Results were better than expected for the building materials company as disruption in business caused by coronavirus saw falling sales and profits
CRH continues with dividend despite profit dips
- The performance was described as “robust” with sales down by 3% and a 70 basis points rise in margins to 13%
- Adjusted earnings were lower at $1.59 bn and the group highlighted strong cash generation, which has helped reduce debt and enabled the group to announce an unchanged dividend of 22 cents
- Recommendation: A medium risk ‘Buy’, but given the current uncertainty we would only suggest drip feeding
On a quieter morning for corporate news, buildings material group CRH interim results look to have beaten estimates despite remaining cautious in their outlook. The share price, which has recovered back to pre-crisis levels on hopes that governments around the world will push for more infrastructure spend, was marked higher at the open.
The performance was described as “robust” with sales down by 3% and a 70 basis points rise in margins to 13%. Adjusted earnings were lower at $1.59 billion. The group highlighted strong cash generation which has helped reduce debt and enabled the group to announce an unchanged dividend of 22 cents.
The coronavirus will continue to cloud future forecasts with management expecting sales to be slightly lower over the third quarter. The focus will remain on improving profitability, margins and cash.
Investors in the group will be hoping that countries, especially in the important North America region, will look to build as one way of kick starting the economy as we negotiate a way out of the crisis.
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