CRH prepares for €1.5bn sell-off as it reveals 2013 losses

Irish and Spanish subsidiaries of CRH are likely to be among an initial 45 business units worth €1.5 billion that the building materials giant has identified for sale, following the outcome of a portfolio review announced alongside the group's annual results yesterday.

Albert Manifold, CRH's new chief executive, said "it wouldn't be an unfair assessment" to conclude that many of the units that will be sold were acquired during European housing booms in the run-up to the crash.

CRH invested heavily in countries such as Ireland, Britain and Spain between 2000 and 2006 to capitalise on buoyant house building. "We bought into some bubbles," said Mr Manifold.

The group announced yesterday it has taken a €755 million writedown on the 45 businesses, which together are worth 10 per cent of its gross assets, according to finance director Maeve Carton.

A further tranche of business units, worth 20 per cent of CRH’s assets, are still under review and will either be “fixed” or sold, the company said.

Although CRH announced a pre-tax loss of €215 million and a marginal decline in sales to just over €18 billion, investors welcomed its results yesterday, with the stock closing the day up more than 7 per cent.

Mr Manifold, who took over Ireland's biggest company from Myles Lee in January, said last year had been a "year of two halves", with a decline in the first six months in the US and Europe giving way to growth in the second half.

Sales at its its European materials business fell by 5 per cent to just over €2.2 billion, while profits fell by more than three quarters to under €220 million. Profits at its European distribution division fell 27 per cent.

Revenue at CRH's European products division, which supplies manufactured products such as roof tiles and wall coverings, fell by 3 per cent to under €2.4 billion, mainly due to adverse weather conditions early in the year.

Mr Manifold said he is optimistic about the future for CRH's huge US operations as construction activity in the world's largest economy continues to pick up. He added that US construction is still only "firing on one of its three cylinders": housebuilding.

Sales at its Americas' products division rose by a tenth to more than €3 billion, although profits declined. Revenue at its US distribution division rose by 6 per cent to €1.66 billion while profits climbed 14 per cent.

Mr Manifold said there had so far been no impact on its three operations in Ukraine, which had continued to operate normally during the political violence there.

He said all of its staff were safe, and that the company would “wait and see” if the upheaval had any impact on its operations.

CRH announced a final dividend of 44.5 cents for a total payout for the year of 65 cents per share, the 30th year running that the company had maintained or increased its dividend.