Shares in CRH jumped today after the building materials giant announced plans to buy back shares worth $3 billion, a more than three-fold increase on 2021 on the back of record sales and profits for 2022.
Dublin-based CRH also recommended moving its primary listing to the US where it is the largest building materials supplier and made about 75% of its $5.6 billion in core earnings last year, which were up 13% and ahead of expectations.
CRH chief executive Albert Manifold described the US as a "one-way bet".
He said that with already robust demand boosted by government funding such as the $430 billion US Inflation Reduction Act and a rise in the onshoring of manufacturing activity due to geopolitical changes.
"The US really is in good shape and we're facing I suspect five to 10 years of really strong growth," Manifold told Reuters.
"We are now at an historic step-off point in the US. We had the confluence of events coming together, three very, very significant federally funded programmes, the likes of which the United States has never seen before," he said.
In the nearer term, CRH said it expected resilient demand and increased pricing in 2023.
Albert Manifold also said Europe "held up very, very well" last year despite the difficult inflationary environment.
Those cost pressures did not stop CRH from bucking a trend of falling margins across the sector by instead growing its EBITDA margin for the 10th successive year, up 10 basis points to 17.2%.
The leap in share buybacks from the $1.2 billion worth of stock it purchased last year reflected the fact that its balance sheet has never been stronger, with net debt at 0.9 times core earnings, its chief financial officer Jim Mintern said.
CRH also increased dividends by 5% to $1.27 for the year.
The building materials group today reported higher revenues and profits for the year to the end of December on the back of resilient demand.
CRH said its revenues for the year rose by 12% to $32.7 billion, while its profit after tax from continuing operations was 10% ahead of 2021 at $2.7 billion.
The company said its earnings per share (EPS) from continuing operations was 14% higher than 2021 at $3.5.
In addition to the interim dividend of $0.24 per share, CRH said its Board is recommending a final dividend of $1.03 per share.
This would result in a total dividend of $1.27 for the year, an increase of 5% over 2021, in line with the Group's progressive dividend policy.
In its results statement today, CRH noted that its UK and Ireland sales and operating profit were well ahead of 2021 driven by strong pricing and ongoing performance optimisation initiatives.
It said that Ireland primarily benefited from improved construction activity and pricing progress, while in the UK, aggregates and asphalt volumes were behind 2021 due to lower paving activity, while readymixed concrete volumes benefited from an increase in project activity.
CRH also said today it has concluded that a US primary listing would bring increased commercial, operational and acquisition opportunities for CRH.
"In the coming weeks we will outline to our shareholders why we are recommending that it is in the best interests of our business and our shareholders to pursue a primary listing of CRH, together with US equity index inclusion as soon as possible," the company said.
"This change in listing structure will have no impact on CRH plc, which will remain headquartered, incorporated and tax-resident in Ireland," it added.
Looking ahead, CRH said it expects resilient demand and increased pricing in 2023 despite macroeconomic uncertainties and ongoing cost inflation.
CRH said its operations in North America will benefit from strong pricing and robust infrastructure demand being underpinned by significant increases in funding at both federal and state level.
"The non-residential sector is supported by government funding initiatives in clean energy and the onshoring of critical manufacturing, while the residential new-build sector will experience short term weakness as a result of rising interest rates," it stated.
CRH said it expects positive pricing momentum to offset lower volumes in Europe.
It said that construction activity in Central and Eastern Europe will continue to be supported by EU infrastructure funds, while its businesses in Western Europe remain underpinned by resilient repair, maintenance and improvement (RMI) activity and stable infrastructure.
"Notwithstanding a number of macroeconomic risks and uncertainties, CRH remains well positioned for another year of progress in 2023 due to our uniquely integrated, value-added solutions strategy together with a strong and flexible balance sheet," the company stated.
Albert Manifold, CRH's chief executive, said the company's 2022 performance reflects the outstanding commitment of its workers, the underlying strength and resilience of the business and the continued delivery of its integrated, solutions-focused strategy.
"Despite significant cost pressures throughout the year, we delivered further improvements in profits, margins and returns," the CEO said.
"Our strong cash generation together with our relentless focus on disciplined capital allocation has also delivered the strongest balance sheet in our history, providing us with significant opportunities for further growth and value creation going forward," he added.
Headquartered in Ireland and formed from a merger of Cement Limited and Roadstone in 1970, CRH is now quite a major player in construction globally.
It manufactures and supplies a wide range of products for the construction industry.
Shares in the company ended 7.9% higher in Dublin trade today.
Additional reporting by Glenda Sheridan
