7th May 2014 11:02
LONDON (Alliance News) - Irish building materials group CRH PLC Wednesday reported a 10% increase in European like-for-like sales in the first four months of the year, as economic conditions across the region continued to improve, but it said it has experienced problems in the US.
In an interim management statement, the company said its European operations have not been affected by the bad weather which plagued 2013 and contributed to a loss for the year.
In February, CRH posted a pretax loss of EUR215 million for 2013, compared with a profit of EUR646 million in 2012, even though revenue dipped only slightly to EUR18.0 billion, from EUR18.1 billion.
The company, which has operations across Europe and the Americas, was hit hard by the financial crisis and ensuing economic downturn, which weighed heavily on construction markets. Last year, it emabarked on a review of its operations in an attempt to turn around its profit margins and deliver better returns. It has completed the first stage of the review and put businesses that don't meet its new returns criteria up for sale.
CRH on Tuesday said weather patterns in the US were much less positive than in Europe and many regions, particularly in the eastern half of the country, experienced very cold conditions which limited early season building activity for the second consecutive year. As a result, despite overall economic progress, like-for-like sales during the period for its Americas operations were just 2% ahead of 2013.
The company said it expects trading in the US to improve in May and June, as the 2014 construction season gets underway for its materials operations.
"We also expect continued improvements in results for Europe in May and June, underpinned by the stabilisation of the economic backdrop in our major European markets," CRH said.
As a result of these factors, CRH expects group earnings before interest, taxation, depreciation and amortisation in the less-significant first half of the year to be approximately EUR500 million up from EUR400 million.
During the period, the company made seven acquisitions at a cost of EUR60 million, most of which relate to bolt-on transactions in the company's US Products business.
As announced earlier this year, the firm said it expects to deliver total savings of EUR535 million during the period 2012-15.
Looking ahead to the second half, the company said it expects earnings before interest, taxation, depreciation and amortisation to be somewhat ahead of 2013, when it amounted to EUR1.08 billion.
The stock was trading at 1,679.00 pence Wednesday, down 61.00 pence or 3.5%, making it the third biggest faller in the FTSE 100.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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