CRH shares soar as share buybacks increased to $3 billion

March 2, 202310:03 AM UTCUpdated ago

Summary
Companies

CRH core earnings up 13% to $5.6 billion
CEO says U.S. a "one-way" bet as it moves listing
Bucks trend of falling margins elsewhere in the sector

DUBLIN, March 2 (Reuters) - Shares in CRH jumped 10% on Thursday after the building materials giant announced plans to buy back shares worth $3 billion, a more than three-fold increase on last year on the back of record sales and profits for 2022.

Dublin-based CRH also recommended moving its primary listing to the United States where it is the largest building materials supplier and made about 75% of its $5.6 billion in core earnings last year, which were up 13% and ahead of expectations.

CRH Chief Executive Albert Manifold described the U.S. as a "one-way bet", with already robust demand boosted by government funding such as the $430 billion U.S. Inflation Reduction Act and a rise in the onshoring of manufacturing activity due to geopolitical changes.

"The U.S. really is in good shape and we're facing I suspect five to 10 years of really strong growth," Manifold told Reuters in a telephone interview.

"We are now at an historic step-off point in the United States. We had the confluence of events coming together, three very, very significant federally funded programmes, the likes of which the United States has never seen before."

In the nearer term, CRH said it expected resilient demand and increased pricing in 2023.

Its London-listed shares (CRH.L) were 10.9% higher at 4,391 pence at 0905 GMT, making it one of the top 5 gainers on the blue-chip FTSE 100 (.FTSE) index.

Manifold also said Europe "held up very, very well" last year despite the difficult inflationary environment.

Those cost pressures did not stop CRH from bucking a trend of falling margins across the sector by instead growing its EBITDA margin for the 10th successive year, up 10 basis points to 17.2%.

The leap in share buybacks from the $1.2 billion worth of stock it purchased last year reflected the fact that its balance sheet has never been stronger, with net debt at 0.9 times core earnings, Chief Financial Officer Jim Mintern said.

CRH also increased dividends by 5% to $1.27.

(This story has been refiled to fix the headline)

Reporting by Padraic Halpin; editing by Jason Neely, Robert Birsel