Displaying items by tag: Ireland
Quinn chief not worried by Brexit
12 April 2018Ireland: Liam McCaffrey, the chief executive officer of Quinn Industrial Holdings does not expect Brexit to slow growth. He said that the most damage could arise from a prolonged recession in the UK, although he though it was unlikely, as reported bythe Irish Times newspaper. He added that the UK has a housing shortage and it relies on imports for building materials. In his estimation the worst-case scenario would be a tariffs on building materials but these, if they happened at all, are expected to be low.
The building materials producer and owner of Quinn Building Products reported that its turnover grew by 7.4% year-on-year to Euro209m in 2017. Its earnings before interest, taxation, depreciation and amortisation (EBTIDA) increased by 31% to Euro23.9m.
“Despite the significant macro-economic challenges posed by Brexit, we continue to invest, grow sales, innovate and drive margin growth. Encouragingly, volume growth trends from 2017 are continuing year to date in 2018 and, at this point, we are firmly on track to deliver our fourth successive year of strong earnings growth,” said McCaffrey.
Institutional Shareholder Services recommends investors vote against executive pay rise at CRH
06 April 2018Ireland: The Institutional Shareholder Services (ISS) recommends that investors vote against a proposed Euro10m pay rise for executives at CRH. The building materials company is set to increase executive pay at its annual general meeting in late April 2018, according to the Irish Times newspaper. ISS recommends that shareholders vote against a remuneration report for several reasons including CRH's failure to set out targets for its managers and the group's proposal to give its finance director a 10% rise.
In 2017, CRH paid its chief executive officer Albert Manifold a Euro3.12m bonus, Euro2.15m salary and pension and Euro3.4m in share options. His pay was 13% less than in 2016. Finance director Senan Murphy's salary and pension was Euro0.91m and he received a Euro1m bonus. Former group transformation director Maeve Carton, who left the role in August 2017, was paid Euro2.67m.
CRH’s remuneration report says the annual bonus payments are based on a combination of financial targets and ‘personal strategic goals.’ It plans to reveal more details in 2019 once it is no longer commercially sensitive. It defended Murphy's proposed pay rise as he was paid below the market rate when he became financial director in 2016.
Ireland: CRH has appointed Richard Boucher as a non-executive director.
Boucher, aged 59 years and an Irish citizen, has experience in all aspects of financial services and was the chief executive of Bank of Ireland Group between February 2009 and October 2017. He also held a number of senior management roles within Bank of Ireland, Royal Bank of Scotland and Ulster Bank. He is a past President of the Institute of Banking in Ireland and of the Irish Banking Federation.
He is a consultant for Fairfax Financial Group and acts as its nominee on the Board of Atlas Mara, a company with investments in banks in Africa. He is also a non-executive Director of Eurobank Ergasias, a bank based in Athens, Greece that has operations in Greece and several other European countries. He holds a Bachelor of Arts (Economics) from Trinity College, Dublin and is a Fellow of the Institute of Banking in Ireland.
Ireland: Poor sales in the UK and Switzerland have reduced the sales of CRH’s Europe Heavyside division, which includes its European cement operations. The division’s sales revenue fell slightly to Euro6.90bn in 2017 from Euro6.95bn in 2016. Despite this the division reported market recovery in Ireland, France, Poland and Finland. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 7% year-on-year to Euro839m from Euro781m.
Overall, the group’s sales for its continuing operations rose by 1.7% to Euro25.2bn from Euro24.8bn. Its EBITDA rose by 5.6% to Euro3.15bn from Euro2.98bn.
“2017 was a year of continued profit growth for CRH. We benefited from increases in underlying demand in the Americas and positive momentum in Europe, and with focus on performance improvement and operational delivery, margins and returns were ahead of last year in our American and European Divisions,” said chief executive officer (CEO) Albert Manifold.
The group’s Americas Materials division’s sales rose by 5% to Euro7.97bn from Euro7.60bn and earnings rose similarly. The division said that its cement business in North America saw total volumes rise by 3% ahead with ‘marginal’ price increases, supported by stronger demand in the US. It added that the division has continued to optimise its terminal network and market penetration by repositioning more volumes to the US from Canada, where competitive market conditions remain, especially in Quebec.
Breedon Aggregates in talks to buy Lagan Cement
19 February 2018Ireland/UK: Breedon Aggregates is reportedly in talks to buy a part or all of Ireland’s Lagan Group, according to the Sunday Times newspaper. Breedon Aggregates and Lagan’s subsidiary Whitemountain operate an asphalt joint venture at present. However, Lagan Group did not respond to a request for comment on the talks.
Breedon Aggregates purchased Hope Construction Materials in 2016, which included the Hope cement plant. The acquisition boosted Breedon’s financial results in 2017 giving it a revenue of Euro523m and it described the year as the, “…most eventful year in the group’s history.”
Lagan Cement operates a 0.7Mt/yr plant in Kinnegad in Ireland. In late 2012 it proposed a joint venture with Quinn Building Products. However, the deal fell through in early 2013 following the receipt of a package containing a bullet which was sent in the post to the Lagan's chief executive, Kevin Lagan. The bullet, which was sent to Lagan at his Belfast office, was accompanied by a message stating, "Quinn ... is this what you want".
Ernst Bärtschi retires from board of CRH
03 January 2018Ireland: Ernst Bärtschi has retired from the board of CRH. He was appointed to the board of directors in 2011. A Swiss national he was previously the chief executive officer of Sika and had worked for Schindler Group.
Ireland: The Environmental Protection Agency (EPA) has started legal action against Irish Cement’s for alleged breaches of its operating licence at its Limerick plant. A court summons is related to dust ‘blowouts’ from the plant, according to the Limerick Leader newspaper. The case is scheduled to come before the Limerick District Court in early March 2018. The EPA investigated dust emissions from the plant in April 2017.
CRH reports steady improvement in third quarter
21 November 2017Ireland: CRH’s like-for-like group sales for the third quarter of 2017 rose by 3%, boosted by continued underlying growth in the Americas, although some operations were hit by adverse weather. CRH, which is in the final stages of buying US-based Ash Grove Cement for Euro2.98bn, added that it continues to expect another year of progress in 2017, with earnings before interest, taxes, depreciation and amortisation (EBITDA) of more than Euro3.2bn. This is 2.2% higher than the Euro3.13bn EBITDA it saw during 2016.
Group sales for the nine months as a whole were Euro20.7bn, an increase of 2% compared to the same period if 2016. EBITDA for the nine months was also 2% higher at Euro2.43bn.
PPC said to be on shopping list for CRH
13 October 2017South Africa: Ireland’s CRH is considering making a bid for PPC according to unnamed sources quoted by Bloomberg. However, no final decision has been made and neither CRH nor PPC have commented on the matter. Following an offer made by Fairfax Financial Holdings in September 2017, PPC said that it had received two other offers. Nigeria’s Dangote Cement publicly admitted that it was in talks with PPC but it later withdrew from the bidding process.
CRH enlarges its North American cement presence
27 September 2017The last week marked a step change to the US industry with the news that Ireland’s CRH has agreed to buy Ash Grove Cement. The latter is the largest remaining cement producer still owned by an American company. Its history dates back 135 years to its founding in 1882, with links to the Sunderland family for over a century. Following the acquisition, each of the top five cement producing firms in the US will be operated by multinational corporations based in foreign countries.
Although this scenario is not new to many other countries around the world, it is rare for a nation with a cement industry of this scale. The US is the third biggest cement producer worldwide. Out of the top ten cement producing nations Global Cement Magazine identified in its Top 100 Report 2017 feature in December 2016 only Egypt doesn’t have a local company to match the multinationals. China has China National Building Material (CNBM), for example and India has UltraTech cement and so on and so forth.
The actual sale covers Ash Grove Cement’s eight cement plants and 23 cement terminals, as well as its ready mix concrete and aggregate businesses, for US$3.5bn. Altogether its cement plants have a production capacity of 9.5Mt/yr and this really puts into contrast the Cementir Italia deal last week. HeidelbergCement has agreed to buy that company for around Euro57/t. CRH is buying Ash Grove Cement for US$368/t. That’s more that five times as much!
To be fair they are very different markets, with Italy’s cement sector consolidating near the bottom of a business cycle and the US growing with some promise. For comparison with other recent US acquisitions, CRH is offering to pay about the same as Summit Materials did to Lafarge for a cement plant and seven terminals in mid-2015. Other than that a few of the more recent transactions have been between US$200 – 300/t. The gradual price inflation for cement production capacity indicates that there is confidence in the US cement market.
In terms of CRH’s enhanced presence in North America following the completion of the deal, it currently operates two cement plants in the US: the American Cement Sumterville plant in Florida, a joint venture with Elementia, and the Trident plant in Montana. The CRH US division also runs five terminals in the Midwest and Northeast. This compliments Ash Grove Cement’s presence in the West, Midwest and South. Throw in CRH’s Canadian cement plants in Ontario and Quebec and CRH has the makings of a seriously strong cement business in North America. The only obvious impediment could be the close proximity of the CRH Trident plant and the Ash Grove Cement Montana City plant. Both are in Montana within 115km of each other and they are the only integrated plants in the state. A Federal Trade Commission arranged divestment in this location seems likely.
Ash Grove Cement’s chairman Charlie Sunderland, described CRH as his company’s biggest customer when the acquisition was announced. Buying Ash Grove Cement fills in one more piece in CRH’s construction materials puzzle in North America. Its American divisions have generated more than half of its revenue since at least 2014 dominating asphalt, aggregate and ready mix concrete markets. Yet it has lacked a cement market presence to match this. This changes when the deal with Ash Grove Cement completes.