Grafton shares fell 2.3% to 707.2p in early morning trading on Thursday after the firm reported a 4.4% adjusted operating profit drop to £151.1 million in HY1 2022 compared to £158 million in the previous year.
The company announced a revenue growth of 12.2% to £1.1 billion against £1 billion and a 7% slide in adjusted operating profit before property profit to £132.6 million against £142.6 million, alongside a 2.4% decline in adjusted operating profit margin before property profit to 11.5% from 13.9%.
Grafton confirmed a 3.6% adjusted pre-tax profit fall to £143.4 million compared to £148.8 million, and a 7.9% statutory pre-tax drop to £132.4 million against £142.9 million.
The firm noted a strong comparative year in 2021, which saw a surge in customers purchasing DIY and gardening products over lockdown, along with rising building materials costs and a weaker outlook in HY1 2022 as the cost of living crisis looked primed to dampen consumer demand.
The group highlighted net cash of £520.5 million at 30 June 2022 before IFRS 16 lease liabilities.
Grafton said it expected a FY adjusted profit in line with current analyst expectations.
The firm noted an adjusted EPS decrease of 1.9% to 49.5p from 50.5p the year before and a basic EPS slide of 5.5% to 45.8p compared to 48.5p.
“Our first half performance saw a significant normalisation of activity levels following exceptional pandemic related spikes in trading in the first half of 2021. While inflation remains a continuing feature in our markets, we saw improved supply chain consistency as trading patterns normalised and building materials shortages eased,” said Grafton CEO Gavin Slark.
“Though potential macro-economic headwinds remain, Grafton is uniquely placed to outperform given its leading market positions, geographic diversity and the relative resilience of its core repair, maintenance and improvement market.”
“Given the strength of our brands and their market positions together with an exceptionally strong financial position, our focus remains on delivering a strong financial outcome for the year despite the uncertainties in our markets.”
Grafton hiked its dividend 8.8% to 9.25p per share against 8.50p year-on-year.
