Grafton FY profit, revenue dented by store closures

Building materials distributor and DIY retailer Grafton reported a decline in full-year profit and revenue on Thursday after its branches were forced to close due to the pandemic.

In the year to the end of December 2020, adjusted pre-tax profit fell 7.4% to £166.4m on revenue of £2.51bn, down 6.1% on the previous year. Adjusted operating profit was 5.6% lower at £193.3m.

Grafton said trading was in line with expectations until the second half of March.

"The group was heavily impacted by the closure of all branches and stores in Ireland and the majority in the UK, except for emergency supplies, from the end of March.

"There was an immediate recovery in some of our businesses and a steady recovery in others on reopening during the months of May and June. Trading was stronger than anticipated in the second half and we were very encouraged by the level of activity across the overall group."

The company said it saw a "strong recovery" in profitability in the second half, reflecting robust residential repair, maintenance and improvement markets in the UK and Ireland.

Grafton said it was proposing a final dividend of 14.5p a share, down 23.7% from 2019.

Canaccord Genuity reiterated its 'buy' recommendation on the shares after what it called "a good set of results".

The broker said the results were ahead of the expectations set out in January update, with adjusted operating profit around 5% higher than consensus expectations.

"We expect consensus profits for 2021 to move up by +2-4% and end up higher than 2019 levels, which would be impressive given the wider macro backdrop," it said.