger.
CRH grew revenues by 13 per cent in the first six months of its financial year, buoyed by strong growth in the Americas, but against a challenging background in Europe.
The group is forecasting “good progress” for its full-year earnings as it said it will acquire a US glazing manufacturer for $1.3bn.
Revenues rose by 13 per cent to € 9.4bn in the six months to end June 2015, down 1 per cent in Europe and up 26 per cent in the Americas. Earnings (EBITDA) from continuing operations advanced by 10 per cent to €555m, buoyed by strong growth in the Americas. Profit before tax rose by €2m to €63m.
CRH chief executive Albert Manifold said: “We have made good progress towards achieving our goal of restoring margins and returns to peak over the cycle, with further margin improvement in each operating division.”
CRH said that in Ireland, construction activity continues to "gather momentum".
With the benefit of cost reduction initiatives and the resizing of its businesses over the past number of years, CRH said that operating profit and margin improved in Ireland and it is in a strong position “to benefit from the continued growth”.
CRH will maintain its interim dividend at 18.5 cent a share.
Looking to the second half of the year, CRH said that the outlook in Europe is for a mixed macro-economic backdrop, with earnings forecast to be “broadly in line” with 2014.
In the Americas, CRH expects the “positive momentum” seen in construction markets during the first half of the year to continue into the second half.
