Shares in CRH, the Irish building group, fell 3 per cent yesterday morning after a company statement on new acquisitions undershot market expectations. A late rally saw the share price close half a point down on the previous evening.
The group, one of the world's four-largest construction suppliers, said it spent €348 million on 24 new projects in the six months to January 1st, bringing aggregate outlay for the year shy of the predicted €1 billion mark.
Commentators said the announcement fell short of hopes that acquisitions would surpass €1 billion, prompting shares to slide 3.16 per cent to €12.25 in moderate volume on the Dublin stock exchange yesterday morning.
"There is a preference out there, given the strength of the balance sheet, that they can potentially hit above the €1 billion mark," said Mr Robert Eason of Goodbody Stockbrokers.
Analysts said there was also some wariness surrounding CRH shares because of the US economy's continuing softness and the impact the strong euro could have on repatriated profits if it remained at a historical high of approximately $1.04.
But CRH chief executive Mr Liam Mahony insisted the group was strongly placed to build markets across all divisions this year.
Davy Stockbroker analyst Mr Joe Burnell agreed that expansion last year would fuel growth.
"The latest acquisitions should add over €30 million to pre-tax profits and over four cents to earnings per share before goodwill in a full year," he said.
Despite spending almost €1 billion on acquisitions this year, year-end debt is expected to be largely unchanged at under €2 billion, leaving CRH with plenty of firepower to fuel earnings growth through acquisition.
One-third of acquisitions were in Europe with the balance in the Americas. CRH purchased 44 companies in the materials and products and distribution sectors over the year, including firms in Switzerland, Belgium, Britain, Estonia, the US, Chile, the Netherlands and Germany.
The year has been fraught for CRH. In the year to October its share price slumped 30 per cent. The fall-off accelerated when a number of its US subsidiaries were made parties to asbestos litigation.
