Construction materials giant CRH has reported a “solid start” with revenues up 2 per cent at $6.5 billion (€6.03bn) in the first quarter.
The company, which does 75 per cent of its business in the US, said the performance was driven “by positive pricing, early-season activity and benign weather in key markets”.
Reaffirming its full-year earnings guidance of net income of $3.55 billion to $3.8 billion, CRH also announced a further $300 million share buyback. The company has repurchased $7.6 billion worth of shares since its buyback scheme commenced in May 2018. The shares rose 4.7 per cent in early trading in New York, where the company is now listed.
Chief executive Albert Manifold said: “We are pleased to report a good first-quarter performance in what is the seasonally least significant period for our business. That performance was supported by positive pricing momentum, early-season project activity, favourable weather in certain regions and the contribution from acquisitions.
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“We believe the strength of our balance sheet, together with our relentless focus on the efficient allocation of our capital, enables us to capitalise on the opportunities we see for further growth and value creation in 2024 and beyond. Given this backdrop, we are pleased to reaffirm our previous guidance for 2024,” he said.
CRH spent about $2.2 billion on acquisitions during the quarter, driven mainly by the purchase of a portfolio of cement operations in Texas. That integration is well under way and should deliver so-called run rate synergies of $60 million after three years.
The company declared a quarter dividend of 35 cent per share, up 5 per cent on an annual basis.
The “results demonstrate that the business is delivering strongly on both organic and inorganic growth opportunities”, Davy analyst Ross Harvey said in a research note. “Positive pricing and robust demand in the infrastructure and non-residential end-markets are expected to remain tailwinds for the year. The $60 million of synergies identified from the materials acquisition in Texas, meanwhile, shows that CRH is a superior operator of such assets.”
That optimism was echoed by Goodbody analyst Kenneth Rumph. “The M&A pipeline is evidently promising, further shifting capital into growth areas. Just as a weak 1Q would not have derailed guidance, a strong 1Q ought not to trigger exuberance – CRH knew much of the good news when it set guidance, which it has reaffirmed today. A 1Q beat is a bonus.”
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