Grafton Group Revenue & Profit Rises Amid Challenging Market Conditions

• Good year of progress despite challenging market conditions 

Grafton Group plc ("Grafton" or "the Group"), the European multinational distributor of construction related products and solutions is pleased to announce its final results for the year ended 31 December 2025. 

Financial Highlights

• Full year adjusted operating profit was ahead of expectations1, increasing by 7.1% to £190.2m (2024: £177.5m) mostly driven by the first full year contribution of Salvador Escoda in Spain
  
  
• Strong margin discipline delivered a 50bps improvement in gross margin, helping to maintain a resilient Group operating margin of 7.3% (2024: 7.6%) despite ongoing operating cost pressures
  
  
• Return on capital employed up 60bps to 10.9% (2024: 10.3%)
  
  
• Adjusted earnings per share grew by 5.1% to 75.4p (2024: 71.8p)
  
  
• Strength of balance sheet with £274.0m net cash (before lease liabilities) (2024: £272.1m) provides significant firepower to capitalise on organic and inorganic development opportunities
  
  
• Another year of strong free cash flow generation contributing to more than £700m of free cash flow generated over the last four years
  
  
• A new £25.0m share buyback programme, following £129.2m (2024: £154.1m) returned to shareholders in share buybacks and dividend payments in 2025
  
  
• Full year dividend of 37.75p (up 2.0%) with dividend cover (2025: 2.0 times) at the lower end of the medium‑term target range of two to three times adjusted earnings

Operational Highlights

• Experienced senior leadership team in place to execute strategy across our geographies, Mario Ballarín appointed to the new role of CEO Grafton Iberia
  
  
• Continuing investment to strengthen and consolidate market positions notwithstanding current market weakness in some of our geographies
  
  
• Strong performance in Island of Ireland
  
  
• Profit growth in Great Britain despite a weakening RMI market and slow housebuilding recovery
  
  
• In Iberia, Salvador Escoda has been successfully integrated and performed in line with our pre-acquisition expectations recording profit growth4 in 2025
  
  
• Northern Europe remains challenging but macro indicators improving 

¹ Grafton compiled consensus Analysts' forecasts for 2025 show adjusted operating profit of circa £181.8m and a range of £180.0m to £183.0m.

² Supplementary financial information in relation to Alternative Performance Measures (APMs) is set out on pages 40 to 45.

³ 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 40.

⁴Like-for-like results are presented on a proforma basis to reflect the performance of Salvador Escoda, which was acquired by the Group on 30 October 2024, as though it had been part of the Group for the entire comparative period. 

Click here to download the full annual report 

Outlook 

Positive trading conditions are expected to continue in the Republic of Ireland ("ROI") and Spain, however, in our other geographies, markets are anticipated to remain challenging in 2026. Whilst the Island of Ireland and Iberia segments performed strongly, meaningful recovery in Great Britain and Northern Europe did not materialise as anticipated in 2025 and the exit rate of activity from 2025 was weaker than expected; consequently, the timing of any improvement in these two segments in the year ahead remains uncertain.

Our experienced management teams will continue to maintain a tight focus on efficiency, cost control and delivering value to customers. Despite moderating momentum through the second half, the outlook for Grafton remains favourable, supported by structural growth drivers, strong market positions across all regions, the recovery potential in Great Britain and Northern Europe, a robust balance sheet and a healthy acquisitions pipeline.

In our Island of Ireland segment, we expect the construction market in the ROI to continue to deliver solid growth, supported by increased public‑sector capital investment and a favourable economic backdrop, while no significant volume uplift is anticipated in Northern Ireland due to ongoing weakness in the local economy. We remain vigilant that retail consumer sentiment in the ROI has turned slightly more cautious, with ongoing cost‑of‑living concerns contributing to weaker confidence.

In Great Britain, the near‑term outlook for the construction market remains subdued following the loss of momentum in the latter part of 2025. While easing inflation and supportive interest rates should help, growth in 2026 is likely to be modest and weighted towards the second half.

In Northern Europe, the Dutch construction market is expected to recover gradually in 2026 after growth slowed significantly in the second half of 2025, while in Finland any meaningful construction volume improvement is likely to be delayed until the second half of 2026.

In Iberia, the Spanish construction market is expected to maintain its recovery in 2026, with growth of around 3-4%, supported by sustained housing demand, substantial investment in renewable energy and transport infrastructure, and the accelerating shift toward energy‑efficient and sustainable building practices.

Group average daily like-for-like revenue in the period from 1 January 2026 to 28 February 2026 was 0.2% ahead of the same period last year. Trading in the early part of the year was impacted by prolonged wet weather across our businesses in the Island of Ireland and Great Britain. However, the Island of Ireland remained ahead of the prior year, supported by softer comparators, following the impact of Storm Éowyn in 2025. Notwithstanding unfavourable weather conditions, the market environment in Great Britain remained challenging. In Northern Europe, the return of winter weather conditions supported strong trading activity in Finland, while trading in the Netherlands was negatively affected by the timing of public holidays. Our business in Iberia performed strongly, with the momentum achieved in 2025 carrying into the new year.  

Eric Born, Chief Executive Officer Commented:   

"Delivering profitability ahead of analysts' consensus, despite inflationary pressures and challenging conditions in some of our markets, reflects the successful execution of our strategy of scaling positions across multiple geographies combined with a strong operational focus. We've sustained our focus on margin management, whilst also using our robust balance sheet to invest in strengthening our market positions and our customer proposition. Grafton's resilience in 2025 points to substantial profitability upside as demand recovers in weaker markets and as we scale our presence organically and through complementary acquisitions. 

"We are very encouraged by our strong acquisition pipeline, supported by our highly cash generative business that retained £274m net cash at year-end, and which has supported the return of over £428m to shareholders by way of share buybacks since May 2022. 

"We expect continued growth in the Island of Ireland and Iberia however elsewhere market conditions remain mixed. Though market improvement in Great Britain and Northern Europe is expected to be gradual, we remain upbeat on outlook over the medium term based on structural demand tail winds, positive operating leverage and the scalability and efficiency of our businesses as markets normalise." 

Click here to download the full annual report 

Webcast and Conference Call Details

A copy of the results presentation document will be available at 7:00am on 5 March 2026 via the home page of the Company's website www.graftonplc.com.         

A presentation for analysts and investors will be hosted by Eric Born and David Arnold at 9:45am on 5 March 2026.  A live webcast of the presentation including Q&A will be available to view via the Company's website at www.graftonplc.com or by clicking here. 

Analysts will be invited to raise questions during the presentation.  Should investors wish to submit a question in advance, they can do so before 9.00am on 5 March 2026 by sending an email to ir@graftonplc.com.  A recording of the webcast will be made available on the Company's website.

Source : Grafton Group

Image : Grafton Group

For all the very latest news and intelligence on the UK's largest home improvement and garden retailers, sign up for the Insight DIY weekly newsletter.