Full year results due from CRH and Kerry

All eyes on first presentation of CRH’s new CEO and a portfolio review of the building materials giant

All eyes will be on the commentary of new CRH CEO Albert Manifold, in his first presentation as chief executive. photograph: alan betson

All eyes will be on the commentary of new CRH CEO Albert Manifold, in his first presentation as chief executive. photograph: alan betson

Mon, Feb 24, 2014, 01:01

Multinational food giant Kerry Group and building materials company CRH are both expected to report full-year results tomorrow.

With regard to CRH, all eyes will be on the commentary of new CEO Albert Manifold, in his first presentation as chief executive and the outcome of a strategic review. The review, which was announced last November, will likely result in the disposal of non-core businesses.

Davy stockbrokers is forecasting EBITDA of €1.6 billion for this year, 14 per cent ahead of CRH’s 2013 figure. This is on revenues of €17.7 billion.

“We expect that continued growth in the Americas, a gradual recovery in Europe and extensive restructuring initiatives can, over time, materially improve returns in the business,” Davy analyst Barry Dixon said.

He said CRH has the strongest balance sheet in the sector, which means, unlike its peers, its powerful cash generation can be invested in high-return businesses. Earlier this month, ratings agency Fitch has downgraded to negative the outlook for CRH. Following a weak trading performance in 2013, Fitch expects CRH’s credit metrics to slightly deteriorate.

Kerry Group’s EBITA is forecast to grow 8.2 per cent to €604.9 million, with earnings per share of 254.5 cent. Forecast net debt of €1.1 billion is down modestly year-on-year, despite cash outflows on restructuring and increased capex.

Davy equity analyst Jack Gorman says growth opportunities remain in nutrition, taste and emerging markets, which he expects will be the focus for internal investment this year.

Trading conditions remain challenging in Kerry Group’s consumer foods division. Like for like trends in consumer foods have deteriorated through 2012/13, largely due to continued competitive intensity and an increased impact from discontinued volumes.