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Tarmac owner's profit up €344m in H1 2016 results but UK construction activity 'modest'

Tarmac owner CRH has reported a €344m surge in pre-tax profit for the first half of the year.

Profit before tax jumped to €407m for the six months to 30 June, compared with €63m for the same period the year before.

This was driven by its businesses in America as well as Europe, although it described trading in the latter as a more “moderate experience”.

Reported revenue of €12.7bn for the period was 35 per cent ahead of expectations.

This reflected a 13 per cent increase in the Americas, while proforma sales were 3 per cent ahead in Europe and 4 per cent ahead in Asia.

CRH said trading conditions in Europe for the first half of the year reflected the “modest impact” of early-stage economic recovery.

“While the impact of the recent UK vote to leave the EU remains unclear for the medium term, the outlook for our European operations for the remainder of this year is for a continuation of first-half trends,” it said.

It added that construction in the UK for the period increased “modestly” compared with the same period the year before, but added that sales volumes of cement, aggregates and ready-mixed concrete were ahead of expectations.

It said a “benign cost backdrop” was behind its improved proforma EBITDA in Europe, which increased 190 per cent to €362m, up from €237m in H1 2015.

European revenue was up 107 per cent to €3.6bn for H1 2016, compared with €1.8bn the year before.

Operating profit for the region rocketed 326 per cent to €162m, from €38m for the same period the year before.

CRH chief executive Albert Manifold said: “With continued positive momentum in the Americas and the modest impact of early-stage economic recovery in Europe, and assuming normal weather conditions for the remainder of the season, we expect further progress in the second half with full year reported EBITDA in excess of €3bn.”

CRH bought Tarmac, which was then known as Lafarge Tarmac, in Febraury 2015 as part of an asset sale ahead of the £26bn merger between Lafarge and Holcim.

CRH purchased the company along with several other assets for a total of £4.88bn.

The company made five additional acquisitions and investments during H1 2016, all of which were completed for a consideration of €25m. 

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