Building materials giant CRH could have a war chest of more than €20 billion to spend on buying up rivals in coming years, the Irish-based, New York-listed company said on Thursday.
The group reported an 8 per cent rise in profit after tax to $1.3 billion (€1.18 billion) for the three months to the end of June despite a small fall in revenues to $9.7 billion, beating market expectations. Profit margins improved by just over one percentage point to 13.6 per cent, the company said.
For the first half of the year, net income is now 20 per cent ahead of the 2023 figure at $1.4 billion on revenues that were flat at $16.2 billion, the company said.
Speaking to analysts after CRH published the results, Jim Mintern, chief financial officer, said the group calculated it would have up to $24 billion (€22 billion) to spend on acquisitions in coming years.
CRH estimates that it will have up to $35 billion in total over the next five years to grow the business through acquisition and investing in existing operations, Mr Mintern noted.
Albert Manifold, chief executive, told the conference that CRH had a “strong pipeline” of acquisition opportunities.
CRH recently bought 57 per cent of Australian building materials supplier, Ardbri, in a deal valuing that business at $1.3 billion.
On the basis of adjusted earnings before interest, tax, depreciation and amortisation (Ebitda), the company improved its performance by 12 per cent to $2.3 billion in the second quarter.
CRH boosted its predicted net income for the year to between $3.7 billion and $3.85 billion from earlier guidance of $3.55 billion to $3.8 billion.
Mr Manifold cautioned that this assumed “normal seasonal weather patterns and no major dislocations in the macroeconomic environment”.
On revenue, the company said: “Positive pricing and contributions from acquisitions partly offset the impact of lower activity levels due to unfavourable weather in certain regions and divestitures, primarily phases one and two of the European Lime operations.”
“We are pleased to report another period of further profit growth and margin expansion for CRH,” said Mr Manifold.
“The execution of our differentiated solutions strategy continues to deliver robust financial performance, while the strength of our balance sheet and relentless focus on the disciplined allocation of our capital enables us to capitalise on the opportunities we see for further growth and value creation.”
CRH, which moved its main stock listing to the New York Stock Exchange in September last year, is no longer listed in Dublin. In London, where the shares also trade, CRH was up 2.54 per cent in early trading on the back of the results.
In a market update, CRH said it had completed eight acquisitions in the three months to the end of June at a cost of $400 million. Six of those were in the US market, mainly in the materials solutions business.
That brings to 16 the number of businesses acquired by CRH in the first half of the year at a total cost of $2.6 billion. It marks a significant increase on the same period in 2023 when it spent just $200 million on acquisitions as it readied for its transition to New York.
On the disposal side, CRH sold businesses worth $400 million in the second quarter and $1.1 billion in the first half of the year, including the first two phases of its planned exit from the European lime sector.
The company bought back 3.8 million shares from investors between May and August, bringing the total value of share repurchases to since May 2018 to $7.9 billion.
It has agreed the repurchase of stock up to $300 million between now and November 6th.
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