CRH to decide on sale of European distribution business 'in 2-3 months'
Building materials group CRH will decide, within the next three months, whether or not to sell its European distribution division.
Speaking after the group's AGM in Dún Laoghaire, chief executive Albert Manifold refused to confirm reports that Bank of America has been hired to sell the unit, which has an estimated value of €2bn.
He did, however, say interest has been shown and a decision on the future of the division will be taken in the next two-to-three months. Mr Manifold said "a lot of people" have shown interest in the business and that the general sector attracts a lot of interest in general.
"What I can say is that we're going through a very honest and open process over deciding whether this business is a right fit for the family of CRH or not. It's a very simple allocation of capital decision. It's not even an allocation issue; we have capital allocated to it. The question is 'do you want to leave it in there or take it out and put it elsewhere?'"
The business has been the subject of a strategic review since last year. Earlier this week CRH said the review was ongoing and all options were being considered.
Mr Manifold said it was a question of weighing up the chances of realising the full potential of the division against the value that could be crystallised from it now and what could be done with the money.
To that end, CRH said it will seek to continue to strike a balance - when it comes to cash deployment - between ongoing share buybacks and more acquisitions. Its focus for the next three years is on growing profitability, cash generation, margins and returns. Much of that will be prompted by organic growth from recent large acquisitions still being fully consolidated into the group structure.
At the agm, itself, Mr Manifold told shareholders he has never been more optimistic than he currently is about CRH's future.
However, he said he was "disappointed" with the group's share price performance. Up by just 3% in the past 12 months, the stock fell by around 2% after the AGM.
While CRH will only focus on core markets for future acquisitions, Mr Manifold said its main emerging markets presence in the Philippines remains a long-term investment with operations there recovering. He disagreed with a shareholder who suggested the Philippines business was "a problem child" for CRH.
Mr Manifold would not be drawn on Cevian Capital, Europe's largest activist investor which bought into CRH earlier this year. He said the board views Cevian like any other shareholder and welcomes the views of all key investors, adding that all are happy with CRH's growth objectives.
