Grafton Group reports record revenue for 2017

Grafton Group, owner of Builders Merchant chains Buildbase and Selco Builders Warehouse in the UK and DIY chain Woodie’s in Ireland, has reported a revenue increase of 9% for the year ending 31st December 2017 and a record £2.7 billion turnover.

The company which also has merchanting operations in the Netherlands and Belgium, reported pre-tax profits up 35% to to £154.5 million.

Highlights:-

• Record revenue reflects strong organic growth.
• Adjusted Group operating profit before property profit up 17%.
• Growth in profitability in all segments and geographies.
• Strong organic growth in Irish Merchanting, Woodie's DIY and Mortar Manufacturing.
• Acquisitions and organic growth increase scale and profitability of Dutch merchanting business.
• Continued investment in Selco with a record number of branch openings.
• Traditional UK Merchanting business benefits from growth and prior year restructuring.
• Record cash from operations of £210.7 million (2016: £168.6 million) finances investment and strengthens balance sheet.
• Investment of £119.1 million (2016: £72.3 million) on capital expenditure and acquisitions.
• Progressive dividend policy - growth of 121% over the past five years

The company said the good performance was driven principally by organic sales growth, an improvement in the group’s gross margin and good cost control. 

Download Grafton Group 2017 Results Statement here.

Grafton said its UK Builders Merchant business saw revenues increase 4.7% to €1.8 billion following the restructuring undertaken in 2016. However, it also said that overall conditions in the UK merchanting market were relatively weak given the slowdown in UK growth and house prices.

In February, it completed the acquisition of Leyland SDM, London’s largest independent specialist decorators’ merchant for £82.4 million.

Read - Selco owner Grafton acquires Leyland SDM.

In Ireland, Grafton commented that their business continued to be an important and consistent growth engine, delivering double digit revenue growth and a strong increase in profitability for the fourth year in succession. Revenue in Ireland increased 8.9% to £403m, whilst operating profits increased 23.3% to £35.5 million.

Performance of their Woodies DIY chain rose almost 15% to £180.4 million, while operating profit increased 53% to £11.2 million as the chain expanded and improved its position in the Irish hardware market. 

Grafton CEO Gavin Slark said “2017 was a very good year for Grafton that saw all segments and geographies contribute to strong revenue growth and a 15 per cent increase in adjusted profit before tax and earnings per share. Our expectations are positive for the current year and we remain confident about the potential to take advantage of opportunities that create value for shareholders."

Source: Insight DIY Team

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