Buildings materials group CRH today launched its first share buyback programme in a decade and also announced a new target to raise €1.5-2 billion from selling assets.
CRH said last year it would prioritise reinvesting capital in acquisitions but chief executive Albert Manifold floated the possibility of a share buyback in a media interview last week.
Albert Manifold said today that the world's third-largest building group could do both, and would repurchase up to £1 billion of shares over the next 12 months, with the timing based on an ongoing assessment of capital needs.
"Our strong balance sheet and cash flow generation provides us with this opportunity to return excess cash to shareholders, while at the same time continuing to invest in our business and execute our strategic growth initiatives," he said in a statement.
"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 added.
Big spending CRH, which committed almost €5 billion to acquisitions last year, has also been quick to sell any business it deems to no longer meet its returns criteria.
Its new medium-term divestment target followed the completion of disposals worth €2.3 billion in the first quarter.
In a trading update today, CRH said year-on-year group sales fell by 2% in the first quarter due to the timing of Easter holidays and prolonged winter weather conditions in Europe and North America.
The company is the biggest producer of asphalt for highway construction in the US.
CRH said that like-for-like sales in Europe dropped by 2%.
It noted that a recovery in certain key markets were offset by adverse weather conditions and the timing of Easter holidays which occurred in the second quarter of 2017.
In Ireland, CRH said that volumes in all of its products were lower due to weather disruption, but added that it was seeing positive pricing trends.
In the Americas, unfavourable weather conditions also impacted a number of key regions.
CRH said that while the economic and business environment remained positive, like-for-like Americans sales were down 3% on 2017.
Meanwhile, competitive market conditions were evident in the Philippines with like-for-like sales 5% behind the first quarter of last year.
But the company managed to increase prices in eight of the European countries it operates in, which analysts at Davy Stockbrokers said was particularly encouraging.
CRH said it expected earnings in the seasonally less significant first half to be in line with last year and ahead in the second half, provided there are normal weather patterns.
CRH shares moved higher in Dublin trade today.
