- CRH unveils plans to move primary listing to New York
- Blow to UK market
- Company posts record results for 2022
Building materials firm CRH (CRH) has signalled its intention to quit the FTSE 100 and seek a primary listing in the US which accounts for the majority of its earnings.
The news is a further blow to the prestige of the UK stock market, after news overnight that chip designer ARM will also list in the US rather than opting for a return to London, where it traded before its $32 billion takeover by Japan’s Softbank in 2016.
CRH’s proposed move across the Atlantic accompanied a record set of full year results and investors were clearly enthused, marking the shares 10.7% higher to £43.80.
The company reported a 12% rise in revenue to $32.7 billion, with pre-tax profit also up 12% to $3.47 billion as the company managed cost inflation effectively. A total dividend for 2022 of $1.27 represented a 5% increase on 2021 and the company announced plans for a $3 billion share buyback.
Sales were up 15% in its Americas business and, in citing the rationale for its New York move, CRH observed North America now accounts for 75% of its earnings before interest, tax, depreciation and amortisation.
CRH is set to update the market on its plans alongside a scheduled trading statement on 26 April.
AJ Bell investment director Russ Mould said the decision to seek a listing in the US is logical, and could help it reach a higher valuation, useful if it wants to use shares for acquisitions. He noted it is following in the footsteps plumbing group Ferguson (FERG) which made a similar move in May 2022.
Mould added: 'Efforts to relax the listing rules to attract more companies to London come across as a bit desperate. It should be a badge of honour to list in the UK, but that reputation is dwindling fast.
‘Overseas investors lost interest in the trading venue as soon as the UK voted in favour of Brexit, and valuations have got even cheaper. That’s hardly a good sales pitch to attract more big companies to the UK market.
‘There are plenty other companies in the FTSE 100 which do business in the US that could easily follow Ferguson and CRH. That’s not a good look for the London Stock Exchange.’
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (Tom Sieber) and the editor of the article (Martin Gamble) own shares in AJ Bell
