Company upbeat, analysts bullish on future

Analysis: Building materials group CRH is confident of clawing back ground, after poor weather and a stronger euro took the gloss off its interim figures yesterday, even if it is not quite as bullish as Irish analysts.

Analysts foresee the company overcoming a €77 million hit on currency translations to record an absolute growth in pre-tax profits from the €855.7 million in 2002.

CRH chief executive Mr Liam O'Mahony said such a result was "not out of the question" but "it would take a lot of things to come right to make up all of it".

One key factor could be the closing of the Cementbouw deal, the largest in the group's history. CRH has sent details of the Dutch acquisition to Brussels and expects EU clearance before the end of the year, given the limited overlap with existing operations.

Approval could come as early as next month and early clearance, along with contributions from other acquisitions currently the subject of due diligence, might make up the ground lost in the first six months of 2003.

The other advantage of the €693 million Dutch deal is that it will even out the euro/dollar balance in CRH's portfolio, mitigating the impact of currency translation on the company's bottom line.

However, finance director Mr Harry Sheridan said the stronger euro would not determine the group's acquisition's policy going forward.

"CRH is very comfortable having a slight bias towards the US for investment at the moment, based on our experience, on population growth, on demographics and on the flexibility it affords.

"The US is much more attractive than Europe if you want to make money."

Mr O'Mahony said there were signs of a recovery in the key US market, although the situation in Europe seemed more stagnant. Though it was still too early to be sure of a US recovery, CRH was well-positioned to capitalise on any upturn, he said.

Executives were bullish about the prospects of further acquisitions, having spent €577 million in the first half.