CRH issue 2006 trading statement
CRH plc, the Dublin-based international building materials group, have issued a trading statement ahead of the 6 March announcement of their preliminary results for the year ended 31 December 2006. Following a year of record organic growth and a significant incremental contribution from acquisition activity, full-year pre-tax profit is expected to be approximately €300 million ahead of the €1,279 million reported for 2005, representing an increase of over 23%.
CRH say first-half activity benefited from an especially strong performance in the Americas and an improved performance in Europe, resulting in a €143 million increase in pre-tax profit to €526 million (2005: €383 million). During the second half of 2006 trading across the company’s European businesses gathered momentum and American operations continued to perform well, despite a decline in US residential construction. Helped by favourable weather in the final months of 2006, CRH say second-half pre-tax profit will show a very satisfactory advance.
Meanwhile, total acquisition expenditure in the second half of 2006 amounted to €1.3 billion, which included the Group’s largest ever transaction with the acquisition in August of Ashland Paving and Construction Inc (APAC), a leading US aggregates, asphalt and heavy construction company. This, combined with a first-half acquisition spend of €0.8 billion, resulted in a record net acquisition spend of approximately €2.1 billion for 2006.
Commenting on the group’s acquisition initiatives, CRH chief executive Liam O’Mahony said: ‘Development momentum in 2006 has been very strong with a total of 69 acquisitions concluded. This record €2.1 billion acquisition spend will be an important factor in further driving growth across all CRH divisions.’
He added that the overall outlook for European construction demand remained positive, while the US was expected to benefit from the company’s broad geographic, product and end-use diversity, despite the decline in new residential construction.
‘Notwithstanding recent US dollar weakness, with an ongoing focus on price and cost-effectiveness across our operations, further benefits from the record 2006 acquisition spend and a sustained emphasis on development, we expect to achieve further progress in the year ahead,’ he said.
