Shares in CRH (LON:CRH) have advanced in London in today’s session, with investors welcoming the company’s announcement that it is bringing together some of its European and American units. The move comes as the blue-chip building materials group looks to boost its profit margin by 2021.
As of 09:33 BST, CRH’s share price had added 4.93 percent to 2,812.00p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.27 percent higher at 7,710.06 points. The group’s shares have added less than one percent to their value over the past year, as compared with about a 2.6-percent gain in the Footsie.
CRH to merge units
CRH announced in a statement this morning that will stablish a new global Building Products division effective January 1 next year, bringing together its Europe Lightside, Europe Distribution and Americas Products divisions. The new platform will be led by Keith Haas, currently President, Americas Products, and will operate alongside the company’s Americas Materials and Europe Materials divisions.
The blue-chip building materials group said that absent any major dislocations in the global economy or the input cost environment, it was targeting to improve its EBITDA margin by 300 basis points by 2021. CRH further aims to have €7 billion of financial capacity over the next four years.
Analysts on group
As of May 25, the consensus forecast amongst 21 polled investment analysts covering CRH for the Financial Times has it that the company will outperform the market. According to MarketBeat, the building materials group currently has a consensus ‘buy’ rating and an average price target of 3,021.50p.
Today’s announcement follows CRH’s trading update last month when the company said that prolonged winter weather conditions and the timing of Easter holidays had resulted in first quarter like-for-like sales down two percent in the three months to March 31 compared to the same period last year.