In a note to clients, the broker talked of the "provisionality" of, and the "downside risk" to, its forecasts. CSFB has taken the axe to its profit forecasts for Kingfisher for the second time in five weeks. And it is warning that B&Q might have to launch a massive sale to clear excess stocks, a move that would depress profits yet further. After a 5 per cent cut after the company's disappointing trading update in May, CSFB lopped a further 8 per cent from its Kingfisher profit forecast yesterday, and warned of more to come. Trading has taken another turn for the worse at B&Q, says the broker to its parent company, Kingfisher. CRH was formed in 1970 through the merger of two Irish companies, Cement and Roadstone. The newly formed group was the sole producer of cement in Ireland and the main producer of concrete products and asphalt. Expanding steadily by acquisition, it has grown from sales of €26m (£18m) in 1970 to €12.8bn last year. After seeing profits break through the €1bn barrier last year, CRH issued yet another convincing trading update yesterday.
Analysts noted approvingly that despite its focus on buying its way to growth, half its performance is still down to organic improvements.But CRH's various divisions showed a mixed performance. While the US is firing on all cylinders, the European operations remain sluggish. Through May and June its US operations performed strongly, but there are few signs of a pick-up in demand in the larger eurozone economies.The company may also be at risk from the recent spike in oil prices, which will drive up costs. Other danger factors include a slowing in the US economy and a marked increase in asbestos claims, which continue to grow in North America.Another negative is lower spending on acquisitions than in recent years - CRH spent a mere €231m in the first half, 35 per cent in Europe and 65 per cent in the Americas. That compares with an average annual spend of €1.2bn in years gone by. Many purchases have been small family outfits, which steadily expand CRH's purchasing and distribution network. Yet there is little doubt that CRH will keep pushing ahead as an acquisition machine.
Its wide spread of businesses - from brick making to ventilation products - ensures it is relatively well protected from a single market's ups and downs.Trading at about seven times 2005 earnings, the stock compares favourably with some of its rivals, and remains a buy.. It made its first moves out of Ireland by buying businesses 25 years ago and has not stopped acquiring since, scooping up scores of small and not-so-small rivals in the building products sector. That gives it a presence in 24 countries spanning Europe and the Americas. Quite so.j.warner independent.co.uk. The acquisitive Irish building materials group CRH continues to push ahead with its growth strategy, which is working as well as it ever has. These included the right to terminate a contract at no more than 28 days notice and the requirement to maintain a myriad of different payment methods.Now that Professor Littlechild has been re-incarnated as a consultant to the industry, he's belated recognised that, far from benefiting the customer, much of this regulatory spaghetti has the effect of strangling new entrants at birth, resulting in prices being higher than they ought to be.