Grafton Group plc (LON:GFTU), the international building materials distributor and DIY retailer, has announced its half year results for the period ended 30 June 2025.
Financial Highlights
| § | First half adjusted operating profit was in line with expectations, increasing by 9.5 per cent to £91.0 million (H1 2024: £83.1 million) driven in large part by the contribution of Salvador Escoda |
| § | Continued focus on margin management led to gross margin improvement of 60 basis points which offset the impact of increased overheads connected to inflationary pressure and higher labour costs |
| § | Group operating margin maintained at 7.3% (H1 2024: 7.3%) with adjusted return on capital employed of 10.9% at a similar level to prior year (H1 2024: 11.1%) |
| § | Adjusted earnings per share increased by 6.5% to 35.5p (H1 2024: 33.4p) |
| § | Strong balance sheet of £245.8 million net cash (before lease liabilities) providing significant firepower to capitalise on organic and inorganic development opportunities |
| § | Interim dividend increased by 2.4 per cent and a further £25.0 million share buyback to commence, funded by strong free cash flow generated in 2025 |
| § | Full year adjusted operating profit is expected to be broadly in line with analysts’ expectations 1 with the important Autumn trading period still to come |
Operational Highlights
| § | Ongoing investment to strengthen and consolidate market positions notwithstanding cyclical lows in activity in some of our geographies |
| § | Integration of Salvador Escoda is progressing well – positive progress in pursuit of further organic and inorganic growth opportunities in Iberia, an attractive and fragmented growth market |
| § | Strong performance in Ireland – acquisition of HSS Hire Ireland complements Chadwicks’ hire business, while Woodie’s delivered a strong performance in the first half |
| § | UK Distribution returned to profit growth for the first time since 2021 despite a challenging RMI market |
| § | Activity in the Netherlands remains relatively subdued and in Finland a strengthened management team is in place to maximise opportunities when the market recovers from historical lows |
| Total Operations 2 | H1 2025 | H1 2024 | Change |
| Revenue | £1,252m | £1,137m | 10.1% |
| Adjusted3 operating profit | £91.0m | £83.1m | 9.5% |
| Adjusted operating profit before property profit | £91.0m | £83.1m | 9.5% |
| Adjusted operating profit margin before property profit | 7.3% | 7.3% | – |
| Adjusted profit before tax | £86.8m | £84.1m | 3.2% |
| Adjusted earnings per share | 35.5p | 33.4p | 6.5% |
| Interim dividend | 10.75p | 10.5p | 2.4% |
| Adjusted return on capital employed (ROCE) | 10.9% | 11.1% | (20bps) |
| Net (debt) (including IFRS 16 leases) | (£147.3m) | (£46.8m) | (£100.5m) |
| Net cash (before IFRS 16 leases) | £245.8m | £361.1m | (£115.3m) |
| Statutory Results | H1 2025 | H1 2024 | Change |
| Operating profit | £87.7m | £71.3m | 22.9% |
| Profit before tax | £83.5m | £71.7m | 16.5% |
| Basic earnings per share | 35.1p | 28.4p | 23.3% |
1 Grafton compiled consensus analysts’ forecasts for 2025 show adjusted operating profit of circa £185.1 million and a range of £184.0 million to £187.3 million.
2 Supplementary financial information in relation to Alternative Performance Measures (APMs) is set out on pages 39 to 44.
3 The term “Adjusted” means before exceptional items, amortisation of intangible assets arising on acquisitions and acquisition related items in both periods, which are defined on page 39.
Eric Born, Chief Executive Officer Commented:
“Grafton delivered a resilient performance in the first half, with revenue and profit approximately 10 per cent higher than the same period last year, driven by strong contributions from Spain and Ireland. Following the platform acquisition of Salvador Escoda, non-UK markets now account for approximately 64 per cent of the Group’s turnover. Given our ambition to be a leading player in the European building materials distribution market and our exposure to the growing and fragmented Iberian market, we would expect that diversification trend to continue.
“Whilst we saw an easing of trading momentum towards the end of May and into June, the start of the second half has seen a return to growth of Group average daily like-for like revenue. Outlook for the full year varies by market, but in the round, and with the important Autumn trading months to come, we expect full year adjusted operating profit to be broadly in line with analysts’ expectations.
“More widely, after having returned over £403 million to shareholders by buying back almost one fifth of the Group’s shares since May 2022, our strong balance sheet and liquidity leaves Grafton in an excellent position to execute our growth strategy. Despite lingering cyclical lows, we continue to invest in the UK, the Netherlands and Finland, given their strong recoverability potential over time. In addition to organic development, we are actively pursuing bolt-on and platform acquisitions in our chosen European markets.”
Webcast and Conference Call Details
A copy of the results presentation document will be available at 7:00am on 4 September 2025 via the home page of the Company’s website www.graftonplc.com.
A presentation for analysts and investors will be hosted by Eric Born and David Arnold at 9:00am on 4 September 2025. A live webcast of the presentation including Q&A will be available to view via the Company’s website at www.graftonplc.com or by clicking here.
Analysts will be invited to raise questions during the presentation. Should investors wish to submit a question in advance, they can do so before 8.15am on 4 September 2025 by sending an email to [email protected]. A recording of the webcast will be made available on the Company’s website
