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07/01/2010
Farrans Predicts Profits Drop
Farrans in Northern Ireland and Northstone NI are facing hard times as the construction industry continues to struggle.
The parent company, Irish building materials giant CRH has increased its proposed cost-savings targets as it signalled a fall in profits and warned that trading conditions would remain difficult in 2010.
The Dublin-based company, which owns both the northern businesses, said in a trading update that it was expecting pre-tax profits for 2009 to be down 54% to €750m (£674m).
However, with some €1.5bn reported to be available to carry out deals over the next 18 months - helped by a €1.24bn rights issue share sale last March - CRH is not too gloomy.
That's inspite of news that sales in the second half of 2009 also fell by 18% compared with a year earlier, although that's slightly better than the 21% first-half drop.
As CRH assesses whether plant closures in 2008 will be permanent, rather than on the back of writing down the value of billions of euros of assets acquired when the global economy was in full flight, a four-year cost-cutting programme is now expected to yield €1.65bn of savings, up €200m from what it predicted last summer.
About 40% of the current target is set to comprise permanent cost cutting, as it streamlines group administration, centralises procurement and increases fuel efficiency.
CRH sees additional infrastructure spend in Poland and Finland.
But approval for new projects is set to drop significantly in Ireland as the Government tightens its purse strings.
(BMcC/GK)
The parent company, Irish building materials giant CRH has increased its proposed cost-savings targets as it signalled a fall in profits and warned that trading conditions would remain difficult in 2010.
The Dublin-based company, which owns both the northern businesses, said in a trading update that it was expecting pre-tax profits for 2009 to be down 54% to €750m (£674m).
However, with some €1.5bn reported to be available to carry out deals over the next 18 months - helped by a €1.24bn rights issue share sale last March - CRH is not too gloomy.
That's inspite of news that sales in the second half of 2009 also fell by 18% compared with a year earlier, although that's slightly better than the 21% first-half drop.
As CRH assesses whether plant closures in 2008 will be permanent, rather than on the back of writing down the value of billions of euros of assets acquired when the global economy was in full flight, a four-year cost-cutting programme is now expected to yield €1.65bn of savings, up €200m from what it predicted last summer.
About 40% of the current target is set to comprise permanent cost cutting, as it streamlines group administration, centralises procurement and increases fuel efficiency.
CRH sees additional infrastructure spend in Poland and Finland.
But approval for new projects is set to drop significantly in Ireland as the Government tightens its purse strings.
(BMcC/GK)
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