Morning Equity Briefing
CRH
CRH ID
US bolt-on activity continuing in 2010
Robert Gardiner
| Closing Price | 1784c | Rating: | Outperform | 30/06/09 |
Bolt-on activity continues for CRH in the US with the group reported to have acquired the assets of AL Blades & Sons, a general contractor and construction materials manufacturer based in New York. AL Blades was founded in 1922 and employs more than 250 people. The group operates from seven locations in New York state, producing aggregates and asphalt. No consideration was quoted in the report. The acquisition looks typical of the deals CRH tends to foster in the US through close contact with small-to-medium-sized operators.
Meanwhile, US Concrete reported earnings for the quarter ended December 2009 yesterday (March 10th). The group, which is a top-ten producer of readymixed concrete, reported that volumes fell 34% in the quarter while prices were marginally higher. Not surprisingly, the poor weather in January and February has hurt trading and volumes in the business year-to-date are 20% below the group's expectations.
No doubt the same poor weather conditions will have impacted CRH's RMC operations in the US. However, the first two months of any year represent only a small portion of CRH group earnings and better weather through Q2 and Q3 will likely see it recoup much of this volume. CRH is a top-five producer of readymixed concrete in the US.