Grafton Group Reports 8% Profit Growth Despite Continued Weakness in UK

Grafton Group has reported increased revenue and adjusted operating profit for the first half of 2026, with strong performances in Ireland and Iberia offsetting continued challenging trading conditions in Great Britain.

The building materials distribution group reported revenue of £1.34bn for the six months to 30 June 2026, up 6.7% from £1.25bn in the comparable period. Adjusted operating profit increased by 8.2% to £98.5m, while adjusted earnings per share rose 10.8% to 39.4p. 

Grafton maintained its full-year adjusted operating profit guidance of £190m to £200m, although the Group said trading conditions during the second half are expected to remain broadly similar to those experienced during the first six months. 

Great Britain remains under pressure

The Great Britain division, which includes Selco Builders Warehouse, Leyland SDM, TG Lynes, CPI EuroMix and StairBox, continued to face difficult market conditions.

Revenue declined 5.1% to £367.2m, while adjusted operating profit before property profit fell 29.3% from £24.8m to £17.5m. The operating margin reduced from 6.4% to 4.8%. 

Grafton said weakness across UK construction markets continued to impact trading, with new-build housing activity constrained by affordability, financing costs and site viability, while demand for discretionary home improvement projects remained subdued.

Despite lower volumes and increased competitive pressure, gross margins improved slightly through disciplined margin management, targeted promotions and the passing through of supplier price increases and higher fuel costs.

The Group also kept a tight rein on expenditure, with like-for-like overheads increasing by only 1.1%. However, these actions were not sufficient to offset the impact of the lower sales volumes on profitability. 

Trading has remained subdued since the half-year end. Average daily like-for-like revenue in Great Britain declined 5.6% between 1 July and 23 August, compared with a 5.1% decline during the first half. 

Stronger performance across Ireland

Grafton's Island of Ireland businesses, comprising Chadwicks, Woodie’s and MacBlair, delivered revenue growth of 10.3% to £579.4m, with adjusted operating profit before property profit increasing 10% to £60.6m.

Like-for-like revenue increased by 3.4%, supported particularly by strong trading at Chadwicks, while Woodie’s delivered modest growth against strong prior-year comparatives. 

Woodie’s continued to invest in its store and digital proposition during the period. The retailer opened a new store in Ennis, Co. Clare in June — its first new store in 17 years — while online sales increased 22.3%, supported by the introduction of a new dropship channel and the launch of next-day delivery. 

The Island of Ireland businesses have continued their positive momentum into the second half, with average daily like-for-like revenue increasing 4.9% between 1 July and 23 August. 

Iberia becomes an increasingly important growth engine

The strongest growth came from Grafton's rapidly expanding Iberian operations.

Revenue increased 39.3% to £145.1m, while adjusted operating profit before property profit more than doubled from £6.5m to £14.1m. Operating margin increased from 6.3% to 9.7%. 

The performance reflected continued organic growth at Salvador Escoda alongside the contribution from Mercaluz, acquired at the end of April.

Grafton has now created an Iberian business with annualised revenues of approximately €400m in less than two yearsand has set an ambition to grow revenue in the region to approximately €1bn by 2030. 

Grafton maintains 2026 guidance

Group average daily like-for-like revenue increased 0.6% during the first half and strengthened to +1.5% between 1 July and 23 August, with Ireland and Iberia continuing to outperform Great Britain. 

Chief Executive Eric Born said the first-half performance demonstrated the benefits of Grafton's exposure to markets operating at different points in the economic cycle.

He said the Group's second-half outlook remained characterised by strong trading in Iberia and Ireland, mixed conditions in Northern Europe and continuing weakness in Great Britain, while maintaining confidence in the Group's medium-term growth prospects. 

Grafton also announced an interim dividend of 11.0p per share, an increase of 2.3%, while its ninth share buyback programme of up to £25m commenced at the end of June.

Source: Grafton PLC Press Release & Insight DIY Team

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