Building materials group CRH launches fresh $300m share buyback

Building materials group CRH has launched a fresh share buyback worth $300million (£246million).

The group, which is based in Ireland but listed in London, said the latest programme will bring the total returned to investors via buybacks to $4.1billion (£3.4billion) since 2018. 

By buying back some of its shares, the company reduces their number on the market, boosting the share price. 

If there are fewer shares, this increases the company’s earnings per share, a key measure for investor analysis of a stock.  

The company had only finished another $300million buyback last Friday. CRH shares rose 1.8 per cent to £32.30 in morning trade. 

The stock has fallen by around 13 per cent over the last year, as its European division struggles with the soaring cost of energy and raw materials, as well as euro weakness against the dollar.

Its American division is in better health though, helping the company enjoy a surge in sales and profit in the last quarter. 

In November, CRH reported a 13 per cent rise in sales to £20.56billion in the three months to September, while profit was up 14 per cent to £3.54billion.

‘Any decision in relation to any future buyback programmes will be based on an ongoing assessment of the capital needs of the business and general market conditions,’ the group told investors today.

Buybacks became increasingly popular during the pandemic, when companies were told not to dish out dividends. 

Some argue that they enrich executives if their bonuses are based on share price performance or growth in earnings per share.

Bosses are also being accused of opting for buybacks rather than embarking on long-term capital investment projects.