CRH may tap HS2-led UK public spending boom

CRH may tap HS2-led UK public spending boom

Irish building materials giant CRH may be well-placed to tap the billions of pounds in UK transport and infrastructure spending sanctioned by Boris Johnson.

That is according to broker Davy, which referenced the HS2 high-speed rail project — which has an estimated cost of £106bn (€125bn) — and £5bn of funding to build 250 miles of cycle routes, in a research note.

“CRH’s Tarmac business is well-placed to benefit from greater infrastructure spending in the UK,” said Davy analyst Robert Gardiner. “CRH’s second-largest end market is the UK, where the infrastructure outlook improved with the approval of HS2 and additional projects aimed at improving the country’s transport network,” he said.

Boris Johnson, this week, formally confirmed the decision to proceed with the first phase of HS2. Ultimately, the project aims to link London to the north of England by a high-speed train link.

Tarmac — which CRH bought in 2015 as part of its mega-purchase of assets from

European peer

LafargeHolcim — operates from 400 locations in the UK. CRH also has cement, readymix concrete, contracting, and building products interests in Britain.

Last year, CRH said it remained committed to its UK business despite falling profits and a looming Brexit.

The company said at the time that the UK business was a core element of the group, and that it was unclear how much Britain would invest on infrastructure after leaving the EU.

Davy also noted improved infrastructure spending in the US, which could top $1,000bn (€918bn) trillion over the next 10 years.

“The US remains CRH’s largest end-market, leaving the group ideally placed to benefit,” said Mr Gardiner.

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