Big acquisitions help CRH's profits soar

The Irish building materials group is expected to benefit from Trump's infrastructure plans

CRH enjoyed 41% earnings growth of 41% last year, thanks in part to a record spend on acquisitions in 2015.

reported a 69% jump in pre-tax profits to €1.7 billion in 2016, as the Irish building materials group felt the full-year benefits of a series of major acquisitions.

The Irish building materials giant saw earnings before interest, tax, depreciation and amortisation (EBITDA) beat its own expectations, as it climbed from €2.22 billion to €3.13 billion.

Sales were up 15% to €27.1bn, whilst pre-tax profits jumped 69% to €1.7bn. 

The results meant the board could recommend a final dividend of 46.2 cent per share, up from 44 cent in 2015.

Significant growth was seen in the Americas, Europe and in Asia.

CRH chief executive Albert Manifold said:

"We benefited from positive momentum in the Americas, and also in Europe, particularly in the Northern and Eastern regions where we operate.

"With our balanced portfolio of businesses, CRH is well positioned to capitalise on the ongoing economic recovery and we see continued growth for the Group in 2017."

The group has already spent €500 million on eight deals in North America so far this year, more than twice the overall amount spent in 2016.

Manifold revealed that CRH expects to see positive momentum in the US construction sector continue:

"We anticipate that the funding stability provided by the FAST Act (which authorises moderate year-on-year increases in federal funding for highways), together with expected increases in state spending on transportation improvements, will result in a positive trend for volumes, particularly in the second half of the year."

Speaking to Breakfast Business on Wednesday morning, Aidan Donnelly of Davy Stockbrokers said CRH's stock had benefited from US President Donald Trump's plans to bolster US infrastructure:

"The stock has been very strong, along with all the construction materials in the last couple of weeks, on the basis that there was a large infrastructure bill going to come through.

"And ultimately, given the fact that about 50% of their business is in the US, [CRH] would be a natural beneficiary of anything to do with road building, bridge building – all of that type of stuff."

CRH is the largest producer of asphalt and third-largest producer of construction aggregates (coarse materials such as gravel, sand and slag) in the US.

In Ireland, cement volumes grew by 18%, though the group that domestic pricing remained under pressure due to overcapacity.