Even before stepping down as chief executive of CRH at the end of this year, Liam O’Mahoney can lay claim to a record that none of his building materials rivals can: of steering his company to its fifteenth consecutive year of growth in profit and earnings.

On the basis of yesterday’s year-end trading update, Mr O’Mahoney appears confident of extending that winning streak by another year, too. That aplomb is perhaps surprising given that CRH, Ireland’s biggest industrial company, draws half its sales from America.

However, although stating that it expects its US residential operations – which account for 30 per cent of its sales from that territory – to face another testing year in 2008, CRH repeated its view that its nonresidential and infrastructure divisions should continue to perform well. Indeed, it assured investors that it has seen no sign of a slowdown in US nonresidential activity.

Elsewhere, the company predicts moderate progress in the eurozone, but continued strength in Central and Eastern Europe – largely Poland, the Czech Republic and Ukraine - from which it now draws 14 per cent of profits. On current estimates, CRH is forecast to achieve a 5 per cent rise in pretax profits this year, a significant slowdown from the 19 per cent secured in 2007, but commendable all the same.

If there is reason to believe that CRH can weather tougher times better than most it lies in the group’s prowess as an acquisition machine – through which it enhances earnings by buying at lower multiples than its own, securing economies of scale and stripping out central costs. That last year’s €2.2 billion spend on bolt-on deals was a record came as no mean feat given that 2006 contained the $1.3 billion takeover of Kentucky’s Apac, the biggest in its history. CRH is keen to match that sum this year, and is likely to be helped by its strong balance sheet – it has firepower of up to €7 billion – and tighter credit markets, which has reduced the competition of private equity buyers.

Financial strength also lay behind yesterday’s other big disclosure: that the company is to repurchase up to 5 per cent of its equity in its first share buyback programme. Given a near40 per cent slide in the shares since July – which, at nine times current-year earnings, are trading at a discount to its peers – that support is welcome, and helped them to bounce nearly 4 per cent. However, concern that US nonresidential spending cannot sustain its strength for ever means that other buyers of the shares are likely to be harder to find, making the stock, at €24.85, no more than a hold.

Autonomy

To the list of likely winners from the credit crunch, add Autonomy. That might be the inference from yesterday’s unveiling by the Cambridge-based software house of its biggest contract win: a $70 million four-year agreement to supply an unnamed bank with its archiving technology. That deal, seven times bigger than any previous win, appears a direct result of last year’s revision of America’s Federal Rules of Civil Procedure. This requires any business that could be involved in litigation in a federal court to keep electronic records, such as e-mails and instant messages, and be able to retrieve them within 99 days. That capability has become especially urgent after the US sub-prime meltdown, with banks overhauling their information management systems before an expected wave of class-action lawsuits from aggrieved borrowers.

As such, Autonomy, the biggest player in legal and compliance software, is an obvious beneficiary. The deal also provides vindication of last year’s $375 million purchase of Zantaz, which strengthened that position. The bigger point is that there are some areas of technology spending that banks are unlikely to freeze or cut back. That provides comfort after a sell-off in software stocks with exposure to financial services. Although Autonomy draws only 5 per cent of sales from that sector, it has not been immune, its shares having fallen 16 per cent from November’s high. Even so, at 906p, or 32 times current-year earnings, they are not obviously cheap. However, with earnings forecast to grow at least 40 per cent this year and 20 per cent next, and more bank deals possible, it is worth holding on.

Majestic Wine

Tim How, chief executive of Majestic Wine, has more reason than most AIM-listed retailers to keep an eye on the foreign exchange markets. With his wine warehouse chain making about half of its purchases in nonsterling currencies, largely the euro, the latter’s 8 per cent gain against sterling last year – it hit a new high yesterday – is an additional pressure he could do without.

As yesterday’s Christmas trading update showed, Majestic is starting to feel the pinch. Like-for-like sales in the nine weeks to December 31 were up a modest 1.2 per cent, a slowdown from the 2.4 per cent reported at the half-year stage. A 4.1 per cent rise in December was not enough to make up for a poor November, when increased discounting by supermarkets – including Waitrose, which launched its first wine promotion – took its toll. Sales at its Calais store, where the effect is most pronounced, were down 6 per cent.

Majestic’s strengths remain. It has an excellent long-term track record, cash on its balance sheet – it has been buying back shares – and considerable scope to expand beyond its current 141 stores. However, even after a 35 per cent slide in the shares from last year’s peak to 270½p, they trade at 15 times current-year forecasts, against its sector’s 12 times. Given weaker consumer spending, strongly rising wine prices after poor harvests in France and Australasia, and the risk of above-inflation increases in wine duty in this year’s Budget, the shares are best avoided.

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