Grafton launches another share buyback, backs FY profit expectations
Building materials distributor and DIY retailer Grafton announced another share buyback programme on Thursday as it backed its expectations for full-year operating profit and posted a rise in revenue.
Grafton Group Ut (CDI)
In an update for the 1 July to 31 October, the Woodie’s and Chadwicks owner said that group average daily like-for-like revenue was up 1.8% versus the same period a year earlier, and 17.3% higher compared to the same period in 2019.
In the 10 months to the end of October, group revenue from continuing operations was up 9.5% at £1.93bn.
Grafton said it continued to benefit from the geographic diversity of its markets, with over half of revenue derived in Ireland, the Netherlands and Finland. It said the favourable first-half revenue trends in the distribution businesses in Ireland and the Netherlands continued amid solid underlying demand and building materials price inflation.
In the UK distribution business, however, trading conditions remained softer as households reduced discretionary spending on home improvements.
Revenue in the Finnish distribution business was ahead of a strong prior year comparator. Grafton said trading normalised in line with the prior year in the DIY, Home and Garden business in Ireland, while the UK manufacturing business continued to perform strongly.
Grafton said it continues to expect to deliver full-year adjusted operating profit consistent with current market forecasts of around £266m.
The company also said that following the completion of its £100m share buyback programme between 9 May and 12 September, it will now launch a further buyback of up to £100m, which will end no later than 30 April 2023.
Chief executive Gavin Slark said: "Grafton delivered a solid performance in the period demonstrating the benefit of its balanced spread of operations across geographic markets and sectors.
"Notwithstanding macroeconomic challenges particularly in the UK, the group is confident that it will deliver its expectations for the year. Grafton is in a very strong financial position enabling the group to increase returns to shareholders through a new share buyback programme announced today, which is our second buyback programme of 2022, whilst also retaining the financial flexibility to fund suitable acquisition opportunities."