CRH sells US distribution business

Regionally, management saw “stabilising trends” in some parts of Europe with like-for-like sales growth of 3 per cent. Across the Americas management was satisfied with growth of 1 per cent in like-for-like revenues, notwithstanding less favourable weather conditions. Like-for-like cash profits here grew 6 per cent after good cost management. Asia was the worst-performing geography, suffering a like-for-like sales decline of 8 per cent. This reflected increasing competition and a challenging environment in the Philippines. The combined performance of all regions drove the cash profit margin up by 20 basis points to 9 per cent.

Management wasn’t exaggerating in its observation of “significant M&A activity”: it spent €632m on 13 acquisitions and investments, €619m of which landed in the Americas, where the materials division gained eight bolt-on acquisitions. Among these was Mulzer Crushed Stone, which has six quarries and four ready-mixed concrete plants among other features. In the same period, the group realised disposal proceeds of €145m. In addition, the sale of a German cement plant and grinding station for a combined enterprise value of €349m has been agreed, subject to regulatory approval.

The group successfully reduced its net debt by €0.7bn to €6.4bn, following a focus on cash and debt control. This mitigated the impact of the €19m used for the early redemption of some of CRH’s dollar-denominated bonds, which were due to mature in 2018. Management expects better operating cash inflows in the second half.

Analysts at Bank of America Merrill Lynch forecast adjusted cash profits of €3.3bn and EPS of 170¢, up from €3.1bn and 155¢ in 2016. As the two deals announced today have not yet closed, their impact has not been included in these updated forecasts.