CRH is all set to continue with strong growth, albeit at a slower rate than last year. No forecasts have been made but pre-tax profit should rise from £253 million in 1997 to more than £300 million in 1998.
Chief executive, Mr Don Godson said there should be positive growth in all regions 'though probably at a slightly slower pace than hectic 1997'.
Benefits are expected to flow from major investments and plant improvements. CRH is also looking at value-enhancing acquisitions. The group spent £180 million on acquisition in 1997. Its ambition is to 'top that',
Mr Myles Lee, general manager finance, told The Irish Times. CRH will be looking at acquisitions across its product range in the traditional regions, but also in Poland and Argentina, where it already has a presence. The company is also looking at the possibility to going into electricity generation but discussions are at a very preliminary stage, said Mr Lee.
The Irish operations are likely to continue to record very strong growth. They should benefit from the continued buoyancy in the construction market which is projected to grow by more than 8 per cent.
The British businesses should produce further good results where construction is estimated to grow by around 3 per cent. The Northern Ireland market however, may remain sluggish.
Forecasts for construction activity varies in the US from flat to minus 3 per cent. Nevertheless, CRH sees this as a necessary correction. Also, its US operations are expected to record higher profits. Estimated growth rates vary for mainland Europe; from 1 per cent in Holland to 3 per cent in Belgium and minus 0.2 per cent in Germany.
CRH remains a strong cash generator and cash flow per share improved by 19 per cent to 76.90p. It continues to adopt a conservative approach to dividend payments which lag the growth in earnings and cash flow. This is reflected in the rise in dividend cover from 4.02 to 4.27. With continued core growth and acquisitions, CRH is well equipped to record another bumper year. And it expects greater investment interest in its shares from European institutions when Ireland becomes part of EMU.
