Profits up at CRH

AGAINST a background of higher input costs and declining US residential construction, CRH, the Irish building materials group, achieved an increase in operating profit of 27% to €1.76 billion (£1.2 billion) for the year ended 31 December 2006. Pre-tax profit for 2006 rose 25% to €1.6 billion (£1.1 billion) on revenues that were up 30% at €18.7 billion (£12.8 billion).

In CRH’s European Materials business, a good first-half improvement and stronger momentum in the second half resulted in a full-year operating profit of €421million, representing an increase of 12% over 2005. Total operating profit from European operations (Materials, Products and Distribution) improved by 20% to €814 million.

Meanwhile, Americas Materials achieved a 45% increase in operating profit to €475 million, reflecting significant success in the recovery of higher input costs, a substantial organic operating profit advance and good acquisitions contributions. Total operating profit for CRH’s US operations improved 33% to €953 million.

CRH’s total acquisition spend last year was a record €2.1 billion (£1.43 billion), with over 30 new businesses added to the group. A further €335 million has been spent on bolt-on acquisitions since the beginning of this year.

Despite plans to acquire more businesses, the company raised its dividend for the year by 33% from 39p to 52p.

Commenting on the results, CRH chief executive Liam O’Mahoney said: ‘2006 was another year of delivery by CRH both in development, with a record acquisition spend, and operationally, with record organic growth and strong improvements in all key financial performance measures.

‘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.’