DUBLIN (Reuters) – Ireland’s CRH announced an additional 350 million euros in share buybacks and forecast growth for the year after the building materials group reported a 7 percent rise in first-quarter sales on Wednesday.
The world’s second-biggest building materials supplier by market capitalisation launched its first share buyback programme in a decade last year and had completed the repurchase of 1 billion euros of shares by the end of March.
On Wednesday citing its strong balance sheet and cash generation it said it planned to buy back a further 350 million euros of shares before it reports its half-year results on Aug 22.
The Dublin-based company expects mid-single digit percentage growth in core earnings in the first half of the year helped by acquisitions and growth in the second half when it traditionally makes two-thirds of its profit.
The strong first quarter was driven by a 12 percent year-on-year increase in sales in its Europe Materials division, while sales in its Americas Materials and Building Products divisions rose by 4 and 5 percent, respectively.
A strategic review of CRH’s European distribution business is ongoing, it said, reiterating that it would consider all options to maximise shareholder value.
Reuters reported on April 12 that CRH had hired Bank of America to launch the sale of the unit in a deal valuing the unit at about 2 billion euros (£1.73 billion) including debt.
The sale process is expected to begin next month and has already drawn interest from buyout funds including Advent, Lone Star and CVC, sources familiar with the matter said.
CRH has been ruthless in recent years in dumping businesses it did not feel were delivering high enough returns and chasing more attractive ones as it aims to improve its EBITDA margin by 300 basis points by 2021, a target announced a year ago.
It said on Wednesday that it had reached an agreement to offload its European Shutters and Awnings business to StellaGroup for 300 million euros, and year to date had spent 200 million euros on 16 smaller bolt-on acquisitions.
(Reporting by Padraic Halpin; editing by Jason Neely)