The share price of CRH (LSE: CRH), the international building materials group, is currently down 1.4%, following publication of the company’s interim results for the first half of 2014, in which the company revealed that it had made pre-tax profit of €61m — a turnaround from the first-half loss of € 71 last year.
Group sales revenue grew 4%, although there was a marked geographical split, with European revenue increasing 7%, whilst North American revenue only gained 1%. On a like-for-like basis, sales rose 5%.
CRH reports that its on-going portfolio review is “progressing well”, and that businesses which no long meet its returns and growth criteria will be disposed of in a multi-year divestment programme that will amounting to around €1.5bn–€2bn. It also said that it had spent €130m on acquisitions and investments in the first half, on a total of 11 transaction, mainly in its American businesses.
The company says that earnings before interest, tax, depreciation and amortisation (EBITDA) grew in line with the guidance given at the last AGM, and were 27% up on H1 2013. Basic earnings per share were 6.1 cents, compared to a loss of 7.8 cents per share in H1 2103. The board is recommending that the dividend is maintained at 18.5 cents per share.
Commenting on the results, CEO Albert Manifold said:
“2014 got off to an encouraging start with favourable weather in Europe and continuing recovery in the US. We are pleased with the strong operating leverage which is reflected in margin improvement for the period. Economic indicators continue to be positive in the Americas, while in Europe we have seen some easing of trends in recent months. Assuming normal weather patterns and no major market dislocations, and with the benefit of contributions from acquisitions and cost saving measures, we continue to expect second-half Group EBITDA to be somewhat ahead of last year.“
At 1,436p at the time of writing, CRH’s share price is down 5.8% so far in 2014, compared with an essentially flat FTSE All-Share index (it’s up 0.2%). And over five years, CRH has dropped 22.5%, versus a gain of 43% by the FTSE All-Share over the same period.
