Moving on: Eric Born is set to succeed Gavin Slark, pictured, as Grafton’s chief executive on 28 November
Building materials distributor and DIY retailer Grafton has announced a fresh share buyback programme as it maintained its expectations for full-year operating profit and posted a rise in revenue.
Following the completion of its £100million share buyback programme between 9 May and 12 September, the group said it now planned to launch a further buyback of up to £100million, which will end no later than 30 April 2023.
Grafton shares rose sharply today and were up 11.61 per cent or 84.40p to 811.30p this afternoon, having fallen over 37 per cent in the last year.
In an update for the period from 1 July to 31 October, the Woodie’s and Chadwicks owner said group average daily like-for-like revenue climbed 1.8 per cent when compared against the same period a year earlier, and 17.3 per cent against the same period back in 2019.
In the 10 months to the end of October, group revenue from continuing operations was up 9.5 per cent, at £1.93billion.
Grafton said it continued to benefit from the geographic diversity of its markets, with over half of revenue stemming from 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.
But, across its UK distribution business, trading conditions remained soft as households reduced discretionary spending on home improvements.
Selco Builders Warehouse average daily like-for-like revenue slipped by 6.1 per cent over the period and building materials sales price inflation ‘moderated’ from the high double-digit level experienced in the first half, the company said.
It added: ‘Households reduced discretionary and non-essential spending on their homes in response to the significant decline in real disposable incomes, interest rate increases and a fall in consumer confidence.’
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 still expected to deliver full-year adjusted operating profit consistent with current market forecasts of around £266million.
Boss 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 macro-economic 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.’
Eric Born is set to succeed Gavin Slark as the group’s chief executive on 28 November.
