CRH has ‘$40bn firepower’ for investment and cash returns over next five years

CRH will have scope to spend $40 billion (€34 billion) on investment and cash returns to shareholders over the next five years as it continues to grow revenues and earnings a pace, chief executive Jim Mintern has said.

Unveiling his medium-term strategy nine months into the job as CEO, Mr Mintern said he is targeting annual revenue growth of 7-9 per cent between out to 2030. He is aiming for the group to post adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) margins of 22-24 per cent over the period.

The margin goal would mark a step up from the rate of 19.5 per cent posted last year. The company’s margins have doubled over the 11-year period in which CRH was led by Albert Manifold, driven as the group moved from largely being a seller of cement and other base materials into full-scale construction services, with higher pricing power.

CRH also aims to convert more than 100 per cent of its earnings into free cash flow on average over the five years. Free cash flow is the amount of cash a company has left after accounting for running expenses and capital investment.

“With $40 billion of financial capacity over the next five years, our superior strategy, enabled by our unmatched scale and connected portfolio, positions us to execute on unrivalled growth opportunities,” said Mr Mintern ahead of investor day presentations in New York on Tuesday.

Mr Mintern, a company veteran of more than two decades, said earlier this year he will continue the group’s recent trend of selling off unwanted assets as it remains committed to pursuing acquisitions. However, there will be a greater emphasis on construction innovation under his leadership, he said at the time.

CRH dropped its Irish stock market listing two years ago as it moved its main stock quotation to New York. The company’s London-listed shares were up 0.9 per cent in early trading on Tuesday.

CRH has also reaffirmed its financial guidance for 20254, including adjusted Ebitda of $7.5 billion to $7.7 billion.