CRH shares fall on sales slip, despite €1bn buyback plan
CRH is planning to buy back up to €1bn of its own shares over the next 12 months, with CEO Albert Manifold citing the building materials group's "strong balance sheet and cash flow generation" for the decision to return cash to shareholders.
The proposed buyback was announced ahead of the company's annual general meeting in Dublin this morning.
Mr Manifold said that CRH "remains committed" to its "progressive dividend policy" and investment grade rating.
"This repurchase programme demonstrates management's confidence in the outlook for our business, our continued strong cash generation and our flexibility to deliver value to shareholders," he said.
Ireland's biggest company said that its like-for-like sales during the first quarter of 2018 slipped 2pc. It said it had been hit by prolonged winter conditions, and by the timing of Easter, which fell in the second quarter of this year compared to the first in 2017.
"In the Americas, unfavourable weather conditions impacted a number of key regions and while the economic and business environment remained positive, like-for-like sales were down 3pc on 2017," CRH noted in a trading update.
"Competitive market conditions prevailed in the Philippines with like-for-like sales 5pc behind the first quarter of 2017."
Its like-for-like sales were 2pc lower in Europe during the first quarter.
Notwithstanding the declines, CRH pointed out that the first half is the "less significant" part of its year, and that earnings before interest, tax, depreciation and amortisation (ebitda) in the period is still expected to be in line with that generated in the first half of 2017 on a like-for-like basis.
During the first half of 2017, CRH generated ebitda of €1.17bn on sales of €13bn. For the full 2017 year, CRH generated record ebitda of €3.3bn on revenue of €27.6bn.
In Europe, CRH's first-half ebitda this year is expected to be "slightly ahead" of the like-for-like figure generated in the first six months of 2017. In America, like-for-like ebitda should be in line with that in the first half of last year. Ebitda in Asia for the period is likely to decline.
CRH shares fell initially before strong gains yesterday afternoon.