- CRH to push ahead with US primary listing
- Americas performing strongly but sales drop in Europe
- Outlook for European business hit by inflationary pressures and new-build slowdown
Construction materials CRH (CRH) saw its recent share price momentum arrested as a trading update flagged a challenging backdrop in Europe and confirmed plans to shift its primary listing to the US.
Said confirmation is a further blow to the prestige of the UK stock market after BHP (BHP) shifted its own main listing to Australia and chip designer ARM chose New York over a return to London.
The proposed move still needs to be put to a vote but CRH, which derives the lion's share of its revenue and profit across the Atlantic, says it has received a positive reception from shareholders. The company will hold a meeting on 8 June, if the plans are approved the company would exit the FTSE 100.
The shares fell 3.8% to £38.70 as the Dublin-headquartered outfit reported group sales up 7% year-on-year in the first quarter a ‘seasonally quiet period’. While sales were up 10% and 22% in the Americas Materials Solutions and Americas Building Solutions respectively, European sales were down 1%.
AMERICAS STRONG BUT EUROPE LOOKING TRICKY
The company expects the Americas segment to experience ‘robust infrastructure demand, good activity in key non-residential segments, continued pricing progress and positive contributions from acquisitions’ in the first half of 2023.
CRH expects a more challenging backdrop in Europe driven by continued inflationary pressures and some slowdown in the new-build residential sector.
Overall, CRH expects half-year earnings before interest, tax, depreciation, and amortisation to be ahead of its 2022 results of $2.2 billion.
Writing when the US move was first floated in March, Berenberg analyst Harry Goad observed: ‘We welcome this as a catalyst to unlock the group’s valuation relative to US peers, particularly given that the US now accounts for c75% of profit and growing.’
