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All good, says Tarmac, as profits shrink

30 Oct 23 CRH subsidiary Tarmac Trading saw its pre-tax profits shrink by more than half last year despite underlying improvements.

For the year ended 31st December 2022 Tarmac Trading Limited made a pre-tax profit of £125.9m (2021: £263.1m) on turnover up 10% at £1,994m (2021: £1,810m).

Operating profit was down 32% to £52.0m (2021: £76.4m).

“The decrease in underlying operating profit is primarily a result of the impairment reversals in the prior year results, not replicated in the current year,” finance director John Delaney explains in the annual report. “Once these are removed, underlying trading has improved in the year, as show through the improved Ebitda performance, driven by robust growth in the UK construction sector of 5.6% in 2022 (ONS data).”

Tarmac’s Ebitda (earnings before interest, taxes, depreciation and amortisation) increased to £114.4m (2021: £45.5m).

Delaney added: “Cost inflation continued to be a factor during the period, however the company was able to recover this through targeted price increases during the year. Profitability in the year also benefitted from the continuation of the company’s optimisation programme, which has delivered benefited across commercial, operations and logistics.”

Tarmac’s contracting businesses contributed £473m of the total revenue, up from £442m in 2021 while the sale of building materials generated £1,509m (2021 £1,357m). The balance came from land development activities.

Tarmac has been part of the Irish building materials group CRH since 2015. It had been previously owned by Lafarge and Anglo American.

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