Building materials firm CRH (CRH) has delivered record first half results showing a 42% jump in profits.
For the six months ended 30 June, pre-tax profit jumped to €707m from €497m a year earlier and revenue increased 11% to €13.2bn.
Earnings before interest, tax, depreciation and amortisation (EBITDA) climbed 36% to €1.54bn.
Despite this impressive growth the shares have remained stubbornly flat, drifting 12p (0.45%) to £26.58. The explanation is the very strong share price performance so far in 2019. The stock has rallied 28% year to date.
Looking ahead, the company said it anticipated further progress in the second half of the year with benefits from positive underlying momentum in all divisions as well as good contributions from acquisitions.
The company also touted improved year-on-year performance in its Americas material division, with second-half earnings (EBITDA) expected to be ahead of 2018.
‘CRACKS IN THE FAÇADE’
AJ Bell investment director Russ Mould says: ‘How has it achieved this feat (of record results) when you would expect the construction sector to be fairly depressed?
‘Well CRH… aims to be diversified across different products, geographies and end-uses to mitigate fluctuating demand at different points of the business cycle.
‘There are some cracks in the façade though. The numbers are flattered by positive currency movements and are also boosted by acquisitions.
‘Selectively buying up businesses is unashamedly part of the strategy, but organic growth is probably a better test of the firm’s foundations. Take acquisitions out of the equation and growth looks solid rather than spectacular.’