Fears that CRH's initial announcement on being named in asbestos litigation would prompt a large number of additional claims have not been realised, with only eight new claimants notified in the last five months.
The firm said a further eight claims had been disposed of since September for $5,800 (€5,327), or an average $700 per claim, leaving 251 claimants outstanding at the end of February. "The experience since September strengthens our view that the claims outcome will not have a material impact," CRH said yesterday.
Shares in the building materials group jumped by more than 7 per cent yesterday to €12.20 after it reported better-than-expected results for 2002 despite difficult trading conditions. Pre-tax profits rose by 7 per cent to €856 million while sales were up 3 per cent to €10.8 billion despite a weaker dollar trimming €28 million off pre-tax profits.
The firm said it would pay a final dividend of 17.97 cents per share, bringing the total dividend to 25.40 cents, up 10 per cent.
CRH's various operations around the globe turned in a mixed performance. In the Republic, operating profits slipped 2 per cent to €131 million as construction demand fell 4 per cent. But the firm believes current Eurconstruct forecasts of a 7 per cent drop in demand this year are too pessimistic and that the first half in Ireland should be strong though followed by a slower second half.
Its British business also saw operating profits decline, by 10 per cent to €56 million, due mainly to higher natural gas prices and weaker activity in Northern Ireland. But its European products and distribution business performed strongly, with operating profits up 65 per cent to €107 million, as the impact of acquisitions made in 2001 and 2002 fed through.
Its European materials business saw operating profits fall by 1 per cent to €126 million, mainly due to €7 million of rationalisation costs incurred in Poland.
In the US, operating profits in the materials business were down 3 per cent to €336 million as the weaker dollar and a slow second half took their toll.
But the product and distribution business in the US had a "robust performance", CRH said, helped by recent acquisitions. Profits in this division rose 2 per cent to €292 million. CRH also said yesterday it would seek permission at its a.g.m. on May 7th to buy up to 10 per cent of its ordinary shares although it does not have any "current intention" of exercising this authority.
Analysts believe that, given its continued focus on acquisitions, the chances of a share buyback are low. CRH spent nearly €1 billion on acquisitions last year and remains on the look-out for firms offering good value and the right strategic fit.
CRH said it had a net pension liability of €130 million at the end of the year against a surplus of €119 million a year earlier.
