Grafton Group launches £30m buyback as first-half profits fall
Grafton Group Ut (CDI)
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17:15 30/12/24
Grafton Group has unveiled a £30m share buyback as the building materials distributor and DIY retailer shows confidence in its full-year outlook despite a dip in profits and cashflow in the first half of 2024.
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The company said it was launching a share purchase programme "on the strength of anticipated free cashflow generation in the current financial year and confidence in the group's prospects".
Nevertheless, adjusted operating profit in the six months to 30 June fell to £83.1m from £105.1m a year earlier, which the company put down to weaker market conditions outside its home market in Ireland.
Revenues were down 4.4% on last year at £1.14bn, pulled lower by reduced volumes across the UK, Netherlands and Finland. This was met by a flat performance from its Irish businesses, Chadwicks and Woodie's.
Cashflow generated from operations slumped to £161.1m from £191.3m in the first half of 2023.
Looking ahead, Grafton said it continues to expect to meet profit forecasts, with the "important" Autumn trading season still to come.
"Whilst uncertainties remain in the short term, our medium-term outlook remains positive, supported by strong demand fundamentals, not least in the demand for new housing as markets normalise and consumer confidence improves," said chief executive Eric Born.
"At this point in the year, with the important Autumn trading season yet to come, we continue to anticipate delivering adjusted operating profit for 2024 in line with analysts' expectations."