European distribution lifts CRH profits

CRH's pre-tax profit for the first half of the year jumped +280% to € 95 million (US$ 139 million) from € 25 million (US$ 36 million) a year ago. Revenues were up +7% to € 8.17 billion (US$ 11.7 billion) giving the company a pre-tax profit margin of just over 1%.

The company said its increase in profits was driven by its building products and distribution businesses in Europe and the Americas. The most striking increase among these was a +26% rise in revenues for the European distribution business, which came from a combination of organic growth and the acquisition of the Sax Sanitair and Bauking businesses in 2010.

CRH chief executive Myles Lee said, "The positive outcome for the first half of 2011 clearly demonstrates the advantages of CRH's product and sectoral end-use balance and the benefits of the extensive reorganisation and restructuring measures implemented in response to the exceptionally difficult markets of recent years.

"Looking to the second half, downward revisions to economic growth estimates over recent months, combined with the extreme turbulence evident in world financial markets over the past few weeks, have added to market risks and uncertainties."

CRH is known as one of the most acquisitive companies in the construction materials sector, but the first half of the year has seen a balance struck between buying and selling businesses. So far this year it has spend € 380 million (US$ 543 million) on seven acquisitions, but at the same time has sold various units for € 392 million (US$ 560 million).

Its acquisitions have focused on the heavy materials segment, with purchases of cement, ready-mixed concrete, asphalt and recycling businesses in Belgium, France and the US. Its disposals have included the sale of an insulation and climate control business and a minority shareholding in a French distribution chain.