CRH Continues Share Buyback Program
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Insights
The announcement by CRH plc regarding the completion of its latest share buyback phase and the initiation of another tranche represents a significant capital allocation decision. The $1.0 billion returned to shareholders is a substantial amount, indicating a strong cash position and potentially a signal of management's confidence in the company's intrinsic value. The long-term strategy of returning $7 billion since May 2018 showcases a commitment to shareholder returns.
The additional $300 million buyback tranche, which is part of a wider $3 billion program, underlines a systematic approach to capital return. The use of an independent third party, Citigroup Global Markets Inc., to conduct the buyback under pre-set parameters, is a common practice to avoid conflicts of interest and to comply with regulatory frameworks such as Rule 10b5-1 and Rule 10b-18 under the U.S. Securities Exchange Act, as well as EU Market Abuse Regulation.
From a financial analysis perspective, buybacks can be accretive to earnings per share (EPS) by reducing the number of outstanding shares, potentially leading to a positive market reaction. However, it's also critical to assess the opportunity cost of such capital return initiatives, as the funds used for buybacks could alternatively be invested in growth opportunities or debt reduction.
In the context of the building materials industry, CRH plc's buyback program may be indicative of a broader industry trend where companies are focusing on optimizing capital structure and returning excess cash to shareholders. The cancellation of repurchased shares will reduce the share capital, possibly improving return on equity (ROE) metrics.
It is important to consider industry-specific factors such as cyclical demand for building materials, regional market conditions and the impact of global economic trends on the sector. The decision to not conduct repurchases outside the United States might reflect a strategic focus on its U.S. operations or regulatory and tax considerations.
Stakeholders should monitor how this capital deployment aligns with the company's long-term growth strategy, particularly in light of potential shifts in the construction sector due to economic, environmental and regulatory changes.
The legal framework governing the share buyback is critical to ensure compliance and prevent market abuse. CRH plc's adherence to Rule 10b5-1 allows companies to repurchase their own shares at times when they otherwise might be prevented from doing so by insider trading laws. Rule 10b-18 provides a safe harbor for companies to repurchase shares without being deemed to manipulate the market.
Furthermore, the EU Market Abuse Regulation, as incorporated into UK law post-Brexit, continues to influence the corporate actions of companies like CRH plc with listings in multiple jurisdictions. The legal intricacies of these regulations ensure that the buyback is executed in a manner that is fair and transparent to all market participants.
Understanding these legal parameters is crucial for stakeholders, as non-compliance could result in significant financial penalties and reputational damage for the company.
DUBLIN, IRELAND / ACCESSWIRE / December 21, 2023 / CRH plc, the leading provider of building materials solutions, is pleased to announce that it has completed the latest phase of its share buyback program, returning a further
Between 25 September 2023 and 20 December 2023, 17.1 million ordinary shares listed on the New York Stock Exchange and on the London Stock Exchange were repurchased. This brings total cash returned to shareholders under our ongoing share buyback program to
CRH today also announces that it has entered into an arrangement with Citigroup Global Markets Inc. ("Citi") to repurchase ordinary shares listed on the New York Stock Exchange on CRH's behalf for an aggregate maximum consideration of
Citi will conduct the Buyback on CRH's behalf and will make trading decisions under the Buyback independently of CRH in accordance with certain pre-set parameters. The maximum number of ordinary shares which may be acquired pursuant to the Buyback is 18,000,000. The purpose of the Buyback is to reduce the share capital of CRH.
The Buyback will be conducted within the parameters prescribed by (i) Rule 10b5-1 and Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended and (ii) the EU Market Abuse Regulation (596/2014) and Commission Delegated regulation (EU) 2016/1052 as such legislation forms part of retained EU law in the United Kingdom ("UK") (as defined in the EU (Withdrawal) Act 2018) and as amended pursuant to the UK's Market Abuse (Amendment) (EU Exit) Regulations 2019 (as may be amended and/or supplemented from time to time). No repurchases will be made outside of the United States. The repurchased ordinary shares will be cancelled.
Any decision in relation to any future buyback program will be based on an ongoing assessment of the capital needs of the business and general market conditions.
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Contact CRH at +353 1 404 1000
Albert Manifold | Chief Executive |
Jim Mintern | Chief Financial Officer |
Frank Heisterkamp | Director of Capital Markets & ESG |
Tom Holmes | Head of Investor Relations |
About CRH
CRH (NYSE: CRH, LSE: CRH) is the leading provider of building materials solutions that build, connect and improve our world. Employing c.75,800 people at c.3,160 operating locations in 29 countries, CRH has market leadership positions in both North America and Europe. As the essential partner for road and critical utility infrastructure, commercial building projects and outdoor living solutions, CRH's unique offering of materials, products and value-added services helps to deliver a more resilient and sustainable built environment. The company is ranked among sector leaders by Environmental, Social and Governance (ESG) rating agencies. A Fortune 500 company, CRH's shares are listed on the NYSE and LSE.
Registered Office: No 12965. Registered Office: 42 Fitzwilliam Square, Dublin 2, R02 R279, Ireland
Forward-Looking Statements
This document contains statements that are, or may be deemed to be forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements may generally, but not always, be identified by the use of words such as "will", "believe", "continues", "is expected to", or similar expressions. These forward-looking statements include all matters that are not historical facts or matters of fact at the date of this document. Forward-looking statements are subject to risks, uncertainties and other factors because they relate to events and depend on circumstances that may or may not occur in the future and/or are beyond CRH's control or precise estimate. Such risks, uncertainties and other factors include, but are not limited to, plans and expectations related to the anticipated financial and operational results of the US primary listing, expectations related to the US as a driver for future growth, and plans and expectations related to government policies. There are important factors, risks and uncertainties that could cause actual outcomes and results to be materially different, including risks and uncertainties relating to CRH described under "Principal Risks and Uncertainties (Risk Factors)" of the Company's Annual Report and Form 20-F for the year ended December 31, 2022. You are cautioned not to place undue reliance on any forward-looking statements. These forward-looking statements are made as of the date of this document. The Company expressly disclaims any obligation or undertaking to publicly update or revise these forward-looking statements other than as required by applicable law.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
SOURCE: CRH PLC
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FAQ
What did CRH plc (CRH) announce regarding its share buyback program?
What is the total cash returned to shareholders under CRH plc's (CRH) ongoing share buyback program?
What arrangement did CRH plc (CRH) enter into with Citigroup Global Markets Inc.?
When will the Buyback arrangement with Citigroup Global Markets Inc. end?
What legislation will govern the Buyback arrangement with Citigroup Global Markets Inc.?
