CRH says like-for-like sales for four months to end-April were 6% ahead of 2010
By Finfacts Team
May 4, 2011 - 7:19 AM

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CRH, the global building materials group, was formed through a merger in 1970 of two leading Irish public companies, Cement Limited (established in 1936) and Roadstone Limited (1949). CRH accounts for about 27% of the market capitalisation on the Irish Stock Exchange and up to 90% of CRH's shares are held outside Ireland. CRH's payroll of about 80,000 in Dec 2009, fell from 94,000 in 2008. Less than 2,000 are located in Ireland.

CRH plc, which is headquartered in Dublin, Ireland and is the second-biggest building materials supplier in the world, and the market leader in the United States, today issued a trading update in advance of its Annual General Meeting which is being held today at 11.00 am in Dublin. The group said like-for-like sales for the four months to end-April were 6% ahead of 2010.

CRH said group revenues for the first two months of 2011 showed a good improvement on last year’s level, benefiting from a much more favourable weather backdrop than in 2010. This cumulative early sales trend has, as expected, moderated through March and April; nevertheless like-for-like sales for the four months to end-April were 6% ahead of 2010.

CRH currently expects like-for-like sales for the first half of 2011 to be ahead of 2010, with EBITDA (earnings before interest, taxes, depreciation, and amortization) for the period also expected to exceed last year’s level (first-half 2010: €0.52bn).

American operations have seen a cumulative like-for-like increase of 3% in sales for the first four months. Assuming relatively normal weather patterns through May and June, we expect half-year sales and EBITDA to be ahead of 2010.

CRH says a total of 13 acquisitions and investments have been completed to date at a total cost of approximately €135m, comprising a further 6 bolt-on transactions by the Americas Materials business in the United States, a precast business also in the United States and a masonry business in Canada and 5 other acquisitions which it said will strengthen its Products and Distribution businesses in Europe. The pipeline of potential acquisitions remains good.

Interim Management Statement

Goodbody's Robert Eason commented: "As expected, the trading update reflects strength in Europe with lfl sales growth of 4% in Materials (strength in Switzerland, Finland and Poland offsetting challenging conditions in Poland, Ireland and Spain), +12% in Products and +7% in Distribution. While the US is weaker, lfl sales have grown by 3% in the first four months, with broadly flat volumes in materials and lfl growth of 3% and 13% in Products and Distribution, respectively.

Acquisition activity has also been healthy in the first four months with €135m spent on 13 deals (6 in US materials, 2 US products and 5 European P&D). The pipeline also remains 'good'.

At first glance, the update is a touch better than we had been expecting, especially in the Products and Distribution businesses in both Europe and the US. As a result, there is likely to be scope to move up our below consensus earnings forecasts of 87c for FY11. However, the trajectory of the recovery is still uncertain in our minds, especially in the US given continuing lack of clarity on infrastructure. As a result, we maintain our relatively cautious stance on the stock."

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