CRH PLC (LON:CRH) was the top FTSE-100 gainer on Thursday after the building materials group announced plans to combine certain of its European and American businesses in a move designed to improve profit margins.
The Ireland-based firm said it would combine its Europe Lightside, Europe Distribution and Americas Products divisions into a new Building Products division from 1 January 2019.
READ: CRH to hold back on major acquisitions for the rest of 2018, says CEO
The group said the new platform “will operate alongside its Americas Materials and Europe Materials divisions, leveraging our scale and network opportunities across our global products businesses.”
CRH – the world’s third-largest building group - said it was aiming to improve the group’s core underlying earnings (EBITDA) margin by 300 basis points by 2021.
It added: “The Group is strongly cash generative and is targeting to have €7bn of financial capacity over the next 4 years (after capex and dividends), providing significant opportunities for further value creation for our shareholders.”
The firm also said it has have initiated a strategic review of its Europe Distribution business, focused on “improving the margins and returns of the business, as well as exploring other strategic options.”
In mid-morning trading, CRH shares were 4.9% higher at 2,810p.