Grafton unveils £100m share buyback
Shares in Grafton Group sparked on Thursday after the building materials specialist posted a jump in first-quarter sales and announced a £100m share buyback.
Total revenues rose 15% in the period from 1 January to 17 April, to £645.3m, while average daily like-for-like revenue growth was 7.2%.
The group, which owns Woodie’s DIY, Selco Builders Warehouse and Leyland SDM, among other brands, said building materials price inflation had been key driver of revenue growth.
Gavin Slark, chief executive, said: “We have seen a positive start to the year, and generally good underlying demand conditions in the residential repair, maintenance and improvements markets that we serve.
“While there is some uncertainty about how the squeeze on disposable incomes will impact demand, we remain agile and responsive to any trading patterns that may emerge over the remainder of the year.”
He added that a “disciplined” approach to capital allocation meant the company now planned to return free cashflow to shareholders. Under the proposed share buyback programme, which is subject to shareholder approval, Grafton will buy back ordinary shares for an aggregate consideration of up to £100m
Slark said: “This will enable us to increase capital returns to shareholders while maintaining good operational and strategic flexibility.”
As at 0930 BST, shares in Grafton were trading 5% higher at 1,005.2p.