8-K

CRH PUBLIC LTD CO 8-K Report (Jul 1, 2003)

Filed July 1, 2003For Securities:CRH

Summary

CRH plc, an international building materials group, issued a pre-close interim trading update for the half-year ending June 30, 2003. The company anticipates reporting a pre-tax profit in the range of €155 million to €160 million, a decrease from €196 million in the prior year's first half. This reduction is attributed to generally unfavorable weather conditions across operations and a weaker US dollar, which adversely affects the translation of US profits into euros. Currency translation effects are estimated to account for approximately €10 million of this decrease. Despite these challenges, CRH expects a significant second-half profit contribution, which is typical for the company, and forecasts full-year pre-tax profit, before currency translation effects, to be ahead of the previous year, assuming a return to normal weather patterns.

Key Highlights

  • 1CRH expects H1 2003 pre-tax profit between €155 million and €160 million, down from €196 million in H1 2002.
  • 2Unfavorable weather and a weaker US dollar are the primary reasons for the anticipated profit decline.
  • 3Currency translation effects are estimated to reduce profits by approximately €10 million in the first half.
  • 4The Republic of Ireland showed strong performance in residential construction with double-digit volume increases.
  • 5Mainland Europe and the Americas experienced weaker trading patterns, impacted by severe winter conditions and adverse weather, respectively.
  • 6CRH maintained a strong cash flow and financial position, with net interest cover in excess of 12 times.
  • 7Acquisition activity remained robust, with over €550 million invested in the first half of 2003.

Frequently Asked Questions

The primary reasons for the anticipated decrease in profit are generally unfavorable weather conditions across CRH's operations and the adverse impact of a weaker US dollar on the translation of US profits into euros.

Currency translation effects are expected to account for approximately €10 million of the profit reduction in the first half. For the full year, a continuation of the current exchange rate would have an adverse impact of approximately €85 million, or about 10% of the prior year's pre-tax profit, due to the strong second-half bias of US profitability.

CRH anticipates a significant profit contribution from the second half, which is traditionally its more profitable period. Assuming normal weather patterns, underlying second-half activity levels are expected to be broadly similar to 2002. CRH expects full-year pre-tax profit, before currency translation effects, to be ahead of the previous year, although the weaker US dollar will have a more significant adverse impact on the reported results for the full year.

CRH's development teams were active, with acquisition activity amounting to over €550 million in the first half of 2003. This included the purchase of S.E. Johnson and 19 smaller bolt-on deals.