DUBLIN, Aug 22 (Reuters) - Ireland’s CRH announced another 350 million euro ($388 million) round of share buybacks on Thursday after its earnings rose by 5% on a like-for-like basis in the first half and it said it expected further progress in the second half.
The world’s second-biggest building materials supplier by market value launched its first share buyback programme in a decade last year and had completed the repurchase of 1.35 billion euros of shares by the end of August.
Having generated almost 11 billion euros of free cash flow over the last five years - representing an industry-leading conversion rate, according to Davy Stockbrokers - CRH has become a “cash machine”, Chief Executive Albert Manifold told Reuters, as he also announced a 2% increase in its interim dividend.
CRH’s record 1.54 billion euro first-half earnings - in line with management guidance - was driven by 6% year-on-year jump in sales in its Europe Materials division, where the largest buyer of cement in the world said earlier this year it was able to increase prices in all markets for the first time in 15 years.
Revenue from its Americas Materials and Building Products divisions rose by 2 and 3%, respectively.
Manifold said he did not see a slowdown coming anytime soon in the U.S. market, where CRH is the biggest producer of asphalt for highway construction and third-biggest supplier of ready-mixed construction aggregates.
While flagging that British construction activity continued to decline amidst Brexit-related uncertainty, Manifold suggested the hit UK infrastructure and residential markets had already taken would limit the disruption of a potentially chaotic exit.
The UK market also accounts for 7% of CRH’s earnings, he added, compared with the 80% of profits generated in the United States and eastern Europe, the “backbone” of the Dublin-based group’s business where growth remains strong.
After a busy period buying and selling businesses, Manifold said his focus over the next 12 to 24 months would be on the continued integration of the streamlined group, but it would remain an opportunistic buyer.
$1 = 0.9023 euros Reporting by Padraic Halpin Editing by David Holmes