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Strong Half Year Performance by Grafton Group

Selco great image

Earlier today Grafton Group PLC owner of the Selco, Buildbase and Woodies chains has reported a strong set of results for the six months ended 30 June 2018. 

Highlights:                

  • Revenue up 9% to £1.45 billion - 8% increase in constant currency
  • Further positive progress towards medium term financial objectives with the operating margin increasing by 50 bps to 6.4% and ROCE by 80bps to 14.0%
  • Strong organic growth in Irish and Netherlands Merchanting
  • Excellent performance by Woodie's Retailing in Ireland and Mortar Manufacturing in the UK
  • Strong cash flow of £109.7 million from operations 
  • Continued investment to support future profit growth with £120.1 million spend on Leyland SDM acquisition and capital projects 
  • 14% increase in dividend in line with progressive dividend policy 

£m*

 

H1 2018

H1 2017

Change

Revenue**

 

1,448

1,333

+9%

Adjusted***

 

Operating profit before property profit 

 

88.0

77.0

+14%

Operating profit

 

92.5

79.1

+17%

Profit before tax

 

90.0

75.4

+19%

Earnings per share - basic

 

30.8p

25.9p

+19%

Statutory results

 

Operating profit

 

90.1

77.7

+16%

Profit before tax

 

87.6

74.1

+18%

Earnings per share - basic

 

30.0p

25.5p

+18%

Dividend

 

6.00p

5.25p

+14%

Net debt

 

101.7

80.2

+£21.5m

Adjusted operating profit margin pre property profit 

Adjusted operating profit margin

 

6.1%

6.4%

5.8%

5.9%

+30bps

+50bps

Return on capital employed

 

14.0%

13.2%

+80bps

Download the Grafton Group full press release here.

Gavin Slark, Chief Executive Officer commented: 

"We are pleased to report a strong first half performance across the Group with all segments reporting double digit growth in profitability.  Excellent organic growth in key markets has been complemented by the positive impact of self-help measures and development activity.  The geographic diversity of our operations continues to be an important strength of the Group.  We made further progress towards our medium term financial objectives and invested £120 million on the Leyland SDM acquisition and capital projects to support future growth in profitability."

Insights & Analysis - Steve Collinge 

Another strong set of results from Grafton Group, which puts the recent disappointing performance from Travis Perkins and particularly Wickes into sharper perspective. 

Travis Perkins blames weaker DIY market for lower profits.

Is Travis Perkins running out of patience with Wickes?

Grafton's UK merchanting division saw a 1.9% rise in like-for-like sales, strengthened by the acquisition of Leyland SDM and growth from new branches of Selco, whilst the Belgian merchanting business, which contributed three per cent of Group revenue, faced reduced demand in its market and operating profit was lower. The Woodie's DIY, Home and Garden retailing business in Ireland celebrated its 30th anniversary recording exceptional growth in revenue and profitability with a particularly strong performance from seasonal products.  The operating profit margin increased by 190 basis points to 7.5 per cent.

Source : Insight DIY & Grafton Results Announcement

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22 August 2018

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