07 May 2008
Interim Management Statement
CRH plc, the international building materials group, is issuing
the following Interim Management Statement, which is in accordance
with the reporting requirements of the EU Transparency Directive,
in advance of its Annual General Meeting which is being held today
at 11.00 am in Dublin.
Overall profitability in the seasonally less significant
January/April period, which traditionally accounts for a small
proportion of annual profit before tax, is behind the very strong
performance experienced in the early months of 2007.
Europe
Europe Materials has had a positive start with significant
advances in Poland and Ukraine more than compensating for declines
in the Irish and Spanish markets, where the benefits of continuing
growth in infrastructure investment have been outweighed by sharp
reductions in residential construction activity.
In Europe Products, trading in January and February was well
ahead of 2007. However, March results were lower than last year due
to an earlier Easter and harsher weather conditions. As expected,
April saw a rebound and cumulative results to date are in line with
the very strong start experienced in 2007.
For Europe Distribution, lower activity levels and profitability
in our DIY operations in the Benelux due to weakening consumer
confidence more than offset the benefits of a generally good start
across our builders’ merchanting operations.
Overall for Europe, results to date are similar to 2007 and
organic growth remains underpinned by a continuing strong dynamic
in central and eastern countries.
Americas
As is normal for Americas Materials, the highway construction
season in most of its markets is just getting underway. While
energy costs, in particular diesel, will be higher in 2008 our
liquid asphalt winter-fill programme has been encouraging.
Early indications point to a continuation of the positive pricing
environment and slightly softer volume trends of recent years.
Americas Products is seeing ongoing declines in US residential
construction, and some evidence of moderation in forward indicators
for non-residential activity. Further significant cost reduction
initiatives have been implemented across our various
operations.
To date while Americas Distribution operating margins are lower,
turnover in US$ is ahead of 2007 reflecting the acquisition last
November of Acoustical Materials Services. Although the difficult
trading conditions experienced in 2007 have continued into 2008 the
rate of decline in like-for-like sales has eased over the past two
months.
Overall for the Americas, results to date are behind 2007 mainly
reflecting continuing difficult trading in residential markets.
Development
On the development front a total of approximately euro 0.35
billion has been invested to date in acquisitions and investments.
In addition, transactions in China, India, and the United States
which have already been announced in 2008 are expected to be
completed later in the year at a cost of approximately euro 0.85
billion.
Share Buyback
The share repurchase programme announced on 3 January 2008,
which is limited to a maximum of 5% of the 547 million Ordinary
shares in issue at December 2007, is ongoing and to date CRH has
repurchased 11.4 million shares at an average price of euro 24.40
per share.
Outlook
The further depreciation of the US Dollar over recent months,
together with weaker trends in a number of markets, has made our
goal of achieving another year of profit and earnings growth more
challenging. However, CRH’s profitability and cash flow
remain well underpinned by its geographic, sectoral and product
balance and as we move into the busier and more significant trading
months we have intensified our emphasis on operational efficiency
and commercial delivery across our businesses.
This interim management statement contains certain
forward-looking statements as defined under US legislation. By
their nature, such statements involve uncertainty; as a
consequence, actual results and developments may differ from those
expressed in or implied by such statements depending on a variety
of factors including the specific factors identified in this
management statement and other factors discussed in our Annual
Report on Form 20-F filed with the SEC.
Contact CRH at Dublin 404 1000 (+353 1 404
1000)
Liam O’Mahony, Chief Executive
Myles Lee, Finance Director
Éimear O’Flynn, Head of Investor Relations
Maeve Carton, Group Controller
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