8-K

CRH PUBLIC LTD CO 8-K Report (Sep 3, 2004)

Filed September 3, 2004For Securities:CRH

Summary

CRH Public Limited Company filed a Form 6-K on September 3, 2004, reporting its interim results for the six months ended June 30, 2004. The company demonstrated strong financial performance, with a significant increase in sales and profits compared to the prior year. This growth was driven by a combination of robust organic performance, particularly in Mainland Europe and the Americas, and substantial contributions from recent acquisitions. Key financial metrics showed substantial improvements, including a 22% rise in sales to €5,670 million and a 57% increase in operating profit to €385 million. Earnings per share also saw significant gains. The company announced a 17% increase in its interim dividend, marking the 21st consecutive year of dividend growth, underscoring its commitment to shareholder returns. CRH also continued its strategic expansion, investing €700 million in 21 deals during the period, including a significant stake in a Portuguese cement producer.

Key Highlights

  • 1Sales increased by 22% to €5,670 million for the six months ended June 30, 2004.
  • 2Operating profit surged by 57% to €385 million, indicating strong operational performance.
  • 3Profit before tax saw a substantial rise of 71% to €275 million.
  • 4Earnings per share before goodwill amortization grew by 64% to 47.3 euro cents.
  • 5The interim dividend was increased by 17% to 9.6 euro cents per share, representing the 21st consecutive annual increase.
  • 6Acquisitions and investments totaled €700 million across 21 deals, reflecting a continued growth strategy.
  • 7The Americas Products & Distribution division showed a 33% increase in operating profit, highlighting strong performance in construction sectors.

Frequently Asked Questions

CRH's strong performance was driven by a combination of factors including a 'good organic bounce back' from weather-affected 2003 results, significant contributions from new acquisitions, and improved market conditions across much of its business. Specifically, Mainland Europe saw a better demand backdrop due to more normal weather, and the Americas Products & Distribution division benefited from continued residential construction and a recovering non-residential sector.

The strength of the Euro versus the US Dollar had an adverse translation impact on CRH's results. For the first half of 2004, this impact was approximately €4 million at the profit before tax level. The company noted that this was a 'modest' adverse impact due to the traditionally low US Dollar operating profits in the first half of the year.

CRH expects a 'healthy full year profit advance.' However, performance in the second half will be influenced by continuing high world energy prices and rising input costs, a lower incremental acquisition impact compared to the first half, and an anticipated adverse translation impact of approximately €26 million at the profit before tax level due to exchange rates. Despite these challenges, the company anticipates better market conditions overall and improved activity across its businesses.

CRH invested €700 million in 21 deals during the first half of 2004. A notable acquisition was the 49% equity stake in the Portuguese cement producer Secil for €333 million. The remaining investment was spread across 20 smaller to medium-sized deals in Europe and the Americas. These acquisitions are expected to provide significant incremental contributions to the company's earnings.