Even before the deal has closed, building materials group CRH (CRH) has upgraded its target for synergies from its $3.5bn (£2.5bn) acquisition of Ash Grove Cement to $100m from $80m previously. Companies don't always hit the bullseye with integration targets, and even when they do, the savings don't always translate into improved earnings, but it still represents a positive beat.
The statutory results were restated following the sale of the Americas distribution business, but adjusted cash profits in the continuing operations grew 6 per cent to €3.15bn (£2.79bn) on a 50 basis point increase in the margin to 12.5 per cent. The group benefited from improved performance across its American and European divisions, which fed through to a 10.6 per cent return on net assets, up from 9.7 per cent in 2016. Management anticipates an improving macro trend (trade wars excepted), with GDP growth and job creation buoying the US market, while economic recovery solidifies in Europe.
Analysts at Bank of America Merrill Lynch are forecasting adjusted cash profits of €3.56bn, giving EPS of 196¢ in 2018 (up from €3.24bn and 166¢ in 2017).
| CRH PLC (CRH) | ||||
| ORD PRICE: | 2,456p | MARKET VALUE: | £ 23.3bn | |
| TOUCH: | 2,456-2,457p | 12-MONTH HIGH: | 2,955p | LOW: 2,354p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 1,727¢* | NET DEBT: | 39% | |
| Year to 31 Dec | Turnover (€bn) | Pre-tax profit (€bn) | Earnings per share (¢) | Dividend per share (¢) |
| 2013 | 18.0 | -0.22 | -41.0 | 62.5 |
| 2014 | 18.9 | 0.76 | 79.0 | 62.5 |
| 2015 | 23.6 | 1.03 | 89.0 | 62.5 |
| 2016** | 24.8 | 1.62 | 150 | 65.0 |
| 2017 | 25.2 | 1.87 | 227 | 68.0 |
| % change | +2 | +15 | +51 | +5 |
| Ex-div: | 08 Mar | |||
| Payment: | 04 May | |||
| *Includes intangible assets of €7.2bn, or 860¢ a share **Restated, £1 = €1.13 | ||||
