Construction revival boosts Tarmac owner revenue by 2pc

TARMAC owner CRH signalled growing confidence in construction markets in both the US and Europe as it unveiled a hike in interim profits and a fattened dividend, despite having suffered earlier in the year.

Albert Manifold, chief executive, said the FTSE 100 building materials giant stood to benefit from higher infrastructure spending and a housing market recovery in the US.

He said: “On the infrastructure side, there’s committed funds both at state and federal level.”

Like-for-like revenues grew 2pc in the six months to June, reversing a 2pc slump in the first quarter, when storms forced builders to down tools. Revenues were up 1pc at €11.9bn (£10.7bn).

Analysts praised CRH’S strong earnings margin, which held steady at 9.5pc, allowing it to post pre-tax profits of €497m, up 5pc excluding the impact of disposals and acquisitions. The Dublin-based company raised its dividend 2pc to 19.6 cents per share.

Mr Manifold said: “Despite the fact we had the slow start from the weather and the spike in the oil price, which has an impact on our energy and fuel costs, we managed to keep our margins in line with last year and would expect improvements in the second half.”

A 20-year veteran of the business, Mr Manifold dismissed the suggestion CRH could spin off its US business, as mooted by analysts earlier in the year.

“It just doesn’t make any sense for about 20 different reasons,” he said, pointing to the cost benefits of the business’s massive procurement programmes and its $3.5bn (£2.7bn) takeover of Kansas-based Ash Grove Cement last year.

Analysts at Goodbody said: “We view this set of results as strong.”