Irish
CRH reports 33% rise in 2011 pre-tax profits to €711m
By Finfacts Team
Feb 28, 2012 - 8:38 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). About 90% of CRH's shares are held outside Ireland. CRH's has a payroll of 75,000 and less than 2,000 are located in Ireland. It moved its primary stock exchange listing to London late last year and is a FTSE 100 company.

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 reported pre-tax profits of €711m for 2011, a 33% increase on the €534m reported in 2010.

Operating profits in the year climbed by 25% to €871m and revenues rose by 5% to €18.08bn from €17.17bn.

Myles Lee, chief executive, said today: “The positive profit outcome for 2011 demonstrates the advantages of CRH’s product and sectoral end- use balance and the benefits of the extensive reorganisation and restructuring measures implemented in response to the exceptionally difficult markets of recent years.

Assuming no major economic or energy market dislocations, we expect to generate further like-for-like revenue growth in 2012 with the achievement of targeted price increases a key priority. This combined with benefits from acquisitions completed in 2011 leads us to expect further progress in the year ahead”.

Results detail

Robert Eason of Goodbody commented: "CRH has reported PBT (before impairments) of €743m, which is up €85m yoy (versus guidance of +€20-50m) and compares with our forecast of €733m. EBITDA of €1,656m (+3% yoy) is in line with our forecast of €1.66bn and compares with guidance of “approximately €1.6bn” and consensus of circa €1,635m. As expected the variance to guidance reflects the favourable weather in Nov/Dec, leading to lfl sales +5% in these two months.

At a divisional level, the key variances were a stronger than expected outturn for US materials offsetting a weak performance in European Products (EBITDA -2%). Indeed, the latter was behind management guidance of EBITDA +10%. Net debt of €3.5bn was slightly higher than our expectations of €3.3bn, which we suspect is down to working capital and a function of the strong close to the year.

On the outlook, management is expecting to generate further lfl growth in 2012 (Goodbody is at +2%) and to make “further progress in the year ahead” (Goodbody is top end of consensus at 99c for FY12). As expected, management is relatively upbeat on the US, especially on residential and non-residential, while it is cautious on Europe, in particular in relation to Benelux and France.

Overall, we see no reason to change our top-end forecasts and believe that the current share price has already factored in the recovery in the US, given it trades on a PE of 16x."

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