CRH reports jump in full-year operating profits

CRH saw operating profits jump last year, driven by a strong performance at its heritage businesses and from acquisitions, although net debt rose substantially.

The construction supplies manufacturer and DIY store operator saw full-year sales rise by 25% over 2015 to reach €23.64bn, which drove a 33% increase in earnings before interest, taxes, depreciation and amortisation to €2.2bn.

FTSE 100-listed CRH said the latter was ahead of the company's own guidance provided in November, with its contining business in the US registering a 51% jump in EBITDA, versus just 4% for its European operations.

Operating cash flow improved to €1.3bn from the €900m seen in the prior year.

Year end net debt jumped from €2.5bn to €6.6bn but was nevertheless below the company's guidance.

At the end of July and in mid-September the firm closed the acquisition of 11 assets from Lafarge and Holcim in Europe and America and the Philippines, respectively, for a total consideration of €6.6bn.

As a proportion of EBITDA, the company's indebtedness rose to three times profits, in comparison to 1.5 times in 2014.

The company's EBITDA/interest cover ratio, one measure of a firm's ability to service its debt, improved from 6.7 in 2014 to 7.5.

Given the group's strong track record in converting a significant proportion of its EBITDA into operating cash flow, CRH was on track to deliver on its commitment to restoring its debt metrics to normalised levels in 2016, management said in a statement.

Albert Manifold, Chief Executive, said: "Recently there has been some uncertainty about the pace of global growth. Our focus remains on consolidating and building upon the gains made in 2015, and against this backdrop we believe 2016 will be a year of continued growth for the Group."

Europe was seen remaining broadly stable, with markets in Switzerland, Belgium, Germany and France flat, while growth was expected to continue in the UK, Ireland and the Netherlands.

The US economy was anticipated to continue growing in 2016 at a pace similar to last year's.

Funding for infrastructure in the USA was projected to grow moderately, chiefly as a result of better state finances and the passage of a new federal programme (FAST) which secured highway funding until 2020.

Good demand was anticipated to continue in Ontario, Canada and in the Philippines.

The company kept its full-year dividend payout per share unchanged at 62.5 cents.

As of 08:31 GMT stock in CRH was higher by 4.49% to 1,933p.