Building materials group CRH said yesterday that trading in the first four months of the year was favourable, but warned that rising energy prices may affect the overall performance if it is unable to pass on the price increases.

Speaking at the group's annual general meeting (agm) in Dublin, chairman Pat Molloy said the US operations had made a particularly good start to the year helped by mild weather and continuing strength in the housing market.

Backing up these comments, chief executive Liam O'Mahony said he saw no let-up in the strong housing markets in either the US or Ireland.

"We have the best cocktail you can get," he said. "Strong job creation and young people with money to spend."

Despite this positive news, the shares slipped yesterday, closing down 58 cent at €28.72, a decline traders attributed to profit-taking.

John Sheehan, an analyst at NCB, said the trading update was in line with expectations and that while rising energy prices were an issue, CRH appeared to be taking appropriate action to pass these costs onto its customers.

Commenting on the recent increase in energy prices, Mr O'Mahony said the main challenge for the future would be to try and mitigate the impact on the business. He said that so far the company wasn't having any difficulty passing on increases to its customers, particularly in the US, where its energy usage is at its heaviest in the unit that makes asphalt for road construction.

Since the start of the year CRH has completed more than 20 acquisitions worth a total of €700 million. This includes rival Halfen Dehe Group, a European producer of metal construction materials, which it bought earlier this week for €170 million, and Texas-based building materials distributor MMI, which it acquired last week for €280 million. Mr O'Mahony, who said yesterday that he would stay on as chief executive until the middle of 2008 despite turning 60 this year, declined to say how much money the group planned to spend on acquisitions this year, but said it was keen to expand all parts of the business.

Despite the upbeat trading statement, the agm got off to a rocky start when one attendee, Michael Ferguson, accused the company of unfairly dismissing him last August after 35 years with the company. Mr Molloy acknowledged the allegations, but declined to discuss them at the meeting.