Shares in building materials giant CRH rose on Wednesday, breaching the €30 mark for the first time in three months, as the company kick-started its first share buy-back programme in a decade.
The company, led by chief executive Albert Manifold, confirmed last week it intended to repurchase ordinary shares of up to €1 billion over the next 12 months.
As an initial stage of this wider programme, CRH on Wednesday announced it has entered into arrangements with UBS to repurchase ordinary shares on its behalf for a maximum consideration of €350 million. This first phase will end no later than August 22nd.
Shares in the largest company on the Iseq index rose as much as 3.7 per cent on Wednesday to €30.40 before coming back slightly to finish 2.41 per cent ahead on the session at €30.005.
Stock dropped
The market value of CRH has jumped as much as 7.5 per cent since Mr Manifold signalled in an interview with The Irish Times last month that a share buy-back scheme was under consideration. Before then, the stock had dropped by almost one-fifth from all-time highs hit in May last year, as investors took a more circumspect view of US president Donald Trump's infrastructure spending plans and the value of the dollar dropped against the euro, denting group profits.
Under the terms of the buy-back programme, ordinary shares will be repurchased on the London Stock Exchange, according to CRH.
The group has instructed Swiss bank UBS to conduct the first phase on its behalf and to make trading decisions independently of CRH in accordance with certain pre-set parameters.
Treasury
The repurchased ordinary shares will be held in treasury pending their cancellation or reissue “in due course”.
In connection with the buy-back programme and the commencement of the first phase, the board has approved the suspension of the scrip dividend, which allows investors to receive new shares in CRH instead of a cash dividend. The final dividend on 2017 earnings, to be paid this week, will not be affected by the suspension.
