CRH eyes huge slice of Biden's $1tn US rebuilding plan

CRH CEO Albert Manifold sees business growing in the US.

Irish building materials giant CRH expects to be one of the biggest beneficiaries of President Biden’s intended $1tn (€850bn) spending splurge on roads and infrastructure improvements in the US.

The massive multi-year US infrastructure spending plan is currently moving towards full government approval Stateside, with it expected to be formally passed in the autumn.

Speaking on the back of a strong set of first-half financial results, CRH chief executive Albert Manifold said the group – the single largest building materials business in North America – is “well-positioned”, both geographically and through its product base, to take advantage of a surge in US infrastructure contracts.

He said while the fine detail of the plan remains to be seen, the overall intention would be “very good for our industry, and very good for CRH”.

CRH posted a strong set of first-half results, buoyed by recoveries in its main markets of Europe and North America.

The concrete and cement giant posted sales of $14bn (€12bn) for the six months to the end of June, 15% higher than the same period last year. 

Earnings, on an EBITDA basis, were 25% ahead, year-on-year, at $2bn.

Mr Manifold said the group expects the earnings momentum seen in the first half of the year to carry over for the remainder, based on current trading conditions and the sustained recovery in its core markets.

“Our integrated and solutions-focused approach leaves us uniquely positioned for the changing needs of construction, while our continued strong cash generation provides us with the flexibility to invest in future growth opportunities for our business,” Mr Manifold said.

The group achieved record cash generation in the first half.

CRH – which is in the midst of an ongoing share buyback programme, returning cash to investors - said its acquisitions pipeline remains “strong”.

“Our significant balance sheet capacity offers flexibility to capitalise on these opportunities and deliver further value to shareholders,” it said.

CRH has already spent €1.1bn on acquisitions and investments this year. The group has also increased its interim dividend for shareholders by 4.5%, year-on-year, to 23c per share.

CRH’s group finance director Jim Mintern said acquisitions remain an “integral” part of the group’s growth strategy and it will continue to make purchases so long as they are shareholder value-enhancing.

“The pipeline is good, but we will only execute if [a deal is] value-enhancing,” Mr Mintern said.

He said the M&A climate has improved since the worst of the Covid crisis and that CRH has stepped up its own activity. 

Mr Mintern said the group could have done “many times” the level of acquisition and investment activity than it actually did do in the first half of this year.

CRH shares jumped nearly 4% on the back of its latest results.