CRH hails 'positive' start to year as LFL sales rise 7% in Q1

Building materials group CRH hailed a "positive" start to the year on Wednesday as it posted a rise in first-quarter like-for-like sales and said earnings for the second half will be ahead of last year.

The company also announced an agreement to divest its European Shutters & Awnings business to StellaGroup for more than €0.3bn.

In the three months to the end of March 2019, group LFL sales were up 7% from the same period a year ago as sales volumes benefited from mild weather conditions and good momentum across most of its major markets. Sales growth was also supported by pricing progress across all major product lines.

The company said that in light of its strong balance sheet and cash generation, it will continue its share buyback programme with a further tranche of up to €350m to be completed before the interim results in August.

Group earnings before interest, taxes, depreciation and amortisation for the first half of the year are expected to be in excess of €1.5bn versus €1.13bn in the first half of 2018, CRH said. It added that in the absence of any major market dislocations, LFL EBITDA in the second half is expected to be ahead of the same period a year ago.

Growth in Americas Materials in the second half is expected to be supported by continued advancement in both residential and non-residential construction markets in the US along with increased federal, state and local infrastructure funding measures.

In Europe Materials, while the good start to the year with more favourable weather conditions is encouraging and CRH expects the second half to be ahead of last year, the strong rate of organic sales growth experienced in the first quarter is likely to moderate.

In Building Products, meanwhile, it sees growth across all business segments in Europe and the US in the second half.

"Against this backdrop and while maintaining a relentless focus on progressing our profit improvement programme, we expect like-for-like EBITDA in the second half of 2019 to be ahead of the second half of 2018 (H2 2018: €2.24bn)."