Interim Management Statement - May 2008
07 May 2008
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 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.
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.
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.
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.
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 |