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Interim Results

CRH pre-tax profits up 27%

24 August 2017 07:20

CRH's pre-tax profits rose by 27% to €517m in the six months to the end of June - in line with April's guidance - and the group also announced the agreed sale of its Americas Distribution business and the acquisition of Fels.

First half sales revenues were up 2% at €12,997m and EBITDA rose by 5% to €1,175m.

Margins increased to 9.0% from 8.8% last time.

The group has declared a dividend of 19.2 cents per share - up 2%.

Chief executive Albert Manifold said: "We have had a satisfactory start to 2017 with stabilising trends in key European markets and EBITDA growth in the Americas.

"The acquisition and divestment activity announced by the Group today, demonstrates our ongoing strategic focus on allocating and reallocating capital at attractive multiples, while our significant Balance Sheet capacity ensures we are well positioned for further growth.

"I am pleased to report, in line with our progressive dividend policy, that the Board has decided to increase the interim dividend by 2.1% to 19.2c per share.

"For the second half of the year, despite currency headwinds and continuing challenging conditions in the Philippines, we expect a continuation of the first half momentum experienced in Europe and EBITDA growth in the Americas, which will result in another year of progress for the Group."

CRH also announced two significant transactions as part of its continuing focus on growth and value creation through effective portfolio management and capital reallocation.

The transactions comprise one divestment in the US and one acquisition in Europe.

Both transactions are subject to regulatory approval. In the Americas, CRH said it had reached agreement to sell its Americas Distribution business to Beacon Roofing Supply, Inc. for a total consideration of $2.63 billion in cash.

Americas Distribution, which has been part of the CRH Group for over 20 years, has historically executed a growth strategy based on focused acquisitions, selective greenfields and investments in private label products.

CRH said that while the business had delivered significant improvement in performance and returns in recent years, the absence of value accretive acquisition opportunities and a lack of visibility as regards a route to market leadership, had resulted in CRH's decision to divest this business now at an attractive valuation.

It said that in accordance with the group's strategy, the proceeds from the divestment of Americas Distribution would be reallocated to value creating acquisitions and investments and CRH's Europe Heavyside business had agreed to acquire Fels, a leading German lime and aggregates business, for €0.6 billion (EV).

With nine production locations in Germany and one each in the Czech Republic and in the Moscow region of Russia, Fels has leading market positions in the lime markets in each of these areas and over 1 billion tonnes of high quality limestone reserves. The Company has been a division of Xella International S.A. since 2001.

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