Grafton sees profit ahead of forecast despite tough market conditions

Grafton Group PLC on Thursday said it expects a small revenue increase for 2023, while profit is expected to exceed a forecast range.

The Dublin-based building materials distributor and DIY store chain operator is expecting to deliver a revenue increase of 0.8% to £2.32 billion, up from £2.30 billion a year ago. It noted that 60% of the year’s revenue has been generated outside of the UK, from its operations in Ireland, the Netherlands and Finland.

The company noted that its operations in Ireland and the Netherlands delivered 2.1% and 4.4% increases in revenue respectively, though its UK and Finland operations both saw revenue decline by 2.4%.

Grafton said it expects its full-year adjusted operating profit to be slightly ahead of the top-end of the analyst forecasts range of £194.0 million to £201.0 million. In 2022, adjusted operating profit amounted to £285.9 million.

The firm said it has delivered a ‘resilient performance’ despite softer market conditions in September and October.

The company also announced that, as of December 31, it has completed £47.5 million of its £100 million share buyback programme.

Chief Executive Eric Born said: ‘While the trading environment in the final months of the year continued to be subdued across most of our markets, we are pleased that adjusted operating profit for 2023 is now expected to be slightly ahead of the top end of analysts’ forecasts.

‘We made good progress during the year developing and executing our strategy and in starting to build a deeper pool of acquisition opportunities in targeted European markets. We remain confident in the medium-term drivers of demand in our markets and, underpinned by a strong balance sheet, Grafton is well positioned for growth as trading conditions improve.’

Grafton shares rose 1.2% to 906.30 pence each on Thursday morning in London.

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