While construction has been deemed an ‘essential activity’ in the US and Canada, it has varied, with much lower activity in Pennsylvania, New York City, Washington state, Ontario and Quebec
() has shelved its share buyback programme as levels of demand for its building materials have varied by region since governments began imposing coronavirus lockdowns since mid-March, with Europe, Canada and some parts of the US hit hardest.
A decision over the final dividend of 63.0 cents per share will be left to shareholders at the FTSE 100-listed group’s annual meeting on Thursday.
At the end of March, the Dublin-headquartered construction materials supplier had cash and equivalents of more than $6bn after drawing down its €3.5bn revolving credit facility, and is taking mitigation actions include reducing capex and costs.
Like-for-like sales were up 3% in the first quarter for the group, with 8% growth in the Americas and Europe flat.
Construction has been deemed an ‘essential activity’ in the US and Canada, but much lower activity in areas such as Pennsylvania, New York City, Washington state, Ontario and Quebec, CRH said in an update.
Western European operations have been “significantly impacted”, the firm added, with nationwide shutdowns in many of its key markets, including the UK, France and Ireland, while central and eastern European businesses have remained relatively unscathed.
In Asia, CRH’s primary business is its chain of concrete producers in the Philippines, where government restrictions have resulted in significantly lower volumes and activity levels.
Management pointed to “healthy backlogs” and a “favourable bidding environment” as providing continued support for the business in its key North American markets, as well as “early indications of restrictions being eased across a number of markets”.
CRH shares rose more than 7% to 2,309p on Wednesday morning, still down 25% so far in the year.
The update was “solid”, analysts at UBS said, keeping its ‘buy’ recommendation in place with a 2,750p price target.
“While current trading is inevitably tough, we think it is on the whole not quite as bad as anticipated. Beyond the short-term, the group could benefit from M&A opportunities and infrastructure (35% of group sales) stimulus packages.”
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