Grafton Group Half Year Report Shows 12% Revenue Growth

GRAFTON GROUP plc, the international building materials distributor and DIY retailer, saw a 12% increase in revenue in its half year to 30 June 2022.

The company, which reports a drop in both operating profit (7.9%) and profit before tax (7.3%) on H1 last year says it is undergoing a period of adjustment back to normal conditions after the exceptional performance of last year. It points to the company’s excellent performance in distribution businesses in Ireland and the Netherlands and the good profit contribution from IKH in Finland at 13.2% operating margin. However, volumes and profitability were lower in UK merchant, Selco, relative to last year and revenue and profitability in Woodie’s DIY, Home and Garden retail business has ‘normalised’.

Grafton says adjusted profit for the full year is expected to be in line with forecasts and there is a ‘strong’ adjusted return on capital employed of 18.8%.

Gavin Slark, Chief Executive Officer said, “Our first half performance saw a significant normalisation of activity levels following exceptional pandemic related spikes in trading in the first half of 2021. While inflation remains a continuing feature in our markets, we saw improved supply chain consistency as trading patterns normalised and building materials shortages eased.

“Though potential macro-economic headwinds remain, Grafton is uniquely placed to outperform given its leading market positions, geographic diversity and the relative resilience of its core repair, maintenance and improvement market. Given the strength of our brands and their market positions together with an exceptionally strong financial position, our focus remains on delivering a strong financial outcome for the year despite the uncertainties in our markets.”

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