Annual pre-tax profits rose 23 per cent to €1.58bn at CRH despite the decline of the US housing market, after the group spent a record €2.1bn on acquisitions.

The Dublin-based company, which specialises in road-building products, concrete and construction materials, said its North American operations performed strongly despite the decline of the US residential construction sector and higher energy costs.

In Europe, CRH said the second half saw a “satisfactory” profit advance and a “step-up” in operating margin.

”In all, we made acquisitions totalling €2.1bn last year, with €400m from medium and smaller scale deals as well as larger ones such as APAC,” said Myles Lee, finance director.

In August, the group spent $1.3bn buying Ashland Paving and Construction from Ashland Inc, a US industrial group.

“This record €2.1bn acquisition spend will be an important factor in further driving growth across all CRH divisions,” said Liam O’Mahony, chief executive.

A 10 per cent increase in the US price of crushed rock and a 20 per cent rise in the price of asphalt helped to offset higher energy costs, he added.

The sharp fall in US residential construction, which accounts for about 10 per cent of group revenue, was softened by strong momentum in non-residential construction and infrastructure, which Mr Lee said he expected to continue into 2007.

He added that there were some indications that US housing could recover in the second half of 2007.

In Europe, Mr Lee said the group had momentum thanks to the strength of second half residential construction in Ireland.

He said CRH would continue to look for acquisitions, mostly in its major markets of north america and northern europe. But he added that the group had “dipped its toe in the water” with deals in China that he expected would be completed in the coming months.

CRH shares fell 1.6 per cent to €31.05 on Wednesday.

Despite the fall in the share price, analysts were bullish about the stock because of the better than expected results and data from the US that indicated the fall in US housebuilding may be bottoming out as surplus inventories decline.

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