Construction materials company CRH (CRH) extended a recent strong run for the shares with a 2% rise to £38.48 after flagging an improving outlook for the business.
This followed a doubling in first-half profit, driven by a positive underlying backdrop in both North America and Europe. The company is well positioned to benefit from a $1 trillion infrastructure spending programme which is close to being signed off by American lawmakers.
‘Based on current trading conditions and the positive momentum that we see across our markets, we expect second-half group EBITDA to be ahead of a record prior year,’ the company said.
For the six months ended June, pre-tax profit rose to $1 billion from $518 million year-on-year as sales climbed 15% to $14 billion.
Following continued ‘strong cash generation and consistent with our progressive dividend policy, the board has decided to increase the interim dividend to 23 cents per share, an increase of 4.5% on prior year,’ the company added.
‘SET TO BE BUSY’
AJ Bell financial analyst Danni Hewson commented: ‘Construction materials firm CRH looks set to be pretty busy for the foreseeable future as the US gets set to launch a huge infrastructure programme.
‘But it’s not just US spending on roads and bridges, CRH is a highly diversified business across different products, geographies and end-uses providing exposure to different sweet spots in the global economic recovery.
‘There are two specks in this pretty cloudless sky for CRH – one is the risk of adverse weather causing construction delays and the other is the input cost inflation which is dogging many businesses right now.’