CRH shares tumble 4% after update on 'challenging' European market

The company anticipates sales growth to be slower in Europe due inflationary pressures and a slowdown in the new-build residential sector

CRH chief executive Albert Manifold: 'We had a positive start to the year in a seasonally quiet trading period.' Picture: Naoise Culhane 

Irish building materials giant CRH shares tumbled more than 4% after it published a mixed trading update which predicted that sales for the first half of the year will be ahead of expectations but the European market will remain challenging for the company.

It said it anticipates sales growth to be slower in Europe due to inflationary pressures and a slowdown in the new-build residential sector.

However, the company said it expects sales for the first half of the year will be ahead of expectations as it gets a profit boost from its US business.

“We had a positive start to the year in a seasonally quiet trading period,” said chief executive Albert Manifold.

The company said that sales from its two US units rose 10% and 22% respectively year-on-year. CRH makes about 75% of its profits in the US.

"In our Americas segments we expect robust infrastructure demand, good activity in key non-residential segments, continued pricing progress, and positive contributions from acquisitions in the first half," said CRH.

Meanwhile, in Europe, like-for-like sales were 6% ahead of the same period in 2022 due to price increases across all products and regions.

Earlier this year, CRH announced plans to ditch its primary stock market listing in London for one in the US after it reported a 13% jump in core earnings to $5.6bn (€5.3bn).

In its financial results for 2022, the company also posted a 10% rise in profit after tax from continuing operations of $2.7bn.

Last month, CRH announced plans to buy back shares worth $3bn, a more than three-fold increase on last year on the back of record sales and profits for 2022 driven by price increases.