CRH jumps on plan to return €1bn to investors
CRH shares jumped by over 2% as the building materials company said it planned to return up to €1bn of excess cash to shareholders and recoup another €1.5bn to €2bn from the sale of non-core assets. The Dublin-headquartered group said, subject to shareholder approval at its AGM today, it would carry out the €1bn share buyback programme over the next near.
Chief executive Albert Manifold said the group will continue to invest in growth opportunities, but recent strong cashflow generation and a strong balance sheet allows for this move.
“We remain committed to our progressive dividend policy. This repurchase programme demonstrates management’s confidence in the outlook for the business, our continued strong cash generation and our flexibility to deliver value to shareholders,” he said.
The news helped boost CRH’s share price by over 2% yesterday and cushioned the temporary blow of a 2% fall in like-for-like sales in the first quarter, as detailed by the group in its latest trading update.
Sales fell due to the timing of the Easter holidays, this year, and prolonged severe winter weather conditions. CRH still expects group earnings for its seasonally less significant first half to be in line with last year and for second-half earnings to be up year-on-year.
CRH also said that it has spent around €150m to date this year, on six bolt-on acquisitions. Its $3.5bn takeover of US cement company Ash Grove is also due to complete very soon.
Last month, CRH said it had immediate room to spend about €650m to €700m per year on acquisitions, and said that it envisages no change to its acquisition-led growth strategy for decades to come.
