Grafton Group Profit Slightly Ahead of Expectations

• Full year adjusted operating profit slightly ahead of analysts' expectations

Grafton Group plc ("Grafton" or "the Group"), the international building materials distributor and DIY retailer is pleased to announce its final results for the year ended 31 December 2024. 

Financial Highlights

• Full year adjusted operating profit of £177.5 million (2023: £205.5 million) with trading slightly ahead of analysts' expectations1 and higher reported property profit
  
  
• The Group's diversification and strong operational focus enabled it to navigate challenging markets
  
  
• Strong free cash flow of £178.2 million (2023: £203.0 million), a 100% conversion rate (2023: 99%) from adjusted operating profit
  
  
• Platform acquisition of Salvador Escoda executed for €128.0 million2 providing a strong base for future Iberian growth
  
  
• £154.1 million (2023: £228.3 million) returned to shareholders in share buybacks and dividend payments in 2024
  
  
• Strong balance sheet of £272.1 million net cash (before lease liabilities) providing firepower for organic and inorganic development opportunities
  
  
• Reflecting Board's confidence, full year dividend increased by 2.8 per cent and an incremental £30.0 million share buyback to commence funded by strong free cash flow generated in 2024
  
  
• Adjusted return on capital employed of 10.3% (2023: 11.9%)

Operational Highlights

• Strong performance in Ireland while the rate of decline continues to ease in the UK
  
  
• Group returned to average daily like-for-like sales growth against easier comparators in the final quarter of the year
  
  
• Overall Group gross margin broadly unchanged and overheads continued to be tightly controlled
  
  
• Moderation of product price deflation accelerated in the second half of the year
  
  
• Integration of Salvador Escoda is progressing well  

¹ Grafton compiled consensus Analysts' forecasts for 2024 show adjusted operating profit of circa £169.1 million

² Calculated on a cash and debt free basis before leases

³ Supplementary financial information in relation to Alternative Performance Measures (APMs) is set out on pages 41 to 46.

⁴ The term "Adjusted" means before exceptional items, amortisation of intangible assets arising on acquisitions and acquisition related items in both periods, which are defined on page 41 

Eric Born, Chief Executive Officer Commented:   

"We are pleased to have successfully navigated challenging market conditions in 2024 to deliver adjusted operating profit slightly ahead of analysts' expectations.  This resilient performance was supported by our exposure to different geographies, our diversified customer base and the active management of gross margin and costs. 

"Highlights in the period included the strong performance of our Irish businesses and completion of the platform acquisition of Salvador Escoda, whilst also returning £154.1 million to shareholders through share buybacks and dividends. 

"The integration of Salvador Escoda continues to progress well, extending our geographic diversification and exposure to a new growth market, presenting an attractive opportunity to build further scale across the Iberian Peninsula in due course. 

"Whilst the timing of recovery in certain geographies remains uncertain, the medium term outlook is positive.  We will continue to strengthen our positions in existing markets and are excited by the development opportunities ahead."

New Share Buyback Programme

The Company also announces today that it has entered into non-discretionary arrangements with Goodbody Stockbrokers UC (acting as agent) and Numis Securities Limited (acting as principal) to conduct a further share buyback programme and to buy back ordinary shares (the “Shares”) for a maximum aggregate consideration of up to £30 million and to make trading decisions under the programme independently of the Company in accordance with certain pre-set parameters (the “Buyback”).

The Buyback will commence today, 6 March 2025, and end no later than 31 August 2025 subject to market conditions. Under the terms of the Buyback, the Shares will be repurchased on the London Stock Exchange and cancelled.

The maximum number of shares which can be repurchased under the Programme is 17,030,094 Shares, subject at all times to the applicable authority granted by shareholders at the Company’s AGM held on 2 May 2024 and including, for the avoidance of doubt, pursuant to any renewed authority granted by shareholders at the 2025 AGM of the Company. The purpose of the Programme is to reduce the share capital of the Company in line with this announcement.

The Buyback will also be conducted within the parameters prescribed by the Market Abuse Regulation 596/2014 and the Commission Delegated Regulation (EU) 2016/1052 (also as in force in the UK, from time to time, including, where relevant, pursuant to the UK’s European Union (Withdrawal) Act 2018 and the Market Abuse (Amendment) (EU Exit) Regulations 2019) as well as the applicable laws and regulations of the UK Financial Conduct Authority.

The Company will make further announcements in due course following any buy back of Shares. There is no guarantee that the Buyback will be implemented in full or that any Shares will be bought back by the Company.

Source : Grafton Group plc

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