CRH COULD step up acquisition spending in emerging markets in eastern Europe and Asia, according to its chief executive, Myles Lee.
The multinational building materials group yesterday reported a 33 per cent increase pretax profits last year to €711 million from €534 million in 2010, while revenues grew 5 per cent to €18 billion from €17.2 billion.
The results were ahead of its own guidance, given last November, and analysts’ predictions of around €635 million.
CRH also confirmed it had spent €610 million last year on 45 acquisitions.
The group has a long record of growing through the purchase of smaller business.
Mr Lee said that it was likely to continue this policy, but said that it was likely to increase spending this year on acquisitions in emerging markets.
“We do have a big position in both Europe and the US and we want to hold that, but we also want to shift some of the weighting of the group to emerging markets,” he said.
Mr Lee added that CRH has already got a presence in eastern Europe and more recently expanded into Asia, where it has stakes in businesses in India and China.
Last year, it contributed to to the development of a new €1.5 billion plant operated by Yatai, the Chinese joint venture in which it has a 26 per cent stake.
He also pointed out that, in the US, Martin Marietta’s hostile bid for rival Vulcan could present opportunities for CRH if it were to succeed. He suggested that US regulators could force the newly-merged group to offload some operations to ensure it complies with competition law, which could result in suitable businesses coming on the market.
Around 45 per cent of CRH’s revenues come from the US, where it is the biggest supplier of asphalt through its ownership of Apac, and also has a spread of distribution and products operations.
Mr Lee said yesterday it has seen encouraging signs from its businesses there that chimed with positive economic data that has emerged from the US over the last two months. He noted that while revenues in its Americas products division actually fell 1 per cent in the first half of 2011, they increased by 6 per cent in the final six months of the year.
The company left its proposed dividend unchanged on last year at 62.5 cent. Mr Lee said the group had increased the payout to shareholders every year for 26 years up to 2009, and had left it unchanged after that.
The group’s earnings per share increased 35 per cent in 2011 to 82.5 cent from 61.3 cent. Operating profits, which exclude interest payments and tax, grew 25 per cent to €871 million from €698 million.
High energy prices, particularly in the European and American materials divisions, which produce cement and asphalt, hit margins as the group was unable to pass on the full cost to its customers.
