CRH says investor backing for US listing ‘strong’ as earnings rise

CRH, the Dublin-based building materials giant, said investors have signalled “strong support” for its plan to move its main stock market listing to the US, as it prepares to put the matter to a formal shareholder vote in June.

The group also said in a trading update issued on Wednesday, a day before its annual general meeting, that it also had a “positive start” to the current year, with first-quarter sales and earnings ahead of the same period in 2022, even amid unfavourable weather on both sides of the Atlantic and a drop in revenues in its European units.

“Looking ahead, despite some ongoing macroeconomic uncertainties and an inflationary cost environment, we expect first-half sales, ebitda and margin to be ahead of the prior year period,” said chief executive Albert Manifold. Ebitda, which refers to earnings before interest, tax, depreciation and amortisation, came to $2.2 billion (€2 billion) in the first half of last year.

CRH, the largest company on the Irish stock market, confirmed to The Irish Times earlier this month that it is planning to quit the Dublin exchange as it seeks to ensure that it will be eligible for inclusion on an influential US stock market index, known to be the S&P 500.

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The move will come as a massive blow to Irish stockbrokers and Euronext Dublin, the operator of the Irish market, who had been hoping CRH would retain its secondary listing in the Republic even as it advanced a plan to move its primary stock quotation from London to New York. CRH now generates three-quarters of its earnings in North America.

The building materials giant will remain headquartered and tax resident in Ireland. However, it is believed its advisers think it would be easier for the S&P 500 committee to include the company on the benchmark index if it were not also listed in Dublin, where most of the trading volume in the stock takes place.

“Since the initial announcement [in March], we have engaged extensively with our shareholders to explain the rationale for our recommendation. After careful consideration of the feedback received and based on the strong support indicated by our shareholders, we will now seek formal approval for the listing change from shareholders at an extraordinary general meeting to be held on 8 June 2023,” CRH said.

Flutter Entertainment is also looking at taking on a US stock market listing, fuelling speculation that it may follow CRH in moving its primary quotation to New York.

CRH reported on Wednesday that its group sales rose by 7 per cent, including the impact of acquisitions. Sales in its Americas materials solutions unit rose 10 per cent and those in its Americas building solutions business gained 22 per cent.

However, reported sales declined 1 per cent in both its Europe materials solutions and Europe building solutions units.

“Looking ahead to our first-half trading performance, in our Americas segments we expect robust infrastructure demand, good activity in key non-residential segments, continued pricing progress and positive contributions from acquisitions,” CRH said. “We anticipate a more challenging backdrop in Europe driven by continued inflationary pressures and some slowdown in the new-build residential sector.”

The group is currently also advancing a $3 billion buyback programme that’s set to conclude early next year. The group spent more than $4 billion repurchasing its own stock over the past five years.