CRH plans to buy back a further $300 million (€282 million) of its own shares by the end of March, which will bring the total amount returned to investors under a stock repurchase programme since 2018 to $4.4 billion (€4.14 billion).
The total equates to almost over 16 per cent of the Dublin-based building materials giant’s current €27.1 billion (€25.5 billion) market value.
Goodbody Stockbrokers analysts said that CRH has returned $2.1 billion (€1.97 billion) to shareholders this year, comprised of $1.2 billion (€1.13 billion) through share buybacks and the remainder in dividends. Shares in CRH rose almost 2 per cent to €37 in early trading in Dublin.
CRH said in a statement on Monday that the continuation of the buyback plan follows on from its repurchase of about $300 million shares between mid-September and last Friday at an average discount of 1.2 per cent of the stock’s volume-weighted average price over the period.
Parties’ general election manifestos struggle to make the figures add up
On his return to Web Summit, the often outspoken chief executive Paddy Cosgrave is now an epitome of caution
Surviving a shake-up: is restructuring ever good for staff?
The Irish Times Business Person of the Month: Dalton Philips, Greencore
The bank has hired Bank of America to carry out the share repurchases over the coming months, having used UBS for the last batch.
“Any decision in relation to any future buyback programmes will be based on an ongoing assessment of the capital needs of the business and general market conditions,” it said.
CRH shares have declined by 22 per cent so far this year amid concerns about the global economy.
However, the group, led by chief executive Albert Manifold, said last month that it is sticking to its $5.5 billion (€5.18 billion) full-year earnings forecast, even as its Europe materials division has weakened in recent months as it grapples with higher energy prices and euro weakness against the dollar.
The earnings before interest, tax, depreciation and amortisation (ebitda) forecast represents a 10 per cent improvement on the outcome for last year for the building materials group. Group ebitda for the first nine months rose by 14 per cent to $4.2 billion (€3.95 billion).
CRH sees its net debt burden dipping by the end of 2022 to be in line with its full-year ebitda from a ratio of 1.2 times as of last December. Group chief financial officer Jim Mintern has said that the group will have the “the strongest balance sheet on our history” at that stage.
“Its balance sheet provides it with significant flexibility into 2023,” said Ross Harvey, an analyst with Davy, in a note to clients on Monday.
CRH has invested $3 billion (€2.82 billion) on 21 acquisitions this year as of the middle of last month, the largest being the $1.9 billion purchase of US residential fencing and railing company Barrette Outdoor Living in July.
The largest divestment so far this year was the sale of its Building Envelope business for $3.5 billion (€3.29 billion) in cash. The Dublin-based company had raised a total of $4 billion (€3.76 billion) from sales of unwanted assets to mid-November.
