Grafton Group shares were down 3.9% to 733.9p in early morning trading on Tuesday after the company announced a 13.9% climb in total revenue at constant currency in HY1 2022.
Grafton Group confirmed a reported 12.1% rise in revenue to £1.1 billion in the term against £1 billion year-on-year, excluding the traditional merchanting business in Great Britain that was divested on 31 December 2021.
The firm reported an average daily like-for-like revenue increase of 3.4%, which was complemented by a significant contribution from its acquisitions in Finland, the UK, Ireland and the Netherlands.
Grafton Group highlighted the strong performance of its distribution business in Ireland and the Netherlands, with a more subdued performance in the UK against strong comparators in 2021.
The company pointed out the unwinding of higher margin revenue from retail customers across the UK and Ireland in HY1 2021 that was driven by high demand for home and outdoor space improvements.
The group reported normalised revenue in its retail business in Ireland as its exceptional gains across the Covid-19 lockdown reversed in line with expectations. Meanwhile, the company’s UK manufacturing business demonstrated a strong performance.
Grafton Group further mentioned its share buyback schedule of up to £100 million, which launched in May and is set to conclude by the end of this year.
The company had repurchased £42.8 million in shares at 30 June 2022.
Grafton Group commented it would not be adjusting its FY 2022 operating profit expectations despite the macro-economic volatility weakening its outlook.
The firm added it was currently in the process of finding a suitable replacement for departing CEO and board director Gavin Slark, who is set to continue in the position until 31 December 2022.
“The Group’s overall trading performance was good against a very strong comparator in the first half of last year and our operating profit expectations for the full year are unchanged,” said Slark.
“Notwithstanding current macro-economic risks, our portfolio of resilient high performing businesses has the flexibility to adapt to changing circumstances and is well positioned to outperform.”
“Grafton is in a very strong financial position and, with a pipeline of acquisition opportunities, the Group is well positioned to make continued progress on the delivery of its strategy.”
