CRH will consider exiting Dublin’s stock market as part of US listing switch

Irish company says President Biden’s sweeping infrastructure subsidies will super-charge construction growth in America

CRH chief executive Albert Manifold. Photo: Gary O'Neill

Sarah Collins and Caoimhe Gordon

March 02 2023 02:00 PM

Building materials giant CRH has not ruled out leaving the Irish stock exchange altogether as it considers moving its main listing from London to New York to capitalise on booming US demand and President Joe Biden’s sweeping infrastructure subsidies.

The Irish company, which switched its primary listing from Dublin to London more than a decade ago, will remain incorporated, tax resident and headquartered in Ireland, and will spend the next six weeks convincing shareholders that leaving the UK stock market for the US makes business sense.

The move is a blow for post-Brexit Britain, with CRH one of the FTSE100’s largest companies. It is unclear yet what it will mean for the group’s secondary Irish listing.

“When we get the feedback from our shareholders in that regard, particularly with regard to indeed the UK and indeed [the] Ireland Euronext [listing], at that stage we will be able to update you, at the end of April,” said group finance director Jim Mintern. “But for the next six weeks we need to engage with our shareholders.”

After announcing record 2022 sales, profits, margins and cash reserves today, chief executive Albert Manifold told reporters the “size and strength” of CRH’s American business – which makes up 75pc of its earnings, up from 50pc a decade ago – was behind the move.

A trio of multi-trillion dollar subsidy plans by the US administration – the Infrastructure Investment and Jobs Act, Inflation Reduction Act and Chips Act, some of which the EU is trying to emulate – are part and parcel of CRH’s transatlantic shift.

“We would have higher levels of growth if we were to list our business in America,” Mr Manifold said.

“It’s clear that there will be significantly stronger support for construction in North America than there is in Europe. That’s because of the level and extent of federal funding. That alone is going to super-charge construction growth in infrastructure over the next decade.”

Europe is still “absolutely critical” for CRH, particularly central and eastern Europe, which is the “jewel in the crown” of the business, despite the ongoing war in Ukraine.

CRH has been active in Ukraine since 1999 and employs more than 800 people in the country. It reopened its two facilities there, in the western half of the country, last autumn.

“We remain committed to Ukraine. We have a fine business there. Our people are all safe. Our facilities remain undamaged. I think that it should be an area for CRH in the years to come.”

But costs in Europe have spiralled higher than those in its American business, with price hikes last year offsetting lower activity. Earnings in Europe were down 4pc on 2021, despite sales jumping 11pc.

Further price increases are likely this year as CRH attempts to “fully” recover cost hikes. “We still have a ways to do, in particular parts of the world, particularly here in Europe, because there were some very, very significant cost increases last year which we have not fully recovered yet.”

Overall, he said, its full-year results show the firm is in “fairly rude, robust shape”.

Earnings before interest, taxes, depreciation, and amortisation (Ebitda) were $5.6bn (€5.3bn), up 13pc on 2021. Its Ebitda margin was up 10 basis points to 17.2pc, despite cost increases.

Group sales rose 12pc across the year to $32.7bn.

Profit after tax rose 10pc to $2.7bn, with CRH announcing a full-year dividend of $1.27, up 5pc from 2021, and a new $3bn share buyback.