Robust Results & Strong Recovery - Grafton Group

Grafton Group have published their Half Year Results for the six months ending 30th June 2020.

Highlights

• Revenue down 19% and adjusted operating profit in continuing operations down 61% due to Covid- 19 pandemic.
• Strong recovery in RMI markets across all geographies.
• Exceptional performance by Woodie’s following 51 days of suspended trading.
• Netherlands business remained open with increased scale and profitability following Polvo acquisition.
• Strong cash flow from operations of £121.5 million (2019: £157.2 million).
• Net cash position (pre IFRS 16) increases to £58.6 million (31 December 2019: £7.8 million).
• Liquidity of £693.4 million at 30 June 2020 (30 June 2019: £628.6 million).
• Encouraging start to second half with average daily like-for-like revenue up by 3.8%.

Download the full half-year results report here.

Gavin Slark, Chief Executive Officer Commented:

“We are very pleased with the performance of our business which was made possible by the outstanding efforts and commitment of colleagues in a half year outturn that demonstrates the resilience and the cash generative qualities of our Group and the agility of our management teams in responding to the Covid-19 pandemic.

Grafton’s resilience, market positioning and geographic diversity together with its low debt and strong liquidity leaves the Group well positioned for continuing progress. We are very encouraged by the performance of the Group in recent months as it emerged in a strong position from the Covid-19 lockdown and based on current trends the Group should deliver a similar level of adjusted operating profit in the second half to the comparable period last year.”

Download the Half Year Results Investor Presentation here.

Analysis & Commentary - Steve Collinge

Overall sales were  down 19% for the period with adjusted operating profit of £39.4m ahead of general expectations of around £15m. This was supported by around a not insignificant £25m of furlough proceeds and £5m of business rates relief.

By division, the Netherlands (LFL -0.7%) and Irish Retail (flat profit despite closure) were the standout performers with the margins at the Irish Distribution business also strong, demonstrating the benefits of Grafton's geographic diversity.

In the UK, Operating Profit of £2.3m was underpinned by £19.4m of furlough income. Selco performed better post-lockdown (June, LFL +4.7%) than Buildbase (June LFL, -14%) and not surprisingly, some organisational changes are now being undertaken, which will see them close 15 merchanting branches.

Source: Insight DIY & Grafton Group

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