Building materials supplier CRH saw a rise in its share price on Friday as it reported strong profits growth during what is typically a slow period for the company. With its share price reaching £66.96 per share, CRH’s stock was trading 3.9% higher on the London Stock Exchange at the end of the week. Revenues for the Dublin-based business increased by 2% in the March quarter, reaching $6.5 billion. This growth led to a 15% increase in adjusted earnings before interest, tax, depreciation, and amortization (EBITDA), which reached $445 million.
Factors such as early-season project activity, favorable weather in certain North American regions, positive pricing momentum, and contributions from acquisitions all contributed to the boost in sales and profits for CRH. The company’s adjusted EBITDA margin also improved by 60 basis points year on year, reaching 6.8%. Despite lower volumes in Europe, CRH managed to offset this with other positive factors contributing to its growth. The company recently transitioned to paying quarterly dividends and announced a dividend of 35 US cents per share for the January to March period, representing an annualized increase of 5%.
In addition to the dividend announcement, CRH also revealed plans to repurchase $300 million worth of its shares by August 7, on top of the $600 million already repurchased this year. Over the past six years, the company has conducted share buybacks totaling $7.6 billion. CRH also affirmed its guidance for adjusted EBITDA in 2024, expecting to deliver between $6.55 billion and $6.85 billion. The company anticipates a favorable market backdrop and continued positive pricing momentum in the construction industry, particularly in North America where infrastructure activity is expected to drive growth.
CRH chief executive Albert Manifold expressed satisfaction with the company’s performance in the first quarter, which is typically a less significant period for the business. He highlighted the strength of the company’s balance sheet and its focus on efficient capital allocation as key factors enabling further growth and value creation in 2024 and beyond. Analyst Adam Vettese of eToro commented on the positive outlook for CRH, noting that despite concerns about rising building materials costs, the company’s revenues increased in a seasonally slow quarter, bringing optimism for future strong performance. Share buybacks and a higher dividend payout are expected to further boost investor confidence in CRH.
Overall, CRH’s solid profits growth during a typically quiet period, coupled with increased dividends and share buybacks, have driven positive investor sentiment and share price performance for the company. With expectations for continued strong performance in the construction industry, CRH’s guidance for 2024 remains optimistic, supported by favorable market conditions and strategic investments in key markets. The company’s focus on efficient capital allocation and value creation, along with its emphasis on growth opportunities, position CRH for further success in the coming years.
