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  • Date Title
    05 March 2014 2013 Final Results
    04 February 2014 Acquisition of Belgian Merchanting Business Completed
    09 January 2014 Trading Update

    2013 Final Results

    Released: 05/03/2014

    Final Results for the year ended 31 December 2013

    Grafton Group plc (“the Group”), the builders merchanting and DIY Group with operations in the UK, Ireland and Belgium, announces its final results for the year ended 31 December 2013. Following its listing on the London Stock Exchange during 2013, the Group now reports its results in sterling.

    Financial Highlights

    • Revenue up 8% to £1.9 billion
    • Underlying operating profit up 27% to £77.2 million from £61.0 million
    • Group operating profit margin increased by 60 basis points to 4.1% from 3.5%
    • Underlying profit before taxation up 35% to £64.9 million from £48.1 million
    • Adjusted basic earnings per share up 48% to 22.3p
    • 21% dividend increase reflects continuing improvement in trading performance
    • Strong cash generation from operations of £95.3 million and year-end gearing of 15%

    Operating Highlights

    • Strong UK merchanting performance benefited from self-help measures adopted over recent years and expansion of the branch network
    • The merchanting business in Ireland returned to growth in the second half
    • DIY market in Ireland stabilised
    • Tight management of gross margins in competitive markets and disciplined control of costs
    2013
    £'m
    2012*
    £'m

    % change
    Revenue 1,900 1,761 +8%

    Underlying
    (Before pension credit and property impairment in 2013
    and before restructuring costs and amortisation in 2012)

       
    Operating profit 77.2 61.0 +27%
    Profit before tax 64.9 48.1 +35%
    Profit after tax 51.7 35.0 +48%
    Adjusted earnings per share – basic 22.3p 15.1p +48%
    Statutory    
    Operating profit 80.0 37.9 +111%
    Profit before tax 67.7 25.1 +170%
    Profit after tax 62.1 31.6 +96%
    Earnings per share – basic 26.8p 13.6p +97%
    Dividend 8.5p 7.0p +21%
    Net debt 133.7 164.9 -19%
    Total equity 874.3 817.6 +7%
    *Restated as required by IFRS following the adoption of IAS 19 (Revised) 'Employee Benefits'.

    Gavin Slark, Chief Executive Officer commented:

    "The Group recovery is making good progress in markets that are still challenging. We are maintaining the disciplined approach to costs and margins demonstrated by these results. Grafton continues to develop a balanced growth strategy combining both organic growth and acquisitive growth where appropriate. Trading in the current year has been encouraging and, while we expect recovery in our markets to be gradual, the Group is confident of building on its strong 2013 performance in 2014."

    Webcast details

    A results presentation hosted by Gavin Slark and David Arnold for analysts and investors will be held today 5 March 2014 at 10am (Irish Time).
    The web address to access the live webcast is as follows;
    www.graftonplc.com/webcast/

    Replay
    The webcast will be available to watch later in the day.

    The results presentation can be viewed/downloaded at http://www.graftonplc.com

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Gavin Slark, Chief Executive Officer
    David Arnold, Chief Financial Officer

    Murray Consultants + 353 1 498 0300
    Joe Murray

    MHP Communications + 44 20 3128 8100
    James White

    Cautionary Statement
    Certain statements made in this announcement are forward-looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied by these forward looking statements. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of Directors and senior management concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth, strategies and the businesses operated by the Group. The Directors do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

    View the full 2013 Final Results announcement in PDF format.

    Acquisition of Belgian Merchanting Business Completed

    Released: 04/02/2014

    Grafton Group plc ("Grafton"), the builders merchanting and DIY Group with operations in the UK, Ireland and Belgium, confirms that, having received approval from the Belgium Competition Authority, it has completed the acquisition of Binje Ackermans SA, a six branch builders merchanting business details of which were announced on 21 October 2013.

    Ends

    For further information please contact:  
    Grafton Group plc
    Gavin Slark
    David Arnold
    +353 1 216 0600
    Chief Executive Officer
    Chief Financial Officer
    Murray Consultants
    Joe Murray
    +353 1 498 0300
    MHP Communications
    James White
    +44 20 3128 8100

    Trading Update

    Released: 09/01/2014

    Grafton Group plc, the builders merchanting and DIY Group with operations in the UK, Ireland and Belgium, issues the following Trading Update for the year ended 31 December 2013 in advance of its Final Results for 2013 which are scheduled for announcement on 5 March 2014.

    Group Revenue
    Activity levels benefitted from an improvement in economic conditions as the year developed and trading in the final months of the year provided further evidence that the recovery underway in the Group's markets has started to take hold. Group revenue for the twelve months to 31 December 2013 was £1.90 billion, an increase of 8.0 per cent from £1.76 billion for 2012.

    The table below incorporates average like for like revenue growth for the nine months to the end of September, the three months to the end of December and the full year.

    Average Daily Like for Like Revenue Growth - 2013*

    Total Revenue

     

    Nine months to 30 Sep 2013

    Three months to 31 Dec 2013

    Twelve months to 31 December 2013

    Twelve months to 31 December 2013*

    UK Merchanting

    3.0%

    3.9%

    3.2%

    6.7%

    Irish Merchanting

    2.6%

    6.7%

    3.6%

    1.9%

    Irish Retailing

    1.0%

    2.7%

    1.5%

    (0.9%)

    Manufacturing

    6.5%

    44.3%

    14.5%

    6.5%

    * Constant currency

    Merchanting (89% of Group Revenue)
    The UK Merchanting business, which generated almost three quarters of Group Revenue, returned to volume growth following five years of flat or declining volumes. The improvement in market conditions was driven by the recovery in the wider economy and the housing market in particular. The increase in total revenue for the year also reflects growth in the branch network through acquisitions and organic developments.

    The Irish Merchanting business stabilised in the first half and returned to overall growth in the second half. There were early indications that the new housing market returned to modest growth following a period of contraction that continued for almost six years. Total revenue growth reflects the consolidation of a number of branch locations during the second half of 2012.

    Irish Retailing (9% of Group Revenue)
    Whilst there was a noticeable improvement in sentiment during the second half of the year, consumers still remained relatively cautious about their finances. Spending in the Woodie's DIY businesses showed modest growth in recent months with the benefit of promotional activity. The closure of two stores last year accounted for the decline in total revenue.

    Manufacturing (2% of Group Revenue)
    The mortar manufacturing business in Britain, which mainly supplies the residential new build market, benefitted from strong demand as the new homes market improved with support from Government funding initiatives and increased availability of mortgage finance.

    2013 Operating Profit
    The Group remains on course to report full year operating profit (before a non recurring pension credit) in line with its expectations.

    Gavin Slark, Chief Executive Officer of Grafton Group plc commented:

    "There are encouraging signs that the relatively recent recovery underway in our principal markets appears to have more substantive foundations. Grafton is well placed to benefit from a sustained improvement in trading conditions, but we are adopting a cautious stance towards our prospects for 2014 until such time that activity levels in our principal markets have strengthened further."

    For further information please contact:  
    Grafton Group plc
    Gavin Slark
    David Arnold
    +353 1 216 0600
    Chief Executive Officer
    Chief Financial Officer
    MHP Communications
    James White
    +44 20 3128 8100
    Murray Consultants
    Joe Murray
    +353 1 498 0300
  • Date Title
    07 November 2013 Interim Management Statement
    21 October 2013 Agreement to Acquire Belgian Merchanting Business for €20.5 million
    16 October 2013 Change of Listing Arrangements
    16 September 2013 Change of Listing Arrangements and Reporting Currency
    28 August 2013 2013 Interim Results
    10 July 2013 Trading Update
    10 July 2013 Appointment of Group Chief Financial Officer
    14 May 2013 Interim Management Statement
    14 May 2013 Appointment of Non-Executive Director
    27 March 2013 Acquisition of Thompsons Merchanting Business in England
    07 March 2013 2012 Final Results
    09 January 2013 Trading Statement

    Interim Management Statement

    Released: 07/11/2013

    Grafton Group plc, the builders merchanting and DIY Group with operations in the UK, Ireland and Belgium, issues the following Interim Management Statement for the period from 1 July 2013 to 31 October 2013.

    Group Revenue
    The Group experienced an improvement in revenues in the four months to the end of October against the background of generally more positive trading conditions in its markets. Revenue for the ten months to 31 October 2013, was £1.60 billion (ten months to 31 October 2012: £1.49 billion), an increase of 7.4 per cent on the same period last year.

    The table below shows the like for like 2013 revenue growth for the first two quarters, the last four months to 31 October 2013 and the total revenue for the ten months to date.

    Average Daily Like for Like Revenue Growth – 2013*

    Total Revenue

     

    Q1

    Q2

    Four months to 31 October
    2013

     

    Ten months to 31 October 2013*

    UK Merchanting

    (0.6%)

    4.2%

    4.1%

     

    6.2%

    Irish Merchanting

    2.4%

    (0.6%)

    5.6%

     

    1.1%

    Irish Retailing

    (12.3%)

    8.5%

    4.1%

     

    (1.7%)

    Manufacturing

    (10.3%)

    8.0%

    25.5%

     

    0.7%

    *Constant currency

    Merchanting (89% of Group Revenue)
    The UK Merchanting business, which contributed 74 per cent of Group Revenue, increased like-for-like volumes supported by more favourable trading conditions as the economic recovery became more established and the new housing and repair, maintenance and improvement (RMI) markets started to recover. The improvement in total revenue also reflected the benefit of development activity including the opening of two Selco branches.

    Overall trading in the Irish Merchanting business stabilised in the first half following five years of volume declines. There were indications in recent months of a recovery in some regional markets led by improved demand in the greater Dublin area, Cork and the Mid-West region. Total revenue growth includes the impact of branch consolidations during 2012.

    Irish Retailing (9% of Group Revenue)
    The recovery under way in the Irish economy contributed to improved sentiment but consumers remained cautious. Spending in the Woodie's DIY businesses, which benefitted from strong demand for seasonal products during the summer, showed more modest growth in recent months. The closure of two stores last year accounted for the decline in total revenue.

    Manufacturing (2% of Group Revenue)
    The mortar business in Britain benefitted from progressively stronger quarterly demand due to the recovery in the new homes market where a sharp increase in housing starts from a low base was driven by a more stable economic outlook, improved consumer confidence and increased availability of mortgage finance.

    Full Year Forecast
    The Group is on course to report full year operating profit (before pension credit) in line with its expectations.

    Financial Position
    The Group continued to maintain a strong financial position with good cash generation from operations, low gearing, significant liquidity and undrawn bank facilities.

    Gavin Slark, Chief Executive Officer of Grafton Group plc commented:

    "The housing market in the UK is benefiting from Government backed initiatives and confidence is slowly but surely returning. This should have a positive, though lagged, effect on Grafton as housing transactions and household spending on RMI increases. In Ireland, consumer confidence has improved and the Merchanting and DIY markets have stabilised at very low levels of activity."

    Ends

    For further information please contact:

    Grafton Group plc
    Gavin Slark
    David Arnold
    +353 1 216 0600
    Chief Executive Officer
    Chief Financial Officer
    MHP Communications
    Andrew Jaques
    James White
    +44 20 3128 8100
    Murray Consultants
    Joe Murray
    Pat Walsh
    +353 1 498 0300

    Agreement to Acquire Belgian Merchanting Business for €20.5 million

    Released: 21/10/2013

    Grafton Group plc ("Grafton" or the "Group"), the builders merchanting and DIY Group with operations in the UK, Ireland and Belgium, is pleased to announce that it has reached agreement through a wholly owned subsidiary to acquire Binje Ackermans SA, a six branch builders merchanting business based in Brussels and trading under the MPRO brand. The transaction is expected to close in the first quarter of 2014 subject to obtaining approval from the Belgium Competition Authority. Binje Ackermans SA is a wholly-owned subsidiary of Saint- Gobain.

    MPRO reported revenue of €50 million (£40.5 million) in the financial year to 31 December 2012. The total consideration payable, which will be satisfied in cash, is €20.5 million (£17.4 million) on a debt and cash free basis and is subject to the agreement of assets and liabilities at the date of completion.   The value of the gross assets at 31 December 2012 was €20.8m (£17.0 million).

    MPRO reported a loss of €2.2 million (£1.8 million) for the year to 31 December 2012 which included a charge for amortisation of intangibles and restructuring costs.  The acquired business is forecast to operate at breakeven for the year to 31 December 2013.

    Commenting on the proposed transaction, Gavin Slark, Chief Executive Officer of Grafton Group plc said:

    “This transaction presents a unique strategic opportunity for Grafton to acquire a business with a leading position in the Brussels market.  MPRO’s branches are an excellent geographic fit with the Group’s existing branches which are located in the west of Belgium.  The proposed acquisition creates opportunities for scale related benefits and operational synergies in the areas of procurement, central services and the sharing of best practice while also providing a solid base for future growth in the Belgian merchanting market.”

    Ends

    For further information please contact:
    Grafton Group plc +353 1 216 0600
    Gavin Slark, Chief Executive Officer
    David Arnold, Chief Financial Officer
    Murray Consultants +353 1 498 0300
    Joe Murray
    Pat Walsh
    MHP Communications +44 20 3128 8100
    Andrew Jaques
    John Olsen

    Notes to Editors

    Grafton Group plc is the third largest builders merchant in the UK, trading under the Buildbase and Selco brands and is among the top four plumbers merchanting businesses trading under the Plumbase brand. In Ireland, Grafton is the largest builders merchant and DIY retailer. In Belgium, the Group holds a 65 per cent shareholding in YouBuild which trades from 11 branches situated in the west of Belgium. YouBuild reported revenue of €34.4 million (£29.3 million) for the six months to June 2013.

    On 16 October 2013, Grafton Group plc became solely traded on the London Stock Exchange following a change in its listing arrangements.

    Change of Listing Arrangements

    Released: 16/10/2013

    Further to the announcement dated 16 September 2013, Grafton Group plc ("Grafton" or the "Group"), the builders merchanting and DIY group with operations in the UK, Ireland and Belgium, confirms that the changes to its listing arrangements have now taken effect.

    With effect from the opening of business today, Grafton Units will be traded solely on the London Stock Exchange, and will be denominated in Sterling in pence per Unit.

    Subject to the independent deliberations of the FTSE committees, it is anticipated that Grafton will be included in the FTSE UK Index Series from the close of trading on 20 December 2013, following the next FTSE quarterly review to be held on 11 December 2013.

    The Group's annual financial statements for the year ending 31 December 2013 and thereafter will be presented in Sterling and the Board intends that, from March 2014, dividends will be declared in Sterling. Shareholders will however continue to have the option of receiving dividends in either Sterling or Euro. Grafton Group will remain headquartered, domiciled and tax resident in Ireland.

    Ends

    For further information please contact:
    Grafton Group plc +353 1 216 0600
    Gavin Slark, Chief Executive Officer
    David Arnold, Chief Financial Officer
    Murray Consultants +353 1 498 0300
    Joe Murray
    Pat Walsh
    MHP Communications +44 20 3128 8100
    Andrew Jaques
    John Olsen
    James White
    Nick Haynes
    Numis Securities + 44 20 7260 1000
    Tim Rowntree

    Change of Listing Arrangements and Reporting Currency

    Released: 16/09/2013

    Grafton Group plc (the "Company", "Grafton" or the "Group"), the builders merchanting and DIY Group with operations in the UK, Ireland and Belgium, announced on 28 August 2013 that its Board was undertaking a review of the listing arrangements for Grafton Units.

    This review was prompted by the fact that the Group has achieved significant growth in scale and geographic diversification since its shares were originally listed on the Dublin and London stock exchanges. Three quarters of the Group’s revenue has for some time been generated in the UK and most of the Group’s development activity is taking place outside Ireland. In addition, the shareholder profile of Grafton has changed significantly and the majority of the Group’s shares are now held by institutional investors located outside of Ireland.

    Following the completion of its review, which included consultations with a range of shareholders, the Board has determined that it would be beneficial for Grafton Units to be included in the FTSE UK Index Series. The Board believes that this would increase the Group’s profile and its suitability as an investment for UK and international investors. However, the Company’s primary listing on the Irish Stock Exchange (the "ISE") prevents it from being eligible for inclusion in the FTSE UK Index Series. The Board has therefore decided to cancel the Company's listing on the ISE while maintaining the Premium Listing of Grafton Units on the Official List of the United Kingdom Listing Authority ("UKLA Official List").

    A notice period of 20 business days, which commences today, is required to effect this change. A shareholder vote will not be required.

    The Company's listing on the Official List of the ISE will be cancelled pursuant to the ISE Listing Rules and trading of Grafton Units on the Main Securities Market of the ISE will cease, pursuant to the ISE Admission to Trading Rules, with effect from close of business on 15 October 2013. Grafton Units will continue to trade on the ISE in euro until 15 October 2013 and after this date Grafton Units will be traded solely on the London Stock Exchange (the "LSE") in Sterling.

    The FTSE Nationality Committee, which determines eligibility for the FTSE UK Index Series, is scheduled to meet on 12 November 2013 in advance of the FTSE quarterly review on 11 December 2013. Subject to the independent deliberations of the FTSE committees, and provided Grafton maintains the Premium Listing of the Grafton Units on the LSE, that those Units trade in Sterling and that they achieve adequate liquidity on the LSE, it is anticipated that Grafton would be included in the FTSE UK Index Series from the close of trading on 20 December 2013.

    The Board has also determined that the Group’s annual financial statements for the year ending 31 December 2013 will be presented in Sterling. Three quarters of the Group’s revenue has for some time been generated in the UK in Sterling. In the past, fluctuations in the Sterling/euro exchange rate have given rise to differences between reported results and constant currency results. The Board believes that this change will help to provide a clearer understanding of the Group’s financial performance by reflecting the functional currency of the majority of the Group’s operations, and that it will reduce the impact of currency movements on reported results.

    The Board intends that, from March 2014, dividends will be declared in Sterling. The Group will, however, continue to offer shareholders the option of receiving their dividends in either Sterling or euro. The Company’s share capital will remain denominated in euro and existing share certificates will remain valid.

    With effect from the 16 October 2013, the Company will also become subject to the shared jurisdiction of the UK Panel on Takeovers and Mergers and the Irish Takeover Panel and will therefore also adhere to the principles of the UK City Code on Takeovers and Mergers. The Company will continue to adhere to the principles of the UK Corporate Governance Code and the requirements on pre-emption rights and will remain subject to all of the super-equivalent regulatory obligations associated with its Premium Listing on the UKLA Official List. There will be no material effect on the shareholder rights and investor protections currently applicable to an investment in Grafton.

    Importantly, none of the changes that will be implemented will have any impact on the operations of Grafton Group plc which will remain headquartered, domiciled and tax resident in Ireland. The Group also remains fully committed to its Irish operations.

    The Board believes that the effects of the changes to be implemented should be to increase the Group’s profile and its suitability as an investment for UK and international investors and that they are therefore in the best long-term interests of the Group and its shareholders.

    Lazard & Co., Limited is acting as financial adviser to the Group in connection with the change of listing arrangements referred to in this announcement.

    Grafton Group Chief Executive Officer, Gavin Slark commented:

    "The development of Grafton Group has benefitted over almost half a century from its listing on the Irish Stock Exchange. The listing facilitated Grafton’s successful growth to the point where three quarters of the Group’s revenue and most of its development activity now takes place outside of Ireland.

    "The decision to move the listing responds to the new realities facing Grafton, including the significant changes in its shareholder base with the majority of the Group’s shares now held by institutional investors outside Ireland, and will provide the Group with the platform from which to grow the business even further."

    For further information please contact:
    Grafton Group plc (+353 1 2160600)  
    Gavin Slark, Chief Executive Officer  
    David Arnold, Chief Financial Officer  
    Murray Consultants (+353 1 4980300)  
    Joe Murray  
    MHP Communications (+44 20 3128 8756)  
    John Olsen  
    James White  

    2013 Interim Results

    Released: 28/08/2013

    Grafton Group Plc

    Grafton Group plc, the builders merchanting and DIY Group with operations in the UK, Ireland and Belgium, announces its results for the six months ended 30 June 2013.

     
    2013
    €'m
    Restated*
    2012
    €'m
     
     
    % change
    Revenue 1,072 1,055 +1.7
    Operating profit 68.4 24.5 +179.2
    Profit before tax 60.5 15.8 +283.9
    Profit after tax 47.7 11.2 +324.9
    Earnings per share - basic 20.6c 4.8c +325.0
    Before pension credit in 2013 and in the case of 2012
    before exceptional items & amortisation (Underlying)
    Operating profit 36.6 31.3 +17.1
    Profit before tax 28.7 22.5 +27.5
    Profit after tax 21.8 17.6 +23.8
    Earnings per share - basic 9.4c 7.6c +23.9
    Dividend 3.5c 3.0c +16.7
    Net debt 174.7 200.6 -

    *Restated as required by IFRS following the adoption of IAS 19 (Revised) 'Employee Benefits'.

    Financial Highlights

    • All three segments, Merchanting, Retailing and Manufacturing improved profitability
    • Cash generation from operations of €66.8 million - net debt reduced by €27.3 million
    • Shareholders' equity of €1 billion and gearing of 17% at end of June 2013
    • Improved financial flexibility with €135 million of new and refinanced debt

    Operating Highlights

    • More positive revenue trends developed in Merchanting business in the UK over the half year
    • Revenue in Merchanting business in Ireland stabilised and profitability improved
    • Retailing business in Ireland profitable following restructuring in 2012

    Gavin Slark, Chief Executive Officer commented:

    "The Group continues to make good progress following several years of challenging market conditions and the measures we have undertaken to reduce overheads, strengthen gross margins and improve profitability have provided the business with a strong platform from which to build. There are tangible signs of stability returning in our core markets with the recovery in the UK housing market providing a positive backdrop for the Group, although we feel it is prudent to assume that any recovery will be gradual and will involve its own challenges. However, regardless of the wider market conditions, we remain focused on driving further internal improvements in our existing businesses in order to maximise shareholder returns".

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Gavin Slark, Chief Executive Officer
    Colm Ó Nualláin, Finance Director

    Murray Consultants + 353 1 498 0300
    Joe Murray

    MHP Communications + 44 20 3128 8756
    John Olsen

    Conference Call

    Grafton will host a conference call for institutional investors and analysts at 8.30am (Irish Time) to discuss this announcement. The dial-in numbers are:

    Ireland: +353 1 436 4265
    UK: +44 208 817 9301
    US: +1 718 354 1226
    Other Countries: +353 1 436 4265

    A recording of the conference call will be available from 11.30am (Irish Time) on the 28 August 2013 for two months. The recording will be accessible at the following numbers:

    Ireland: +353 1 436 4267
    UK: +44 207 769 6425
    US: +1 630 652 3111
    Other: +353 1 436 4267

    The digital replay security code: 11579243£

    View the full 2013 Interims Results in PDF format.

    Trading Update

    Released: 10/07/2013

    Grafton Group plc, the builders merchanting and DIY Group with operations in the UK, Ireland and Belgium, issues this Trading Update for the Half Year Ended 30 June 2013.

    Revenue

    Revenue for the half year to 30 June 2013 was €1.07 billion which compares to revenue of €1.05 billion for the same period last year. The translation of UK revenue at a less favourable sterling/euro exchange rate relative to the prior year reduced Group turnover by €26 million. Trading in the half year was affected by adverse weather conditions in the first quarter and a recovery in activity levels in the second quarter.

    Merchanting Segment

    Average daily like for like sterling revenue in the UK Merchanting business, which contributed 74 per cent of Group turnover, was ahead of last year by 1.7 per cent with the benefit of stronger demand during May and June. Selco improved its coverage of the London market with the opening of branches in Wimbledon and Old Kent Road and Buildbase expanded into the North East region with the acquisition of a five branch merchanting business based in Sunderland.

    Revenue in the Irish merchanting branches showed signs of stabilising supported by internal initiatives. The business made competitive gains and grew revenues from its plumbing and heating branch implants and RMI products. In what was the first period of growth since the first half of 2007, average daily like for like revenue increased by 1.0 per cent.

    Retailing Segment

    Like for like revenue in the Irish Retailing business was flat in the half year. The fall in revenue in four months to the end of April, due principally to record low temperatures that delayed the start of the outdoor season, was fully recovered in May and June against the backdrop of a generally weak retail market.

    Operating Profit

    Half year operating profit will be in line with market expectations with the benefit of restructuring measures implemented last year.

    Appointment of Group Chief Financial Officer

    Following the announcement on 7 March 2013 relating to the retirement of Colm ó Nualláin, the Group is pleased to announce the appointment of David Arnold as Group Chief Financial Officer. David will be joining the Board and succeeding Colm with effect from 9 September 2013.

    David has previously been Group Finance Director of Enterprise plc and Redrow plc. Prior to that, he held senior financial positions in Six Continents plc and Tarmac plc.

    For further information please contact:
    Grafton Group plc (+353 1 2160600)  
    Gavin Slark, Chief Executive Officer  
    Colm ó Nualláin, Finance Director  
    Murray Consultants (+353 1 4980300)  
    Joe Murray  

    Appointment of Group Chief Financial Officer

    Released: 10/07/2013

    Following the announcement on 7 March 2013 relating to the retirement of Colm ó Nualláin, the Group is pleased to announce the appointment of David Arnold as Group Chief Financial Officer. David will be joining the Board and succeeding Colm with effect from 9 September 2013.

    Grafton Group Chief Executive, Gavin Slark commented:

    "I am delighted to welcome someone of David's ability and experience to the Group and look forward to working with him on the Group's continued development."

    David Arnold commented:

    "Grafton Group is an exciting, well respected and progressive business and I am thrilled to be joining Gavin and the team."

    About David Arnold:

    David (47) is a Fellow of the Chartered Institute of Management Accountants and of the Association of Corporate Treasurers. He has a degree in Banking and Finance from Loughborough University. He was Group Finance Director of Enterprise plc, the private equity backed support services company, from 2010 until its sale in April 2013. He was Group Finance Director of housebuilder Redrow plc from 2003 until 2010. Prior to this, David was Treasurer of the international leisure and hotels group, Six Continents plc and has held a number of senior financial positions at Tarmac plc, the building materials and construction company.

    The Company confirms that there are no disclosures required in respect of the appointment of Mr. Arnold pursuant to rule 6.6.7 of the Listing Rules.

    For further information please contact:
    Grafton Group plc (+353 1 2160600)  
    Gavin Slark, Chief Executive Officer  
    Murray Consultants (+353 1 4980300)  
    Joe Murray  

    Interim Management Statement

    Released: 14/05/2013

    Grafton Group plc, the builders merchanting and DIY Group with operations in the UK, Ireland and Belgium, issues this Interim Management Statement in advance of the Company’s Annual General Meeting to be held at 10.30 am today in the IMI Conference Centre, Sandyford Road, Dublin 16.

    Revenue
    Revenue for the four months to the end of April was €677 million which compares to revenue of €676 million for the same period last year. The translation of UK revenue at a less favourable sterling/euro exchange rate relative to the prior period reduced Group turnover by €12 million. Trading for the period was influenced by adverse weather conditions and continued economic weakness in the Group’s markets.

    Merchanting Segment
    Average daily like for like sterling revenue in the UK Merchanting business, which contributed 74 per cent of Group turnover, was marginally higher for the four months. Weather conditions reduced volumes in March but activity levels recovered during April.

    The Irish merchanting business increased like for like revenue by 1.0 per cent, an encouraging development and the first period since the first half of 2007 to record turnover growth. The business benefitted from an improvement in its competitive position and from increased turnover of plumbing and heating products and promotional campaigns.

    Retailing Segment
    Like for like revenue in the Irish Retailing business declined by 8.7 per cent due to a softening of demand caused by weakness in consumer sentiment and record low temperatures in March and early April which delayed the start of the outdoor season.

    Operating Profit
    Operating profit for the four months was marginally ahead of the prior year despite a continuation of below normal activity levels in the UK Merchanting market and the difficult macro-economic environment in Ireland.

    Outlook
    While turnover growth in the first two weeks of May has seen some improvement, the Group remains cautious about the near term outlook for its businesses and is looking to a continuing reliance on internal initiatives to improve profitability.

    For further information please contact:

    Grafton Group plc (+353 1 2160600)
    Gavin Slark, Chief Executive Officer
    Colm ó Nualláin, Finance Director
    Murray Consultants (+353 1 4980300)
    Joe Murray

    Appointment of Non-Executive Director

    Released: 14/05/2013

    The Board of Grafton Group plc is pleased to announce the appointment of Mr. Frank van Zanten as a Non-Executive Director on 13th May 2013.

    Mr. van Zanten (46), who is a Dutch national and resident, is Managing Director of the Continental Europe business area of Bunzl plc, the FTSE 100 UK international distribution and outsourcing Group with operations across the Americas, Europe and Australasia. He was previously Chief Executive of PontMeyer N.V., the Dutch Builders Merchants. Mr. van Zanten has extensive pan European business experience in the distribution sector. He holds an MBA degree from Rotterdam School of Management.

    The Company confirms that there are no disclosures required in respect of the appointment of Mr. van Zanten pursuant to rule 6.6.7 of the Listing Rules.

    For further information please contact:

    Grafton Group plc (+353 1 2160600)
    Gavin Slark, Chief Executive Officer
    Charles Rinn, Company Secretary
    Murray Consultants (+353 1 4980300)
    Joe Murray

    Acquisition of Thompsons Merchanting Business in England

    Released: 27/03/2013

    Grafton Group plc, the builders merchanting and DIY Group with operations in the UK, Ireland and Belgium, announces that it has acquired the trade and selected assets of Thompson Building Centres and Thompson Associated Plumbing Supplies (TAPS).

    This acquisition extends geographic coverage of the Group's UK merchanting business to the North East of England where the acquired business trades from five builders merchanting branches located in Sunderland, Newcastle, Durham, Gateshead and South Shields. The acquired business also incorporates five plumbing and heating branches. Four of the plumbing and heating branches trade from properties shared with builders merchanting branches and one from a stand-alone site in Birtley. The Sunderland based Thompsons business was founded 60 years ago and developed a strong position in the North East merchanting market. Thompsons was placed into administration earlier this month.

    The acquired branches turned over circa €20 million in 2012. The total purchase consideration of €3.8 million was satisfied in cash and relates to the purchase of five freehold properties and stock.

    For further information please contact:

    Grafton Group plc (+353 1 2160600)
    Gavin Slark, Chief Executive Officer
    Colm ó Nualláin, Finance Director
    Murray Consultants (+353 1 4980300)
    Joe Murray

    2012 Final Results

    Released: 07/03/2013

    The Preliminary Results for 2012 announced on 7 March 2013.

    Financial Highlights

    • Revenue up 6% to €2.2 billion and by 0.6% in constant currency
    • Underlying operating profit up 33% to €72.9 million from €54.7 million (€75.2 million before amortisation from €56.9 million)
    • Group operating profit margin increased by 70 basis points to 3.5% from 2.8%
    • Underlying profit before taxation up 41% to €59.7 million from €42.3 million ( €61.9 million before amortisation from €44.5 million)
    • Underlying adjusted basic earnings per share up 27% to 19.5 cent
    • Dividend up by 13% for the year to 8.5 cent including second interim dividend of 5.5 cent
    • Strong cash generation from operations of €106 million
    • Shareholders’ equity of €1 billion and year end gearing of 20%

    Operating Highlights

    • Profit increase driven by UK merchanting outperformance in weak market
    • UK merchanting operating profit margin increased by 75 basis points to 4.85%
    • Cost reductions offset impact of Ireland merchanting revenue decline
    • Second half profit recovery in retailing business in Ireland
    • Manufacturing business returned to profit following restructuring
    • All three divisions of Group profitable
    2012
    £'m
    2011
    £'m
    Revenue 2,171 2,054
    Underlying (before exceptional items):    
    Operating profit* 72.9 54.7
    EBITDA 114.7 97.4
    Profit before tax* 59.7 42.3
    Profit after tax* 43.3 33.7
    Adjusted basic earnings per share 19.5c 15.4c
    Statutory:    
    Operating profit 46.8 22.7
    Profit before tax 33.5 10.3
    Profit after tax 41.1 2.5
    Earnings per share – basic 17.7c 1.1c
    Dividend for year 8.5c 7.5c
    * Includes an intangible amortisation charge of €2.24 million (2011: €2.2 million).

    Gavin Slark, Chief Executive Officer commented:

    "The self-help measures implemented over the last two years have enabled Grafton to make significant progress in very challenging conditions. We remain cautious on the near term outlook due to the uncertainties in the economies and markets in which we operate. We expect to make further progress in the year ahead by focusing on a new phase of measures to improve profitability."

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Gavin Slark, Chief Executive Officer
    Colm Ó Nualláin, Finance Director

    Murray Consultants + 353 1 498 0300
    Joe Murray

    Conference Call
    Grafton will host an Analysts' conference call today at 8.30am (Irish Time) to discuss this announcement. The dial-in numbers are:

    Ireland: + 353 1 436 4265
    UK: + 44 208 817 9301
    US: +1 718 354 1226
    Other Countries: +353 1 436 4265

    View the full 2012 Final Results announcement in PDF format.

    Trading Statement

    Released: 09/01/2013

    Grafton Group plc, the builders merchanting and DIY Group with operations in the UK, Ireland and Belgium, issues this Trading Statement for the year ended 31 December 2012.

    Revenue
    Revenue for 2012 was c. €2.17 billion, an increase of 5.8 per cent from €2.05 billion for 2011. Trading ended the year on a stronger note with above trend growth in average daily UK like-for-like Merchanting turnover in the November/December period and a moderation in the rate of decline in Irish Merchanting and Retailing turnover. The revenue outturn for the year includes a positive currency impact of c. €105 million due to the translation of UK revenue at a more favourable average sterling/euro exchange rate compared to the average rate for 2011.

    Merchanting Segment
    UK Merchanting sterling turnover increased by 3.1 per cent in the year.  Average daily like for like sterling turnover increased by 1.7 per cent including growth of 3.7 per cent in the November/December period.

    Irish Merchanting turnover declined by 8.5 per cent for the year.  The rate of decline in average daily turnover eased to 2.7 per cent in the November/December period.

    Retailing Segment
    Turnover in the Irish Retailing business declined by 9.2 per cent for the year and by half this rate for the November/December period.

    Operating Profit
    It is anticipated that operating profit (before restructuring costs and amortisation of intangibles) for 2012 will exceed market expectations and be not less than €70 million (2011: €56.9 million).  The anticipated operating profit outcome reflects an improvement in trading in the final months of the year and the benefit of a relentless emphasis on improving performance through self-help measures against the backdrop of difficult market conditions.

    Outlook

    The immediate outlook for demand in the Group's markets remains challenging and the timing and extent of any recovery is unclear. There will be a continued focus in 2013 on operational initiatives to improve profitability. These measures together with a portfolio of highly cash generative businesses and a strong balance sheet leave the Group well placed to benefit from a market recovery and provide the resources to invest in suitable development opportunities.

    The Preliminary Results for 2012 are expected to be announced on 7 March 2013.


    For further information please contact:
    Grafton Group plc (+353 1 2160600) Murray Consultants (+353 1 4980300)

    Gavin Slark, Chief Executive Officer
    Colm ó Nualláin, Finance Director

    Joe Murray
     
  • Date Title
    06 November 2012 Interim Management Statement
    01 November 2012 Acquisition by Belgian Joint Venture
    29 August 2012 2012 Interim Results
    11 July 2012 Trading Update
    06 June 2012 Atlantic Home Care Limited
    10 May 2012 Interim Management Statement
    07 March 2012 2011 Final Results
    11 January 2012 Trading Update

    Interim Management Statement

    Released: 06/11/2012

    Grafton Group Plc

    Interim Management Statement

    Grafton Group plc, the builders merchanting and DIY Group with operations in the UK, Ireland and Belgium, issues the following Interim Management Statement for the period ending 31 October 2012.

    Group Revenue

    Group revenue for the ten months to 31 October 2012 was €1.83 billion, up from €1.73 billion in the same period last year. The translation of sterling revenue, which accounted for 76 per cent of Group revenue, at a more favourable exchange rate to the euro contributed to the increase in revenue for the period.

    Merchanting Segment

    UK Merchanting sterling turnover increased by 3.6 per cent in the ten months to October 2012. Trading in September and October saw average daily like for like sterling turnover up by 2.0 per cent compared to a flat outcome for July and August. Average daily like for like growth of 1.0 per cent in the period from July to October compared to growth of 1.4 per cent in the first half.

    Irish Merchanting turnover declined by 8.7 per cent in the ten months, a rate consistent with the half year. Trading in September and October benefitted from a strong performance by the plumbing and heating division and promotional activity.

    Retailing Segment

    Turnover in the Irish Retailing business declined by 10.1 per cent in the year to October. The rate of decline eased in the July to October period to 6.5 per cent from 12.4 per cent in the first half when demand for seasonal products was as expected less affected by adverse weather conditions.

    Operating Profit

    The Group is on course to report full year operating profit (before restructuring and amortisation) at the higher end of market expectations. Increased operating profit was achieved in the ten months to October, despite difficult markets, through a disciplined focus on self-help measures.

    Financial Position

    The Group maintained its healthy financial position with strong cash generation from operations and good liquidity providing the resources to invest in strategically important development opportunities.

    Strong market positions and a low cost base give the Group a good platform to improve profitability as markets recover from cyclical lows.

    For further information please contact:
    Grafton Group plc (+353 1 2160600) Murray Consultants (+353 1 4980300)
    Gavin Slark, Chief Executive Officer
    Colm Nuallin, Finance Director
    Joe Murray

    Acquisition by Belgian Joint Venture

    Released: 01/11/2012

    Grafton Group Plc

    Acquisition by Belgian Joint Venture

    Grafton Group plc announces that the Group's Belgian joint venture merchanting business, (the "Joint Venture"), has acquired Holvoet, a two branch heavyside builders merchanting business based in Avelgem, South West Belgium.

    Holvoet turned over €16.6 million in its last financial year and the profit before tax attributable to the acquired business was €1.2 million. Subject to the finalisation of completion accounts, the total purchase consideration, to be satisfied in cash, is estimated at circa €9.5 million net of cash assumed at closing. The value of the gross assets was €7.4 million.

    As a consequence of the acquisition, the Grafton shareholding in the Joint Venture has increased to 65.3%. The acquisition of Holvoet strengthens the position of the Joint Venture in the Belgium merchanting market, provides a good platform for further growth and increases its exposure to the residential repair, maintenance and improvement (RMI) and new build markets. The acquisition increases the annualised turnover of the Joint Venture to circa €75 million and the number of Belgian branches to 11.

    Grafton Group is an independent company operating in the Merchanting, DIY retailing and Mortar Manufacturing markets in Britain, Ireland and Belgium.

    For further information please contact:
    Grafton Group plc (+353 1 2160600) Murray Consultants (+353 1 4980300)
    Gavin Slark, Chief Executive Officer
    Colm Nuallin, Finance Director
    Joe Murray

    2012 Interim Results

    Released: 29/08/2012

    Grafton Group Plc

    Interim Results For The Six Months Ended 30 June 2012

    Highlights:

    • Revenue up 4.6% to €1.05 billion
    • Underlying operating profit up 19.3% to €31.3 million
    • Underlying profit before taxation up 18.1% to €23.8 million
    • Adjusted basic earnings per share up 11.6% to 8.1 cent
    • Strong cash flow from operations of €54.8 million
    • UK business accounts for 76% of revenue
    2012
    €'m
    2011
    €'m
    Revenue 1,055 1,008
    Underlying (before exceptional items and amortisation):
    Operating profit 31.3 26.2
    Profit before tax 23.8 20.2
    Profit after tax 18.7 16.7
    Adjusted basic earnings per share 8.1c 7.2c
    Statutory:
    Operating profit 24.5 21.1
    Profit before tax 17.1 15.1
    Profit after tax 12.2 12.4
    Earnings per share – basic 5.3c 5.4c
    Dividend 3.0c 2.75c
    Net debt 200.6 245.8

    Gavin Slark, Chief Executive Officer commented:
    "The Group continues to make good progress in markets that remain challenging and the outlook is still uncertain. The focus on self-help will continue to be at the forefront of our activities and the Group remains in a financially robust state."

    Conference Call

    Grafton will host an Analysts' conference call today at 8.30am (Irish Time) to discuss this announcement. The dial-in numbers are:

    Ireland: +353 1 436 4265
    UK: +44 208 817 9301
    US: +1 718 354 1226
    Other Countries: +353 1 436 4265

    A replay of the conference call will be available from 11.30am (Irish Time). To access the recording, the dial-in numbers are:

    Ireland: +353 1 436 4267
    UK: +44 207 769 6425
    US: +1 630 652 3111
    Other Countries: +353 1 436 4267

    The digital replay security code is: 7996472#

    View the full 2012 Interim Results in PDF format.

    Trading Update

    Released: Trading Update

    Grafton Group plc, the builders merchants and DIY Group with operations in the UK, Ireland and Belgium, issues the following Trading Update for the Half Year ended 30 June 2012.

    Revenue
    Group turnover for the half year to 30 June 2012 was €1.05 billion, an increase of 4 per cent on turnover of €1.01 billion in the first half of 2011. The translation of sterling turnover at a more favourable exchange rate against the euro contributed to the increase in turnover.

    Merchanting
    Average daily like for like turnover in the UK Merchanting business, which accounted for 74 per cent of Group turnover, increased by 1.4 per cent in the half year. The business delivered a good improvement in turnover in the first quarter. Trading conditions in the second quarter were adversely affected by unseasonal weather with record levels of rainfall from April to June in the UK. Self-help measures contributed to an improved performance in Buildbase and Plumbase. Selco continued to develop its market position and Macnaughton Blair experienced a recovery in volumes in its general merchanting business. The specialist indoor construction products business that supplies the residential new build market and the bathroom distribution business performed strongly.

    Turnover in the Irish Merchanting business was down by circa 9 per cent due to a further decline in spending on housing RMI. Average daily turnover in the overall business, including the effect of branch consolidations, declined by 13 per cent in January and February and at half that rate over the March to June period in what continues to be a challenging market. The impact on performance of lower turnover was mainly offset by cost reductions.

    Retailing
    Turnover in the Irish Retailing business was down by circa 12.5 per cent. Adverse weather conditions in April and June contributed to significantly reduced demand for gardening products and trading was also affected by weak consumer spending due to pressure on disposable incomes.

    The Group's operating performance was satisfactory in demanding market conditions primarily as a result of internal initiatives against the backdrop of cyclically low levels of activity in its markets. Results for the half year (before rationalisation costs) will be in line with expectations.

    Interim 2012 Results
    The Group will report Interim Results for the six months ending 30 June 2012 on Wednesday, 29 August 2012.


    For further information please contact:
    Grafton Group plc (+353 1 2160600) Murray Consultants (+353 1 4980300)
    Gavin Slark, Chief Executive Officer Joe Murray

    Atlantic Home Care Limited

    Released: 06/06/2012

    Atlantic Home Care Ltd ("Atlantic or the Company"), a wholly owned subsidiary of Grafton Group plc ("the Group"), has today filed a petition seeking the appointment of an examiner and Atlantic now has Court protection. Under Irish law, an Examinership process is designed to facilitate the survival of a company through the formulation of proposals by the Examiner of a compromise scheme of arrangement.

    Atlantic is a member of the DIY Division of the Group operating in Ireland and was acquired as part of the Heiton Group in 2005. The business has been severely impacted by the recession, in particular by the decline in consumer spending and in the housing sector. In addition, the Company's ability to reduce operating costs has been inhibited by the retention of "upward only" rent reviews for existing leases.

    Atlantic accounts for 2.75 per cent of Group revenue and has traded at a loss since 2007. The turnover of Atlantic has fallen by 44 per cent from €100m to €56m in that period and it continues to trade at a loss in the current year. The DIY Division as a whole has traded successfully and profitably in a demanding retail environment throughout this period but its performance has been held back by the Atlantic losses. These losses are no longer sustainable and a restructuring of Atlantic via the Examinership is intended to bring these to an end while maximising the potential for the business to survive.

    An Independent Accountants' Report from KPMG on Atlantic has concluded that it is possible for a sustainable and profitable business to emerge from the Examinership process based on a restructuring of the Company. Subject to the views of the Examiner, the restructuring may involve closure of at least five stores and is subject to agreement being reached with landlords on adjusting rents to current open market levels. Woodie's DIY Ltd is prepared to continue supporting Atlantic throughout the Examinership and has also indicated that it would be prepared to invest in the Company to facilitate a scheme of arrangement for the restructured business.

    Atlantic has no bank debt and is not part of the Group's financing arrangements and accordingly, this development will have no impact on financing and trading arrangements in the Group and its other subsidiary companies in Ireland, the UK and Belgium.

    ENDS Wednesday, June 6th, 2012
    For further information please contact:  
    Grafton Group plc (+353 1 2160600)
    Gavin Slark, Chief Executive Officer
    Colm Ó Nualláin, Finance Director
    Murray Consultants (+353 1 4980300)
    Joe Murray

    Interim Management Statement

    Released: 10/05/2012

    Grafton Group plc, the builders merchants and DIY Group with operations across the UK and Ireland issues the following Interim Management Statement in advance of the Company's Annual General Meeting to be held at 10.30am today in the IMI Conference Centre, Sandyford Road, Dublin 16.

    Revenue
    Group turnover for the four months to 30 April 2012 was €676 million, an increase of 5.3 per cent on turnover of €642 million in the first four months of 2011. The translation of sterling turnover at a more favourable exchange rate against the euro and the inclusion of the Group's share of turnover in the Belgian Joint Venture contributed to the increase in turnover for the period.

    UK
    Average daily like for like turnover in the UK Merchanting business, which accounted for 74 per cent of Group turnover, increased by 1.7 per cent. UK Merchanting turnover showed a good improvement in the first quarter. This trend moderated in April due to the record levels of rainfall. Overall market conditions remained stable despite more broadly based economic weakness. The Selco, Plumbase and specialists merchanting businesses performed most strongly in the period.

    Ireland
    Turnover in the Irish Merchanting business was down by 9.0 per cent due to a further decline in spending on housing RMI. The impact on profit of lower turnover was offset by cost reductions. Turnover in the Irish Retailing business was down by 16.0 per cent. April trading in the DIY business was affected by adverse weather conditions which delayed spending on gardening and seasonal products compared to the strong trading levels in April 2011 which benefitted from very favourable weather conditions.

    Operating Profit
    Operating profit for the four months was ahead of the prior year despite subdued volumes in the UK and a difficult macro-economic environment in Ireland. The positive operating profit performance for the period reflected the benefit of self-help initiatives. The Group expects its performance for the full year to be in line with market expectations.

    Interim 2012 Results
    The Group will report Interim Results for the six months ending 30 June 2012 on Wednesday, 29 August 2012.

    Ends  
    For further information please contact:
    Grafton Group plc + 353 1 216 0600 Murray Consultants + 353 1 498 0300
    Gavin Slark, Chief Executive Officer Joe Murray
    Colm Ó Nualláin, Finance Director

    2011 Final Results

    Released: 07/03/2012

    HIGHLIGHTS

    • Revenue up 3% to €2.05 billion
    • Underlying operating profit up 13% to £54.7 million and £56.9 million excluding amortisation
    • Underlying profit before taxation up 3% to £42.3 million
    • Underlying adjusted basic earnings per share of 15.4 cent
    • Strong cash flow from operations of £96.9 million
    • Dividend per unit up by 7% to 7.5 cent including second interim dividend of 4.75 cent
    • Like for like turnover growth of 4.3% in the UK merchanting business
    • UK revenue and profits increase
    • Significant action taken on restructuring
    2011
    £'m
    2010
    £'m
    Revenue 2,054 2,004
    Underlying (before exceptional items):    
    Operating profit* 54.7 48.4
    Profit before tax* 42.3 40.9
    Profit after tax* 33.7 79.4
    Adjusted basic earnings per share 15.4c 18.5
    Statutory:    
    Operating profit 22.7 33.0
    Profit before tax 10.3 25.6
    Profit after tax 2.5 64.0
    Earnings per share – basic 1.1c 27.7c
    Dividend for year 7.5c 7.0c
    * Includes an intangible amortisation charge of £2.2 million (2010: £2.2 million)

    Gavin Slark, Chief Executive Officer commented:

    "The turnaround in performance that commenced in 2010 continued in 2011 in challenging markets with savings realised from cost reduction programmes. The Group is well positioned to make further progress in what we believe will be subdued markets in 2012. We will continue to focus on margin enhancement, cost management and cash generation and evaluate value adding expansion opportunities."

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Gavin Slark, Chief Executive Officer
    Colm Ó Nualláin, Finance Director

    Murray Consultants + 353 1 498 0300
    Joe Murray

    Conference Call
    Grafton will host an Analysts' conference call today at 8.30am (Irish Time) to discuss this announcement. The dial-in numbers are:

    Ireland: + 353 1 436 4265
    UK: + 44 208 817 9301
    US: +1 718 354 1226
    Other Countries: +353 1 436 4265

    View the full 2011 Final Results announcement in PDF format.

    Trading Update

    Released: 11/01/2012

    Grafton Group plc, the builders merchanting and DIY retailer, with operations across the UK and Ireland, issues this trading update for the year ended 31 December 2011.

    Group turnover for 2011 was c. €2.05 billion, an increase of 2.5 per cent from €2 billion in 2010. Trading conditions in the Group's markets were difficult during 2011 but there was a firmer tone to turnover in the final two months of the year which benefited from more favourable weather conditions compared to the same period in 2010.

    The UK business, accounting for over 70 per cent of Group turnover, benefited from generally stable market conditions and a high exposure to the residential repair maintenance and improvement (RMI) market. Average daily like for like UK sterling turnover increased by c. 4.5 per cent for the year compared to an increase of 4.0 per cent in the ten months to October 2011. In Ireland, the weaker economy contributed to a fall in Irish Merchanting turnover in 2011 of 6.4 per cent compared to a decline of 7.7 per cent in the ten months to October 2011. Transaction levels held up well in the Irish Retailing business but lower spending on higher value products reduced turnover by c. 4.7 per cent in the year compared to a decline of 5.7 per cent in the ten months to October 2011. Average daily like for like UK sterling turnover increased by 7.0 per cent in November and December and turnover in the Irish business was marginally ahead in the same period.

    The Group expects 2011 operating profit (before restructuring costs, a provision for onerous leases and amortisation costs) to be at the upper end of the €52 to €55 million range guided in the Interim Management Update issued on 9 November 2011.

    The Group continued in recent months to implement restructuring and cost reduction measures in response to the sharp decline in its markets in recent years which resulted in excess capacity in its merchanting network and manufacturing businesses. The significant cost savings achieved have contributed to partially offsetting the impact on profitability of the decline in volumes. The restructuring charge to the Income Statement for 2011 is estimated at c. €13 million with an incremental benefit of €6 million in 2012. The cost savings in 2011 and prior years will continue to generate operating efficiencies as market conditions improve.

    In view of the decision by the Irish Government not to proceed with the legislation to end upward-only rent reviews for existing leases, the Group will, in accordance with International Financial Reporting Standards, recognise a non-cash provision of c. €19 million principally in respect of a small number of onerous leases in the Irish Retailing business.

    In October the Group extended the maturity profile of its net debt out to 2016 and ended the year in a strong financial position with modest gearing.

    The Group's strategically important market positions, strongly cash generative businesses and reduced cost base provide a very good platform to benefit from a cyclical recovery in its markets and the resources to invest in appropriate development opportunities.

    Ends 11 January 2012

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Gavin Slark, Chief Executive Officer
    Colm Nuallin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
  • Date Title
    09 November 2011 Interim Management Statement
    31 August 2011 2011 Interim Results
    08 July 2011 Trading Update for the six months ended 30 June 2011
    01 July 2011 Board Changes
    04 May 2011 Interim Management Statement
    03 March 2011 2010 Final Results
    02 February 2011 Grafton appoints Group Chief Executive
    07 January 2011 Trading Update

    Interim Management Statement

    Released: 09/11/2011

    Grafton Group plc, the builders merchanting and DIY Group with operations across the UK and Ireland, issues this management statement for the period ending 8 November 2011.

    Group turnover for the ten months to 31 October 2011 was €1.73 billion compared to €1.70 billion in the same period last year.

    The UK business, which accounts for over 70 per cent of Group turnover, increased sterling turnover by 4.8 per cent in the ten months compared to the same period last year and growth of 5.0 per cent in first half. Average daily UK like for like sterling turnover increased by 4.0 per cent in the ten month period but moderated to 2.0 per cent in September and October. This compares to growth of 4.7 per cent in the first half.

    Irish Merchanting turnover declined by 7.7 per cent in the ten months which compares to a decline of 7.2 per cent in the half year.

    Turnover in the Irish Retailing business declined by 5.7 per cent in the period to October compared to a decline of 4.6 per cent in the first half. Turnover in the Manufacturing segment increased by 6.4 per cent in the ten months to October relative to growth of 6.5 per cent in the first half.

    Uncertainty on the economy, low consumer confidence and tight lending conditions continue to limit growth in RMI volumes in the UK market. In Ireland, the economic environment is likely to make trading conditions challenging for some time ahead.

    The Belgian joint venture completed its third bolt on acquisition this year, bringing the Belgian annualised turnover to circa €55 million. Selco's programme of new store development in the UK continued with a second store opened in Slough during September.

    Following the completion of the successful refinancing the Group now has €388 million of bank facilities which have an average maturity profile of more than 4 years. When combined with the US Private Placement loan notes this leaves Grafton in a strong financial position.

    Due to the further delay in recovery in our sector and the resultant lower operational leverage, the Group expects full year operating profit before restructuring and amortisation costs to be in the range of €52 to €55 million (2010: €50.6 million). The Board remains confident of achieving further improvement in profitability going forward.

    Ends 9 November 2011

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Gavin Slark, Chief Executive Officer
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray

    2011 Interim Results

    Released: 31/08/2011

    Financial Highlights

    Grafton Group plc announces its interim results for the six months ended 30 June 2011.

    2011 2010 Change
    Revenue €1,008 m €979 m +3%
    Adjusted operating profit* €26.2 m €18.7 m +40%
    Operating profit per income statement €21.1 m €14.8 m +43%
    Profit before tax €15.1 m €13.4 m +13%
    Profit after tax €12.4 m €12.9 m -4%
    EBITDA (before restructuring costs) €47.3 m €40.9 m +16%
    Adjusted earnings per share* 7.2 c 7.0 c +3%
    Basic earnings per share 5.4 c 5.6 c -4%
    Dividend 2.75c 2.5 c +10%
    Net debt €245.8 m €281.0 m
    Gearing 26% 29%
    * Before intangible amortisation €1.1m (2010: €1.1m) and restructuring costs €4.0m (2010: €2.9m)

    Highlights:

    • Merchanting operating profit increased by 22% to €33.4m
    • UK turnover and profits increase
    • UK operating margin improved to 4.5%
    • Cost reductions improve returns in weak Irish market

    Financial:

    • Strong cash flow from operations of €48.6m reduces gearing to 26%
    • Renewed investment in asset replacement and development expenditure
    • Further reduction in debt
    • Agreement in principle to extend maturity profile of net debt to five years

    Commenting on the outlook, Gavin Slark, Chief Executive Officer said:

    "The Group is well placed to deal with the continued difficult trading conditions in our core markets. A number of self help initiatives have been identified that will enable us to improve our performance in margins, costs control and cash generation. This leaves us in a strong position to take advantage of any economic upturn or expansion opportunities."

    Conference Call

    Grafton will host an Analysts' conference call today at 8.30am (Irish Time) to discuss this announcement. The dial-in numbers are:

    Ireland: +353 1 436 4265
    UK: +44 208 817 9301
    US: +1 718 354 1226
    Other Countries: +353 1 436 4265

    A replay of the conference call will be available from 11.30am (Irish Time). To access the recording, the dial-in numbers are:

    Ireland: +353 1 436 4267
    UK: +44 207 769 6425
    US: +1 630 652 3111
    Other Countries: +353 1 436 4267

    The digital replay security code is: 5390987#

    View the full 2011 Interim Results in PDF format.

    Trading Update for the six months ended 30 June 2011

    Released: 08/07/2011

    Grafton Group plc, the builders merchants and DIY Group with operations in the UK and Ireland, issues this trading update for the six months ended 30 June 2011.

    Group turnover for the half year was circa €997 million, compared to €979 million in the first half of 2010. Turnover in the early months of the year benefitted from more favourable weather conditions than in the same period last year and the rate of growth moderated in the second quarter.

    UK average daily like for like sterling turnover increased by circa 4.7 per cent. Demand was resilient in the RMI-focused UK merchanting business against the background of pressure on disposable incomes and consumer spending.

    Irish turnover for the half year was down by circa 6 per cent and was impacted by challenging trading conditions in the Merchanting and DIY markets. Spending on housing RMI and DIY was lower due to general weakness in the economy, reflecting a decline in incomes and contraction in employment levels.

    The trading environment in the Group's key markets is proving slow to recover to more normal conditions in light of the continuation of weak mortgage lending and low levels of consumer confidence. However, the Group continues to significantly improve its trading performance from the historically low levels of the recession.


    Ends 8 July 2011

    For further information please contact:
    Grafton Group plc + 353 1 216 0600
    Gavin Slark, Chief Executive Officer
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300

    Board Changes

    Released: 01/07/2011

    Grafton Group plc, the builders merchants and DIY Group with operations in the UK and Ireland, confirms that the Board changes announced in February 2011 will take effect from today 1 July 2011.

    Mr. Gavin Slark becomes Chief Executive Officer and succeeds Mr. Chadwick in managing the Group. Mr. Chadwick will continue as Chairman of the Board in a non-executive capacity.

    Ends 1 July 2011

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Chairman
    Gavin Slark, Chief Executive Officer
    Murray Consultants + 353 1 498 0300
    Joe Murray

    Interim Management Statement

    Released: 04/05/2011

    Grafton Group plc, the builders merchants and DIY Group with operations across the UK and Ireland, issues the following Interim Management Statement in advance of the Company's Annual General Meeting to be held at 10.30am today in the IMI Conference Centre, Sandyford Road, Dublin 16.

    Group turnover for the four months to 30 April 2011 was €642 million, an increase of 4.0 per cent compared to the corresponding period last year. Average daily UK like for like sterling turnover increased by 5.8 per cent. The rate of decline in turnover in Ireland moderated to 2.6 per cent which included growth of 4.6 per cent in the Irish Retailing business.

    The recovery in the mainly residential RMI orientated UK business, that now accounts for over 70 per cent of Group turnover, continued through the period against a background of some uncertainty in consumer confidence. Trading conditions in Ireland were challenging due to weak demand in the residential RMI market and low levels of activity in the new build markets.

    The increase in turnover and lower cost base as a result of the rationalisation measures adopted in recent years resulted in an improved Group operating performance in the period.

    A Belgian builders merchanting business, in which the Group has a 49 per cent interest since January 2009, traded successfully and grew by acquisition during the period increasing its annualised turnover to circa €40 million.

    The Group's strong businesses and financial position leave it well placed to benefit from a recovery in its markets.

    Ends 4th May 2011
     

    For further information please contact:
     
    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    2010 Final Results

    Released: 03/03/2011

    Financial Highlights

    Grafton Group plc announces its final results for the twelve months ended 31 December 2010.

    2010 2009 Change
    Revenue €2.00bn €1.98bn +1%
    Adjusted operating profit* €50.6m €26.2m +93%
    Operating profit per income statement €33.0m €4.9m
    Profit before tax €25.6m €13.6m +88%
    Profit after tax €64.0m €13.4m
    Free cash flow €95m €171m
    EBITDA €95.1m €74.1m
    Adjusted earnings per share** 18.5c 5.4c +246%
    Basic earnings per share 27.7c 5.8c
    Dividend / 'A' ordinary share purchase 7.0c 5.0c +40%
    Net debt €255m €322m
    Gearing 26% 35%
    * Before intangible amortisation €2.2m (2009:€2.2m), impairment €10.0m (2009: €5.5m) and restructuring costs €5.3m (2009: €13.6m net)
    ** Before intangible amortisation, impairment, restructuring costs, taxation credit in 2010 and investment profit in 2009

    Highlights:

    • Strong financial position and confidence in the future
    • Emerging from the downturn with strong market positions
    • Merchanting operating profit increased 57% to €61.5m
    • Improved market conditions increase UK turnover and profits
    • Return to profit at Irish merchanting as turnover trended towards stabilisation
    • DIY remains profitable on reduced turnover

    Financial:

    • Cost savings and restructuring reduces overheads by a further €27.4m
    • Year end net debt €67.4m lower at €255.1m and gearing reduced to 26%
    • Debt refinancing completed with new three year facility

    Commenting on the outlook, Michael Chadwick, Executive Chairman said:
    "The Group's strong financial position and lower cost base leave it well placed to benefit from improvements in its markets. The UK economy appears to be in a modest growth phase and activity in our sector has recovered from historically low levels. The outlook for Ireland remains unpredictable. Group turnover for the first two months of 2011 is encouraging with a continuation of like for like sales growth in the UK and signs of stabilisation in Irish turnover. We expect further improvement in profit as markets recover."

    View the full 2010 Final Results announcement in PDF format.

    Grafton appoints Group Chief Executive

    Released: 02/02/2011

    Grafton Group plc announces the appointment of Gavin Slark as Group Chief Executive (CEO) to succeed Michael Chadwick in managing the Group. Mr. Slark will join the Group and the Board as Chief Executive Designate on April 1st, 2011 and will be appointed CEO on July 1st. He was previously Group Chief Executive of BSS Group plc, a leading UK distributor to specialist trades including the plumbing, heating and construction sectors.

    Michael Chadwick will continue as Chairman of the Board in a non-executive capacity from July. He has been Executive Chairman of Grafton since 1985 and some time ago advised the Board of his intention to retire as an executive on completion of the search for a successor. On behalf of the Board, Roderick Ryan, Senior Independent Director, paid tribute to Mr. Chadwick for his outstanding contribution to the Group.

    Leo Martin, Executive Director and Chief Operating Officer, has also advised the Board of his intention to retire at the end of the year. He was due to retire in August on reaching the age of 60 but has agreed to extend his contract until December to enable him to familiarise Mr. Slark with the Group's operations, particularly in Ireland. Mr. Martin joined Grafton when it acquired Heiton Group plc in 2005.

    Mr. Slark (45) was appointed Group Chief Executive of BSS in 2006 following periods as Chief Operating Officer and Managing Director of BSS's largest operating division, PTS Plumbing Trade Supplies. He developed BSS into a leading UK force in its sector, opening in excess of 160 new outlets and completing several strategic acquisitions. He maintained revenue growth throughout the recession, strong profitability and cash generation, while maintaining or increasing the dividend. In late 2010 BSS was acquired by Travis Perkins.

    Commenting on the appointment, Michael Chadwick, Executive Chairman said: "We are very pleased to appoint a Group Chief Executive of the calibre of Gavin Slark. He has a depth of experience and proven track record as a CEO in our sector. He has indicated that his priority will be to keep Grafton focused on meeting the challenge of an uncertain economic climate while positioning the Group for future growth. His experience complements that of our existing strong management team and I look forward to working with him in the continued development of the Group."

    "We will be losing the valuable service of Leo Martin at the end of the year following his decision to retire. Leo has made a major contribution to the Group. His expertise has been a key element in the successful integration of the Heiton operations with those of Grafton. In addition his role in directing Grafton's merchanting operations across both Ireland and the UK has been central to the Group's ability to manage its affairs throughout the current severe recession. We are pleased that he has agreed to continue to be available to the Group after his retirement in an advisory capacity."

    Roderick Ryan, Senior Independent Director, said: "Michael Chadwick's record has been outstanding by any standards. When he was appointed Executive Chairman in 1985, the Group was a subsidiary of a multinational with sales of less than €60m, had negligible EPS and a share price the equivalent of 7 cent. Under his leadership Grafton has become a leading Irish quoted company, the market leader in its sector and has grown strongly internationally to become the third largest builders' merchant in the UK. The Board is pleased that we will continue to have the benefit of his unique experience and knowledge of the business as non-executive Chairman."

    Mr. Slark was a Director of BSS Group plc from 2005 until 2010. No other disclosures are required to be made in respect of Mr. Slark under paragraph 6.6.7 of the Listing Rules of the Irish Stock Exchange.

    Ends 2 February 2011

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Murray Consultants + 353 1 498 0300
    Joe Murray

    Trading Update

    Released: 07/01/2011

    Grafton Group plc, the builders merchants and DIY group with operations in the UK and Ireland, issues this trading update for the year ended 31 December 2010.

    After a reduction in sales in the first quarter the following three quarters each showed modest growth. Group turnover to the end of December 2010 was c. €2.00 billion compared to the €1.98 billion achieved in 2009. Sales in the second half were c. €1.02 billion, up c. 3 per cent on the €0.99 billion achieved in the comparable period in 2009. Extreme weather in late November and December impacted negatively on sales.

    Group merchanting turnover continued to improve with an increase of 3 per cent in the year. UK merchanting sales were up c. 7 per cent on the €1.32 billion achieved in 2009 (c. 3 per cent in sterling). The decline in Irish merchanting turnover moderated further in the second half with sales down 7 per cent relative to a fall of 16 per cent in the first half. Retailing sales finished the year down c. 7 per cent consistent with earlier trading statements issued by the Group. Turnover in the Group's manufacturing division was down c. 4 per cent on last year.

    Grafton has reached outline agreement with Travis Perkins, subject to formal OFT approval, to acquire 10 of their plumbing and heating branches in England and Wales. Nine of these currently trade as PTS and the other as City Plumbing Supplies.

    Grafton's financial position remains strong with good liquidity and positive cash flows from operations. The improvement in operating profitability evident in the first half has progressed strongly into the second half. The Group is well positioned for continuing growth in earnings as its markets recover.

    Ends 7 January 2011

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook
  • Date Title
    18 November 2010 Interim Management Statement
    31 August 2010 2010 Interim Results
    13 July 2010 Trading Update for the six months ended 30 June 2010
    06 May 2010 Interim Management Statement
    04 March 2010 2009 Final Results
    06 January 2010 Trading Update

    Interim Management Statement

    Released: 18/11/2010

    Grafton Group plc, the builders merchanting and DIY Group with operations across the UK and Ireland, issues this management statement for the period ending 17th November 2010.

    Group turnover to the end of October 2010 was €1.70 billion up marginally on the €1.69 billion recorded in the same period last year.  This compares to a fall in first half Group sales of 1%. The Group's trading performance has made steady progress during the year recording reasonably consistent like for like sales increases since February 2010.  Group turnover in Quarter 1 was €444 million (2009: €470 million), in Quarter 2, €535 million (2009: €520 million) was recorded and in Quarter 3, €546 million (2009: €522 million).

    UK merchanting sales for the year to the end of October are up 6%, compared to 5% to the end of June.  While Irish merchanting sales continued to fall, the rate of decline continued to ease as the year progressed.

    The Group's retailing businesses, operating in Ireland, recorded a fall in sales of 7% in the year to October, similar to the performance in the first half of the year. Group manufacturing sales were down 3% in the year to end October, relative to a decline of 7% in the first half.

    The Group's profitability in Quarter 3 was well ahead of last year and this trend has continued into the fourth quarter. In the merchanting division, there was a significant improvement in UK profits and the Irish business returned to breakeven. Retailing has operated profitably and losses in manufacturing were well below last year. Grafton's financial position remains strong with good liquidity and positive cash flows from operations. A good base has been established from which renewed growth in earnings can be generated over the coming years as market conditions normalise.

    Ends.

    18th November 2010

     
    For further information please contact:
    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    2010 Interim Results

    Released: 31/08/2010

    Highlights

    Grafton Group plc announces its interim results for the six months ended 30 June 2010.

    2010 2009
    Revenue €979 m €990 m
    Operating profit / (loss) €14.8 m (€8.3 m)
    Profit before tax €13.4 m €3.7 m
    Earnings per share 5.6 c 1.5 c
    Dividend / 'A' ordinary share purchase 2.5 c 2.5 c

    FINANCIAL HIGHLIGHTS:

    • Turnover decline stabilised at €979m
    • Turnaround of €23m brings operating profits to €14.8m
    • Gross margin increased by 26 basis points
    • Like for like costs reduced by €22.6m
    • Shareholders' funds increase by €54.8m to €966.6m or €4.18 per share
    • Strong operational cash flow of €60.2m
    • Further net debt reduction of €41.4m lowers debt/equity ratio to 29 per cent
    • Refinancing of net debt to 2013 completed

    OPERATIONAL HIGHLIGHTS:

    Merchanting UK:

    • Operating profit more than doubles
    • Turnover increases by 5 per cent to €678.5m
    • Merchanting market improves
    • Two small businesses acquired and one branch opened

    Merchanting Ireland:

    • Approaches breakeven with €0.5m loss
    • Rate of contraction in turnover moderates to low single digits
    • Overheads reduced by €12m

    OUTLOOK:

    Commenting on the outlook, Michael Chadwick, Executive Chairman said:

    "The market challenges faced by the Group over recent years eased considerably in the first half. Losses in Irish merchanting were much reduced and operating profit in UK merchanting increased strongly. The improved trends in Group turnover were sustained in July and August. Grafton's profits are now recovering and we expect further profit improvement in the second half. A good base has been established from which renewed growth in earnings can be generated over the coming years as market conditions normalise."

    View the full 2010 Interim Results in PDF format.

    Trading Update for the six months ended 30 June 2010

    Released: 13/07/2010

    Grafton Group plc, the builders merchants and DIY Group with operations across the UK and Ireland, issues this trading update for the six months ended
    30 June 2010.

    Group turnover for the half year was circa €980 million, marginally lower than turnover of €990 million in the first half of 2009. As expected Group operating profitability in the period was ahead of last year. Profits recovered strongly in the second quarter relative to the first quarter of 2010 and the corresponding quarter in 2009.

    In constant currency terms sales growth in Q2 was 1 per cent after a decline in Q1 of 7 per cent. Like for like UK merchanting sales were down 2 per cent in Q1 and rose 4 per cent in Q2, as the new housing market strengthened. Irish merchanting sales continue to decline with falls of 22 per cent in Q1 and 10 per cent in Q2.

    The Group's financial position continues to be strong with good liquidity and substantial cash flow from operations. The refinancing of the Group's debt is progressing satisfactorily and on schedule. It is anticipated that new arrangements will come into effect in the third quarter.

    The Group expects to build on the progress made in the first half in the months ahead.

    Ends 13 July 2010
     
    For further information please contact:
    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    Interim Management Statement

    Released: 06/05/2010

    Grafton Group plc, the builders merchants and DIY Group with operations across the UK and Ireland, issues the following Interim Management Statement, which is in accordance with the reporting requirements of the EU Transparency Directive, in advance of the Company's Annual General Meeting to be held at 10.30am today in the IMI Conference Centre, Sandyford Road, Dublin 16.

    January trading was badly affected by the adverse weather conditions and sales in the month were €25 million below the previous January. Following this difficult start, trading in the UK, which now accounts for over 70 per cent of Group turnover, picked up with like for like turnover growth in each of the following months.  In Ireland, sales continue to be below levels achieved in 2009 but the rate of decline has reduced.

    Group turnover for the four months to the end of April was €617 million, down €22 million on the first four months of 2009. UK merchanting sales in sterling increased by 4 per cent in the three months to the end of April. The Group has seen a strong resurgence in new house building in the UK and is optimistic that the positive effects of this on its businesses will continue.

    During the first three months the Group incurred further rationalization costs of €1.7 million (three months to March 2009: €4.1 million) and this will result in annualised savings of €4.2 million.

    The Group continues to retain good liquidity and financial flexibility with a strong balance sheet and high cash deposits. Negotiations continue with regard to refinancing some of the Group's debt and it is anticipated that new arrangements will come into effect in the third quarter of this year.

    The benefit of the recent return to growth in turnover, the significant reduction in the Group's cost base and strengthening market positions are being reflected in an improved operating performance by the Group.

    The Board is pleased to announce that Roderick Ryan will be appointed as Senior Independent Director to succeed Anthony Collins who is retiring from the Board at the AGM later today. Mr. Ryan joined the Board as a non executive Director in 2006.

    6th May 2010

     
    For further information please contact:
    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    2009 Final Results

    Released: 04/03/2010

    Highlights

    Grafton Group plc announces its final results for the twelve months ended 31 December 2009. Grafton is a major operator in the UK builders merchant market and the leading merchant and DIY business in Ireland.

      2009 2008
    Revenue €1.98bn €2.67bn
    Adjusted operating profit* €26.2m €118.6m
    Operating profit per income statement €4.9m €99.2m
    Profit before tax €13.6m €64.1m
    Free cash flow €171m €212m
    EBITDA €74.1m €172.9m
    Adjusted earnings per share** 5.4c 32.2c
    Basic earnings per share 5.8c 25.1c
    Dividend / share purchase 5.0c 15.0c
    Net debt €322m €435m
    Gearing 35% 50%

    * Before intangible amortisation (€2.2m), impairment (€5.5m) and restructuring costs (€13.6m net)
    ** Before intangible amortisation, impairment, restructuring costs (net) and 2009 investment profit

    Financial Highlights:

    • Extensive measures taken to reduce Group's cost base by an annualised €85m
    • Working capital management and tight capex boosts free cash flow to €171m
    • Debt to equity ratio reduced to 35 per cent
    • Net debt reduced by €113m to €322m
    • Freely available cash deposits of €302m at year end
    • Emerging from the downturn with a well protected balance sheet
    • Interim dividend of 2.5 cent payable on 31 March 2010

    Operational Highlights:

    • Sharp fall in market demand leads to decline in sales
    • Satisfactory market share performance
    • Benefits derived from lower cost base, integration, scale related and procurement efficiencies
    • Trading stabilises in second half
    • Trading outlook beginning to improve following period of significant uncertainty
    • UK accounts for 68 per cent of total sales

    UK:

    • Turnover down 20 per cent to €1.34bn
    • UK turnover stabilises in second half as leading demand indicators turn more positive
    • Modest like for like growth returns to a number of UK activities
    • Ten new branches opened
    • Significant improvement in dry mortar sales

    Ireland:

    • Turnover down 35 per cent to €638m
    • Rate of sales decline continues to moderate
    • Ongoing financial benefits from reduced costs
    • Restructuring positions merchanting network for return to profitability
    • Sharp fall in DIY volumes mitigated by improved operational efficiencies

    Outlook:

    Commenting on the outlook, Michael Chadwick, Executive Chairman said:

    "Group sales in the second half of 2009 were similar to the first half. This stabilisation of sales, combined with the action taken to substantially reduce the cost base and integration benefits in our merchanting business, resulted in improved profitability during the second half of last year. Sales in the first two weeks of January 2010 were affected by severe adverse weather conditions. Since then sales have been close to expectations and last year with good increases into the UK new housing sector."

    "The Group's strong businesses and financial strength position it to consolidate market share in its key markets. With a lower cost base and more integrated merchanting business, it is well placed to benefit from its operating leverage as markets recover."

    View the full 2009 Final Results announcement in PDF format.

    Trading Update

    Released: 06/01/2010

    Grafton Group plc, the builders merchants and DIY group with operations in the UK and Ireland, issues this trading update for the year ended 31st December 2009.

    The stabilisation of Group turnover referred to in previous updates has continued through to the year end with sales in the second half being similar to those achieved in the first six months. In line with market expectations Group turnover to the end of December was c. €1.98 billion down c. €0.69 billion or 26 per cent on the €2.67 billion achieved in 2008.

    In the second half of 2009, in constant currency terms, Group merchanting turnover was down 14 per cent compared to 24 per cent in the first half. DIY turnover was down 18 per cent in the second half, unchanged on the first half. Manufacturing turnover was down 36 per cent in the second half compared to 49 per cent in the first half.

    Like for like sales per working day in the UK businesses, which account for over two thirds of Group sales, continued to improve relative to earlier in 2009. On a constant currency basis they were down 7 per cent in the second half of the year compared to minus 18 per cent in the first half. Trading conditions remain challenging in this market. However, "green shoots" evident in key UK sectoral indicators such as increased mortgage lending, housing transactions, house building and some house price inflation are being reflected in improving sales across our UK businesses. In Ireland, like for like sales per working day in the second half were down 32 per cent compared to minus 37 per cent in the first half.

    During the second half of the year the Group continued to be strongly cash generative and net debt levels were further reduced. Grafton has a comprehensive and strong business franchise in its core markets and benefits from a conservatively managed and securely funded balance sheet with good liquidity and substantial cash deposits. While the Group is cautious about the outlook for 2010 it will benefit from the cost reduction and integration programme implemented over the last 18 months. The Group is well placed to capitalise on any improvement in its markets.

    Ends. 6 January 2010
     
    For further information please contact:
    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook
  • Date Title
    10 November 2009 Interim Management Statement
    28 August 2009 2009 Interim Results
    03 July 2009 Trading update for the six months ended 30th June 2009
    29 April 2009 Interim Management Statement
    29 April 2009 Board Changes
    27 February 2009 2008 Final Results
    07 January 2009 Trading Update

    Interim Management Statement

    Released: 10/11/2009

    Grafton Group plc, the builders merchants and DIY group with operations in the UK and Ireland, issues this Interim Management Statement for the period ending 9th November 2009.

    In line with the Group's trading updates issued earlier this year, the Group continues to experience very challenging trading conditions. The stabilisation of Group turnover experienced since April has been maintained in September and October.

    Quarterly turnover across the Group was €470 million in quarter one, €520 million in quarter two and €522 million in quarter three. Group turnover for the month of October was €174 million.

    Group turnover to the end of October was €1.686 billion down €661 million or 28 per cent on the €2.347 billion in the same period last year. Like for like sales per working day in the Group's UK businesses in October were down 4 per cent on a constant currency basis compared to minus 18 per cent in the first half. In Ireland, like for like sales per working day in October were down 30 per cent compared to minus 37 per cent for the six months to 30th June 2009.

    In the period to the end of October, in constant currency terms Group merchanting turnover was down 21 per cent compared to 24 per cent at the half year, DIY turnover was down 19 per cent compared to 18 per cent at the half year and manufacturing was down 45 per cent compared to 49 per cent at half year.

    Leading macro economic indicators in the sector in the UK (increases in; housing starts, housing transactions, mortgage lending and house prices) continue to improve. Volumes have increased in dry mortar sales which are mainly exposed to the new housing sector. Increases in activity should be reflected in improving trading levels in Grafton's UK merchanting business during 2010.

    The extensive rationalisation and integration programme is well advanced and the benefit of cost reductions is being reflected across the Group. The Group is cash generative and net debt levels continue to be reduced. Grafton maintains a comprehensive business franchise in its core markets with strong competitive operating units and a conservatively managed securely funded balance sheet with good liquidity. The Group remains well positioned to capitalise on upturns in activity in its markets as they emerge.

    Ends. 10 November 2009
     
    For further information please contact:
    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    2009 Interim Results

    Released: 28/08/2009

    Highlights

    Grafton Group plc announces its interim results for the six months ended 30 June 2009. Grafton has a significant presence in the UK Builders Merchanting market which accounted for two thirds of turnover in the half year and is the leading builders merchanting and DIY operator in Ireland.


    2009 2008

    Revenue

    €0.99 bn €1.44 bn

    Operating (loss)/profit

    (€8.3 m) €71.8 m

    Profit before tax

    €3.7 m €53.4 m

    Earnings per share

    1.5 c 20.2 c

    'A' ordinary share purchase

    2.5 c 10.0 c

    Financial Highlights:

    • Turnover down by 31 per cent and by 24 per cent in constant currency terms.
    • Investment and property profit of €28 million and restructuring costs of €9 million.
    • Cash generated from operations of €77 million in the period.
    • Secure funding position and good liquidity with cash balances of €270 million at period end.
    • Net debt down by €56 million to €380 million and gearing down to 41 per cent.
    • Shareholders' funds up by €61 million to €930 million.

    Operational Highlights:

    • Range of actions taken in response to sharp deterioration in economic environment and decline in the Group's markets.
    • Cost reduction programme achieved annualised savings of over €70 million.
    • Continued emphasis on integration of the merchanting business in the UK and Ireland.

    Outlook:

    Commenting on the outlook, Michael Chadwick, Executive Chairman said:

    "Grafton's focus remains firmly on maximising operational efficiencies and cash generation. The intensity of the downturn in our markets has moderated and recent months have seen more stable sales levels. In the UK, housing starts are rising and leading indicators for repair, maintenance and improvement work are positive. Grafton has strong competitive operating units and a conservatively managed securely funded balance sheet with good liquidity. The Group is confident of trading successfully through this major cyclical downturn and is well positioned to capitalise on upturns in activity in its markets."

    Trading update for the six months ended 30th June 2009

    Released: 03/07/2009

    Grafton Group plc, the builders merchants and DIY Group with operations in the UK and Ireland, issues this trading update for the six months to 30th June 2009.

    As previously announced in the Interim Management Statement released on 29th April, the Group continues to experience the most challenging trading conditions in decades. The ongoing lack of available credit and depressed markets have resulted in sharp falls in investment and spending on housing and residential repair, maintenance and improvement. Accordingly, the Group's profitability has been impacted severely. UK operations traded at a profit while Irish operations were loss-making. A combination of UK trading profits and a €26 million realised profit on investment and property sales has substantially offset Irish trading losses, significant restructuring costs and interest charges incurred during the period. While trading conditions continue to be difficult, turnover has stabilised across the Group's activities since April this year.

    Group turnover for the six months to 30th June was circa €990 million, with Quarter 2 achieving €520 million (Quarter 1, €470). Turnover for the first half year is down €450 million or 31 per cent on the €1.4 billion in the same period last year and by 24 per cent on a constant currency basis (first quarter 2009 -22 per cent). The Group's merchanting business which accounts for 85 per cent of Group turnover has experienced a 24 per cent decline in turnover in the period in constant currency terms (22 per cent in Quarter 1). The Group's retailing activities located exclusively in Ireland continued to perform better than merchanting and experienced an 18 per cent decline in the period (-20 per cent in Quarter 1). The Group's manufacturing activities suffered most with turnover continuing to be down 49 per cent in the period (50 per cent in Quarter 1).

    Throughout the period management has continued to rationalise the business, cutting costs aggressively. The reduction in Group overheads expected in 2009 is now estimated to exceed €70 million (previously we indicated savings of €55 million). No acquisitions have been completed in the first half and capital expenditure is now running at less than 50 per cent of Group depreciation. Cash is being released from both trading and working capital and the Group continues to have the advantage of a strong balance sheet with relatively modest gearing and high cash balances providing adequate financial resources to fund Group activities.

    The recent recovery in the exchange rate between sterling and the euro to 85.21 pence/euro from the year end closing rate of 95.25 pence has significantly improved the strength of the Group's balance sheet at the period end. The realised profits from investments referred to above arise from an exceptional cash gain on a financial investment, which had previously been carried on the balance sheet for a nominal amount, and from a property disposal. Cash received from these transactions has further strengthened the Group's cash position.

    The low interest rate environment and the steady trend of rising mortgage applications and loan approvals in the UK is encouraging in terms of indicating the prospect for an improvement in markets in the UK. The Group has now entered the seasonally stronger trading period of the second half of the year during which it expects to return to modest levels of profitable trading across the Group while the rationalisation and cost cutting measures taken to date continue to ensure that the Group is best placed to benefit from any recovery in the market.

    Ends.

    3rd July 2009

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    Interim Management Statement

    Released: 29/04/2009

    Grafton Group plc, the builders merchants and DIY Group with operations across the UK and Ireland, issues the following Interim Management Statement, for the period 1 January to 28 April 2009, in advance of the Company's Annual General Meeting to be held at 10.30am today in the IMI Conference Centre, Sandyford Road, Dublin 16.

    Following adoption of the International Financial Reporting Standard on Operating Segments with effect from the 1st January 2009, the Group has identified three reportable segments; Merchanting, Retailing and Manufacturing and accordingly, the following Interim Management Statement is based on these segments.

    During the period the Group faced the most challenging trading conditions in decades. The reduced availability of credit which has become apparent over the last two years has led to significantly lower investment and spending on housing and residential repair, maintenance and improvement. The trading environment so far this year was very much weaker than the Group experienced in the first four months of 2008. As expected housing starts and completions have fallen and, combined with lower RMI spending, have significantly impacted the Group's merchanting and manufacturing businesses. Sales have also been affected by the poor weather in the early part of the year and the 15% decline in the average value of sterling against the euro (2009: Stg90.7p, 2008: Stg76.7p) in the period.

    Group Turnover for the three months to the 31 March 2009 was €470 million and was down €220 million or 32% on quarter 1 2008 and by 22% in constant currency terms.

    The Group's Merchanting business which accounted for 85% of Group turnover in the period has experienced a 25% decline in turnover in constant currency terms. While capital and acquisition expenditure has been curtailed significantly the development of the merchanting business continued with the opening of two new Selco stores and five other locations. No acquisitions were completed in the period. The branches located in Ireland (which accounted for 24% of the Group's merchanting turnover) experienced a decline in turnover of 45%.

    The Group's Retailing business, located exclusively in Ireland, held up slightly better than expected while consumer spending declined from the high levels of recent years. The Group's Retailing turnover declined by 17% in the period.

    Group Manufacturing activities, accounting for less than 3% of Group turnover, have suffered most given this segment's high exposure to new house building activities and high level of fixed costs. Turnover in this sector was down 50% during the period. The dry mortar business, which represents the most significant portion of this business (60%), is now well placed to benefit from any improvement in new housing.

    Management has been progressively addressing the very difficult trading environment faced by the Group and further rationalisation and cost cutting measures have been implemented during the period. The reduction in the Group's overheads is now clearly evident in the reduced cost base which has mitigated the effect of the decline in turnover on Group profitability.

    The results for the first half of 2009 will reflect the challenging trading environment faced by the Group. However, in the second half the Group expects to benefit from the seasonally stronger trading period and the reduced cost base is on target to yield savings of up to €55 million in 2009. The Group continues to have the advantage of a strong balance sheet and has adequate financial resources to fund Group activities from internal cash generation, available and undrawn bank facilities and cash balances.

    29 April 2009

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    Board changes

    Released: 29/04/2009

    Grafton Group plc ("the Company") announces the following Board changes:

    The Board is pleased to announce the appointment of Mr. Charles Fisher (59) as a non-executive Director with effect from 1 May 2009. Mr. Fisher, who has a background in property investment and building materials, was Chief Executive and Chairman of Sharpe & Fisher plc, the UK builders' merchant company, from 1989 to 1999. He is former non-executive Chairman of Mowlem plc and is a former director of a number of other public companies including Travis Perkins plc, Baggeridge Brick plc, South Western Electricity plc and Delta plc. He is currently non-executive Chairman of Country Homes & Gardens plc.

    The Company confirms that there are no other disclosures required in respect of Mr. Fisher's appointment pursuant to Rule 6.6.7 of the Listing Rules.

    Mr. Peter S. Wood has notified the Board that for important personal and family reasons he needs to step down as a member of the Board and has resigned as a Director as of today's date. The Board wishes to thank Mr. Wood for his outstanding contribution and extends its best wishes to him and his family.

    29 April 2009

    Susan Carroll
    Assistant Company Secretary
    Grafton Group plc

    2008 Final Results

    Released: 27/02/2009

    Highlights

    Grafton Group plc announces its final results for the twelve months ended 31 December 2008. Grafton is a major operator in the UK builders merchant market and the leading merchant and DIY business in Ireland. In the year under review 63 per cent of turnover was generated in the UK and 37 per cent in Ireland.

    2008 2007 Change
    Revenue €2.67bn €3.21bn (16.6%)
    Operating profit per income statement €99.2m €270.8m (63.4%)
    Operating profit (adjusted)* €118.6m €265.8m (55.4%)
    Profit before tax €64.1m €235.8m (72.8%)
    Adjusted earnings per share* 32.2c 84.3c (61.8%)
    Basic earnings per share 25.09c 86.16c (70.9%)
    Share purchase 15.0c 22.0c (31.8%)
    Cash flow per share** 49.5c 110.8c (55.3%)
    * Before intangible amortisation and restructuring costs
    ** Based on profit after tax, plus depreciation and intangible amortisation

    Financial Highlights

    • Cash flow optimised in challenging conditions
    • Cash conservation prioritised over development and acquisition spend
    • Working capital reduced by €112 million or 27%
    • Strong cash flow from operations of €253m
    • Good liquidity retained with cash balances totalling €225m at year end
    • Net debt reduced by €114.8m to €435.6m
    • Strong balance sheet with 50% gearing underpinned by secure funding position and significant property portfolio
    • Turnover declined by 17% to €2.67bn in euro terms and by 8% in constant currency terms
    • Operating profit before rationalisation and other non-recurring costs fell by 55% to €118.6m
    • Sterling devalued 23% during the year significantly impacting the value of UK assets on translation
    • Adjusted earnings per share were down by 62% to 32.2 cent.
    • A Ordinary share purchase reduced to 5.0 cent (2007: 12.0 cent)
    • Total A Ordinary share purchases of 15.0 cent (2007: 22.0 cent)

    Operational Highlights

    • Greater branch network efficiencies to respond to declining volumes
    • New initiatives to deliver significant procurement benefits
    • Continued focus on cost reduction, scale-related benefits, closer integration, branch consolidation and brand synergies
    • Cost base reduced by annualised €45m
    • New investment focused on projects offering exceptional value and strategic positioning for the future
    • UK operations accounted for 63% of turnover and 67% of operating profit
      • UK turnover of £1.34bn (2007: £1.35bn) fell by 1% and by 15% in euro
      • Demand slowed substantially from mid-year
      • UK operating profit declined by 52% to €68.0m (2007: €142.1m) and by 44% in sterling terms
    • In Ireland, turnover declined by 20% to €986m (2007: €1.23bn)
      • First half merchanting turnover fell 16% and 27% in second half
      • Increased emphasis on RMI and on energy saving materials
      • Like for like DIY sales down 11%
      • Closer management integration and significant cost reductions to offset impact of declining turnover

    Outlook

    Commenting on the outlook, Michael Chadwick, Executive Chairman said:
    "We are operating in difficult economic circumstances and management is continually reassessing its response to changing conditions. We are taking actions proportionate to the challenges faced in the UK and Irish markets. In the current year, we will maintain our focus on cost control, operational efficiencies and cash generation and implement deeper cuts to overheads where demand continues to contract.

    Trading in January and February continued to decline, made worse by the heavy snowfall. We expect to continue generating strong cash flow, retain good liquidity and maintain our secure funding position. The Group will also benefit from ongoing working capital management and a lower interest rate environment. We have the benefit of a strong balance sheet and moderate gearing.

    Grafton's businesses have strong market positions and brands in the UK and Ireland and expect to emerge from the current market downturn as more efficient enterprises well placed to take advantage of growth opportunities. While conditions in the financial and credit markets make the timing and nature of any recovery uncertain, both economies have been resilient to past economic shocks and will eventually recover from the current downturn."

    View the full 2008 Final Results in PDF format.

    Trading Update

    Released: 07/01/2009

    Grafton Group plc the builders merchants and DIY group with operations in the UK and Ireland, issues this trading update for the year ended 31st December 2008.

    The difficult trading conditions reported in our Interim Management Statement on the 19th November continue across our markets in both the UK and Ireland. Group Turnover for the year is expected to be circa €2.67 billion after taking into account the conversion effect of the significant sterling weakness experienced in 2008.

    Grafton Group is profitable and cash generative. Management continues to deal with the challenges presented in the current trading environment. The Group expects that earnings before exceptional costs for the full year will be towards the lower end of market expectations.

    The Group's announcement of its preliminary results is expected to be on February 27th, 2009.

    7 January 2009

    For further information please contact:
    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook
  • Date Title
    19 November 2008 Interim Management Statement
    29 August 2008 2008 Interim Results
    10 July 2008 Trading Update for the Six Months Ended 30 June 2008
    08 May 2008 Interim Management Statement
    10 March 2008 2007 Final Results
    04 January 2008 Trading Update

    Interim Management Statement

    Released: 19/11/2008

    Grafton Group plc, the builders merchants and DIY Group with operations in the UK and Ireland, issues the following Interim Management Statement.

    Difficult trading conditions across our markets and significant sterling weakness resulted in a decline in Group turnover of 14.5% to €2.35 billion in the 10 months to October 2008. The decline was 6 per cent in constant currency terms (after taking into account the impact of the average decline in Sterling of 13.6% during the period).

    Although new house building activity in the UK declined dramatically in the period, the Group's significant exposure to the RMI sector supported turnover which increased by 1.5 per cent in Sterling. The downward pressure on the RMI market activity, already evident since the spring, gathered pace as the year developed resulting in a decline of six per cent in like for like sales in the ten months. Declining house prices, restrictions on the availability of mortgages and reduced growth in real disposable incomes put customers under pressure to cut back on housing related expenditure and investment.

    In Ireland, turnover was down by eighteen per cent in the ten months to the end of October 2008. Like for like sales declined by 19%. The economy continued to go through a very difficult period of slowdown and contraction. The scale of the downturn in the housing market which is now under way for almost two years, has been made worse due to the significantly increased cost of borrowing and a severe tightening of credit. The impact of the decline in housing starts and completions on the Irish Merchanting business has been partly offset by market share gains and reasonable levels of activity in the RMI and non residential new build markets.

    Turnover in the Irish DIY business declined being adversely affected by reduced retail spending due to a sharp decline in consumer confidence, weak labour market trends and a reduction in real disposable incomes.

    Grafton continues to be profitable and cash generative and is dealing with the challenges presented by weakening economic conditions and events in the financial markets from a position of strength. The focus of our experienced management teams will remain on (i) achieving efficiencies through cost cutting yielding €30 million of annualised savings achieved to date at a cost of €6.2 million, and (ii) maximizing cash flow generation. Our ability to control working capital continues to be a key priority and cash flow will also benefit from lower levels of capital expenditure and acquisition activity. The balance sheet is supported by a prudent level of borrowing and good liquidity in the form of cash deposits and undrawn committed facilities. The Group's mainly floating rate interest exposure will benefit from the recent reductions in Euro and Sterling interest rates.

    The Group has a strong balance sheet backed by tangible assets with a substantial property portfolio. The actions outlined above should leave the Group's strong brands well placed to cope with evolving market conditions and return to profitable growth when the UK and Irish economies begin to emerge from the current downturn.

    19 November 2008

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    2008 Interim Results

    Released: 29/08/2008

    Financial Overview

    Grafton Group plc, the builders merchants and DIY Group with operations in the UK and Ireland, announces its interim results for the six months ended 30 June 2008.

    2008 2007 Change

    Revenue

    €1.44 bn €1.61 bn - 11 %

    Operating profit*

    €72.9 m €124.4 m - 41 %

    Profit before tax

    €53.4 m €106.4 m - 50 %

    Adjusted earnings per share *

    20.6 c 39.1 c - 47 %

    Basic earnings per share

    20.2 c 38.7 c - 48 %
    Share purchase 10.0 c 10.0 c
    Cash flow per share** 33.4 c 50.4c - 34%
    * Before intangible amortisation
    ** Based on profit after tax, plus depreciation and intangible amortization

    Commenting on the results today, Michael Chadwick, Executive Chairman said:

    "The first half brought the most challenging trading conditions encountered in over 15 years. With a healthy balance sheet and strong cash flows, the Group is focused on emerging from this downturn a stronger and more competitive organisation. Grafton's current focus on cash generation, cost control, efficiency improvements and market development should leave the Group strongly positioned for profitable growth when the Irish and UK economies recover and trading conditions improve. Both economies are fundamentally sound and should return to more sustainable levels of growth when the restraining effects of higher inflation and tighter credit conditions ease."

    Interim Management Report
    For the six months ended 30 June 2008

    The first half of the year brought the most challenging trading conditions encountered by the Group since the early 1990s. The impact of these conditions, together with an average 13 per cent decline in sterling's exchange rate against the euro, resulted in a significant reduction in profitability compared to the record levels achieved in the first half of last year.

    Highlights

    • Turnover declined by 11 per cent to €1.44 billion and by 2 per cent in constant currency terms.
    • Operating profit (before intangible amortisation) was down by 41 per cent to €72.9 million.
    • Profit before tax was down by 50 per cent to €53.4 million.
    • Adjusted earnings per share were down by 47 per cent to 20.6 cent.
    • Despite the more difficult market environment, a significant increase in cashflow was generated from operating activities to a level of €116.9 million.

    The instability in the financial markets, which pushed up interest rates and restricted the availability of credit, together with higher energy and commodity prices, while global in nature, led to a decline in residential investment in the UK and intensified the adjustment already underway in the Irish housing market.

    The UK business benefited from positive market conditions in the early months of the year but demand eased as the half year progressed due to the impact of interest rate increases and tighter conditions in the credit markets. UK turnover declined by 7.4 per cent to €907.4 million (2007: €979.4 million) but was up by 6.5 per cent in sterling. UK operating profit declined by 24 per cent to €48.6 million (2007: €63.8 million) and by 13 per cent in sterling.

    In Ireland, the adjustment in the housing market to more sustainable supply and pricing levels gathered pace leading to sharply reduced volumes in merchanting and manufacturing. Demand in the Irish DIY business was weak due to declining consumer confidence and poor weather compared to the record levels of consumer spending and very favourable weather conditions experienced in the first half of 2007. Irish turnover declined by 16 per cent to €530.5 million (2007: €628.8 million) and operating profit was down 60 per cent to €24.3 million (2007: €60.6 million).

    Grafton is well placed to meet the challenges presented by these conditions with a strong balance sheet and strong cash flow during the period. The Group is now focused on emerging from this phase of the economic cycle a stronger and more competitive organisation. Business units are prioritising competitiveness, optimising efficiencies and capitalising on niche market development opportunities arising in the changed environment. The first half year results include a charge of €7 million associated with rationalisation measures already implemented in Group companies and other costs. The scale and synergies achieved from the substantial growth of recent years are delivering additional benefits to the Group's trading operations.

    A Ordinary Share

    The Board has agreed to purchase one A ordinary share per Grafton Unit for a cash consideration of 10.0 cent per share on 12 September 2008 (the record date). The cash consideration will be paid on 3 October 2008. The decision to maintain the A ordinary share purchase payment at the same rate as paid in the comparative period is based on the strong financial position and cashflows of the Group.

    Development

    The Group continued to develop and expand its business through acquisition and organic growth opportunities. Six bolt-on acquisitions were completed improving coverage of the UK merchanting market from a further twelve locations. These businesses had a combined turnover of €40 million at the time of acquisition and offer performance improvement opportunities through purchasing and overhead synergies as part of the wider UK business.

    The Group's coverage and positioning within the UK merchanting market also improved with the opening of fourteen branches in locations which offer attractive opportunities for growing market share. Two stores were added to the retail branch network in Ireland.

    Against a more challenging trading backdrop, the Group raised the investment criteria in assessing acquisition and development opportunities. Acquisition activity is likely to be at lower levels and only essential capital projects will be undertaken until evidence emerges of an improvement in market conditions in the UK and Ireland. As a strong and competitive player in each of its markets, the Group will be focused on securing profitable market positions and capitalising on market development opportunities that inevitably arise in these conditions.

    Operations Review - United Kingdom

    Against the background of progressively more challenging macro economic circumstances in the half year, the overall UK business reported an increase in sterling turnover of 6.5 per cent and a decline in sterling operating profit of 13 per cent. However, the weakness in sterling translated into a decline in euro terms. UK turnover declined by 7.4 per cent to €907.4 million (2007: €979.4 million). Operating profit declined by twenty four per cent to €48.6 million (2007: €63.8 million). The operating profit margin was 5.4 per cent (2007: 6.5 per cent).

    Growth in the UK economy slowed appreciably in the first half due to the combined effects of the credit crunch and rising food and energy prices that pushed inflation to well above the trend rate and limited the near term scope for a further easing of interest rates. Conditions in the residential property market weakened significantly in recent months. Tighter credit conditions led to higher mortgage rates and limited the availability of credit to borrowers. These factors and weakness in the wider economy reduced housing demand and led to a sharp deterioration in housing activity. Housing transactions and mortgage approvals, key measures of housing market activity, weakened considerably.

    The more resilient residential repair, maintenance and improvement market, which is the primary end-use market for the Group's UK merchanting sales, had an encouraging start to the year but weakened in the second quarter due to falling house prices, a lower level of equity withdrawal, declining housing transactions and a deterioration in consumer confidence.

    UK Merchanting

    Like for like sales in the merchanting business declined by 0.7 per cent. The operating profit margin in the overall merchanting business also declined by 0.7 per cent. This reflected the small decline in like for like sales, an improvement in the trading margin, unchanged like for like overheads in the Buildbase, Jacksons and Plumbase businesses and increased investment in the Selco and Plumbworld businesses. Selco and Plumbworld are two further routes to market which are being successfully developed.

    The organisation structure supporting the management and development of the UK merchanting business further evolved during the half year in response to tougher market conditions and in line with the Group's objective of improving the profit stream and returns from the business. An integrated management structure will now have responsibility for Buildbase, Plumbase, Jacksons and the specialist merchanting businesses. The structure should enable the business to function more effectively and over time lead to significant synergies in procurement, accounting, administration and other support office functions while retaining the unique strengths and strong market positions of the individual trading brands.

    UK Builders Merchanting

    Buildbase benefited in the early months of the year from reasonably favourable trading, broadly continuing the trend established in 2007. However, as indicated above, market conditions weakened in the second quarter.

    Regionally, Buildbase branches in the South East performed relatively better and overall turnover in the business increased marginally with the benefit of acquisitions and branch openings. Cost reductions partially mitigate the impact of lower volumes. The branch network was expanded through two single branch acquisitions and the opening of five branches. The Coventry and Market Drayton branches were relocated to new and enlarged facilities and Hire Centres were opened in eight branches.

    Buildbase continued to develop its Partnering initiative which provides a structured approach to developing long term supply chain relationships with Local Authorities, Housing Associations and major national contractors including the provision of dedicated procurement management services and managed stores.

    Jacksons, the East Midlands regional merchant reported broadly unchanged turnover with the businesses broad end-use market exposure enabling it to more effectively meet the challenges of a weakening market.

    Selco, a trade self select warehouse based format, continued to benefit from good levels of activity in the small projects segment of the RMI market. The three stores that opened last year in London grew turnover in line with expectations. Expansion of the format continued with the opening of a store in Sutton, South London and a further four stores are scheduled to open later this year increasing the network to twenty five and providing increased market coverage in London and other large metropolitan areas.

    In Northern Ireland, an easing of housing activity and prices from the record levels of recent years was accelerated by the international credit crunch and reduced demand from external investors. The contribution of the public sector to economic activity and employment provided a measure of resilience for the Macnaughton Blair business which achieved strong growth in RMI turnover partially offsetting the impact of a sharp decline in house building. Macnaughton Blair expanded its established position in the architectural ironmongery segment of the merchanting market with the acquisition of two ironmongery related businesses.

    UK Plumbers Merchanting

    The plumbers merchanting division incorporates the 188 branch Plumbase business and the bathroom products distribution business. The division increased sales substantially and despite generally weaker economic and trading conditions achieved a good level of sales growth in the like for like business. Operating profit increased in line with the scale of the business and the operating profit margin was maintained in line with the first half of 2007.

    Plumbase strengthened its market position with the completion of two single branch acquisitions and the opening of seven branches. Sales in plumbworld.co.uk, the internet retailer of bathroom products, continued to grow.

    UK Mortar

    EuroMix, the leading manufacturer of mortars for use in residential, commercial and public sector construction projects, experienced a significant decline in sales and profitability due to the fall in the volume of residential construction, exacerbated by higher energy and materials costs and competitive pricing trends.

    Operations Review – Republic of Ireland

    Irish turnover declined by 16 per cent to €530.5 million (2007: €628.8 million) and operating profit declined by 60 per cent to €24.3 million (2007: €60.6 million). The operating profit margin was 4.6 per cent (2007: 9.6 per cent).

    Growth in the Irish economy slowed sharply as the decline in residential construction which started in 2007 accelerated considerably. The housing market had an important role in the development of the economy in recent years and the adjustment in activity that is now well underway has contributed to the slowdown in the pace of economic activity generally. The Irish economy has also been affected by developments in international financial markets which have limited the availability and increased the cost of finance for home buyers. Higher oil and food prices and adverse exchange rate movements also had a negative affect on economic growth.

    Irish Merchanting

    Turnover declined by 16 per cent to €354.7 million (2007: €424.2 million) and profitability was significantly lower. This performance was influenced by the decline in housing output in response to a sharp fall in demand, the weaker pricing environment and a high level of unsold properties. Housing starts progressively weakened during 2007 and forecast current year completions of approximately 45,000 units represents a decline of 42 per cent on the level of supply in 2007 and half the level of completions at the peak of the market in 2006. Housing starts weakened further indicating that supply will moderate further. There was a small reduction in capacity in the merchanting sector and this trend is expected to continue with the closure of uneconomic competitor operations.

    The Heiton Buckley and Chadwicks business performed relatively well in the half year by limiting the impact of the dramatic fall in housing volumes through market share gains and an increased focus on the one-off housing market and the more resilient RMI market which continued to register volume growth. A number of branches benefited from an established exposure to the civils and commercial sectors where activity levels were good. The South Dublin City branch which opened last year and the relocated Tullamore branch performed strongly.

    Heiton Steel, the market leading steel stock-holding business, increased sales and profits. Stronger demand from the commercial and agricultural sectors largely offset lower volumes in the housing market and all products achieved better pricing due to the increase in steel prices.

    Management has responded to the significant challenges posed by the contraction in the housing market with tighter control of costs to partially offset the impact on profit of volume declines. Work continued on achieving closer integration of business units in order to fully realise scale related benefits and procurement gains derived from the substantial growth of recent years.

    Irish Retailing

    Turnover declined by 8 per cent to €154.6 million (2007: €168.2 million) and profitability was significantly lower. Trading in the forty two DIY and seven In-House at the Panelling Centre stores was influenced by a weakening trend in consumer spending and retail sales volumes following five years of strong growth.

    The performance of the Group's retailing business in the half year is benchmarked against exceptional growth in the first half of 2007 which benefited from higher spending linked to the maturing SSIA savings accounts and favourable weather which boosted seasonal demand for gardening products. In contrast, poor weather conditions led to more subdued demand during this year's gardening season. A new store in Carrick-on-Shannon which opened in March traded to expectations.

    The In-House at the Panelling Centre kitchen business is mainly exposed to the replacement market where demand held up well. Turnover was lower due to a more competitive environment as a number of participants commenced supplying the replacement segment of the kitchens market following the downturn in the new housing market.

    Irish Manufacturing

    Turnover and profitability in the windows, concrete and plactics businesses declined significantly due to the fall in residential construction activity. Management actions have been taken to better match capacity with demand.

    Finance

    The strong cash generative nature of the Group's businesses resulted in a cashflow from operating activities of €116.9 million (2007: €80.9 million) in the half year. This cashflow together with a favourable translation adjustment due to sterling weakness led to a decrease of €40.0 million in net debt despite spending €87.4 million on acquisitions and capital expenditure.

    Control of working capital was a key priority in our operations and resulted in a reduction in investment of €45.5 million which in part reflected the decline in turnover.

    The Group ended the half year in a strong financial position with shareholders funds of €1.04 billion after accounting for a negative translation movement of €46.7 million that arose, due to sterling weakness, on conversion of the net investment in the UK business. Shareholders' funds at 30 June 2008 were equivalent to net assets per share of €4.52. This figure does not reflect the potential uplift to fair value of the Group's large portfolio of freehold and long leasehold properties in the UK and Ireland including a number of properties which may become surplus to the Group's trading requirements.

    Net debt at 30 June 2008 was €510.4 million (30 June 2007: €586.5 million) equivalent to gearing of 49 per cent (30 June 2007: 53 per cent). Group debt repayable in the period to the end of 2010 is covered by cash resources and committed facilities.

    The Group's development over the past two decades has been largely funded by internal cashflows and a prudent level of borrowings. A strong balance sheet with high tangible net asset backing, cash generative businesses with leading market positions and the Group's good standing through its long term bilateral banking relationships has routinely enabled existing facilities to be refinanced and new facilities put in place over the past year against the background of much tighter conditions in the credit markets. The refinanced and new facilities are competitively priced at spreads which have not materially increased.

    Risks and Uncertainties

    The transparency (Directive 2004/109/EC) Regulations 2007 requires disclosure of the principal risks and uncertainties which could have a material impact on the Group's performance over the remainder of the financial year and cause actual results to differ materially from expected and historical results.

    Trading in the Group's business is affected by economic conditions in the UK and Ireland where the Group's earnings are generated.

    Demand in the UK and Irish builders merchanting markets and in the Irish DIY and UK mortar markets are sensitive to economic conditions generally including consumer confidence, interest rates, employment trends, inflation, demographic factors and housing market conditions. More difficult market conditions may reduce demand in the Group's markets resulting in lower volumes and profitability.

    A further deterioration in the financial and credit markets may also have an impact on the wider economy and housing market in both the UK and Ireland and potentially lead to lower demand in the Group's merchanting, DIY and mortar businesses.

    Sterling weakness could lead to lower reported Group earnings on translation of the results of the UK business into euro at the average rate of exchange for the second half of the year.

    Cautionary Statement

    This interim report contains forward-looking statements. These statements have been made by the directors in good faith based on the information available to them up to the time of their approval of this report. Due to the inherent uncertainties, including both economic and business risk factors underlying such forward-looking information, actual results may differ materially from those expressed or implied by these forward-looking statements. The directors undertake no obligation to update any forward-looking statements contained in this report, whether as a result of new information, future events, or otherwise.

    Outlook

    Trading conditions in July and August remained challenging and there are no immediate signs of an improvement in our markets. In Ireland, turnover continued to decline at a similar rate to the first half and UK like for like sales showed a mid single digit decline in July.

    The Irish economy is forecast to contract modestly in 2008 due to the decline in new housing investment. The ongoing adjustment to the housing market together with a general tightening in mortgage lending and higher interest rates is expected to lead to a continuation of the difficult trading environment in the Irish merchanting market over the remainder of the year. The weaker trend in consumer spending due to ongoing cost of living increases and weaker labour market conditions should continue to be reflected in moderating demand in the DIY sector.

    The near term outlook for the UK economy remains subdued with a further softening in activity forecast over the remainder of the year. The impact of the slowing economy, lower house prices and a sharp decline in housing market activity has weakened prospects for the RMI market which we expect to remain challenging.

    Grafton's long term experience of dealing with adverse economic conditions as well as growth phases has facilitated the implementation of systems and measures to both protect and maximise the Group's position during this downturn. Prudent management of resources during the extended growth period of recent years has produced high levels of cash flow and a strong balance sheet, leaving the Group well positioned to face the challenges of a downturn and to benefit from any related opportunities in its market.

    The Group will benefit in the second half from closer integration of the UK and Irish merchanting operations and a reduced cost base. The recently established warehouse facility in Shanghai will consolidate the supply of goods from existing and new Chinese suppliers into a single base and improve procurement returns.

    Despite the slowdown in Ireland and the UK, both economies are fundamentally sound and should return to more sustainable levels of growth when the restraining effects of higher inflation and tighter credit conditions ease. Grafton's current focus on cash generation, cost control, efficiency improvements and market development should leave the Group strongly positioned for profitable growth when the Irish and UK economies recover and trading conditions improve.

    View the full 2008 Interim Results in PDF format.

    Trading Update for the Six Months Ended 30 June 2008

    Released: 10/07/2008

    Grafton Group plc, the builders merchants and DIY Group with operations in the UK and Ireland, issues this trading update for the six months to 30 June 2008.

    Trading Performance

    Group turnover for the half year was €1.4 billion compared to €1.6 billion in the same period last year. In the UK, turnover increased by 6 per cent in sterling terms to circa Stg£700 million. UK like for like sales declined by circa 4.5 per cent in May and June and by circa 2 per cent in the half year. The Group's UK merchanting businesses sell primarily into the more resilient RMI market and have only a small exposure to the new housing market. The weakness in sterling against the euro (average euro/sterling exchange rate of 77.5p compared to 67.5p in 2007) meant that the increased sterling revenues translate into a decline in Grafton's euro stated group accounts.

    Turnover in the Group's Irish business was circa €520 million in a more challenging market. The Irish merchanting market continued to benefit from a good level of activity in the RMI market which helped reduce the impact of the slowdown experienced in the new build market. Overall sales declined by 16 per cent in May and June and at the same rate for the half year.

    The correction in the volume of housing starts and completions has been faster and deeper than expected. While the Group's exposure to the new build portion of the Irish housing market resulted in a decline in like for like sales, at current levels of trading less than ten per cent of Group turnover is exposed to this market.

    The Group is taking steps to improve productivity and reduce costs in its UK and Irish businesses and to maximise the benefits of synergies arising from the strong growth of its operations in recent years. These measures include accelerating the integration of the larger business units built up and acquired in recent years. These changes have so far incurred costs of circa €2 million that have been absorbed in operating costs for the half year. The benefits of these initial measures are already evident in the current operating cost base of the Group.

    Group Balance Sheet and Cash Flow

    The balance sheet remains financially strong with a comfortable level of gearing as the Group enters the more seasonally cash generative period of trading. In the absence of significant acquisition activity, net debt levels are expected to decline over the second half of the year.

    The Group continues to retain financial flexibility and holds cash deposits of circa €100 million and has circa €100 million of committed and undrawn bank facilities. These, combined with the strong cash flow generated, are more than sufficient to fund the ongoing needs of the Group both for day to day operations and future development aspirations. Group debt repayable in the period to the end of 2010 is covered by cash resources and committed facilities.

    In an environment where cash has become a key asset, the Group has raised the criteria required to justify investment relating to development and acquisition opportunities. The Group has entered a period where replacement capital expenditure is expected to be lower than the rate of depreciation. Acquisition activity is likely to be at lower levels than in previous years until there is evidence of an improvement in the Group's markets.

    Share Purchase

    The Group remains committed to maintaining the interim A ordinary share purchase at last year's level and based on current trading expects to be in a position to maintain the A ordinary share purchase for the full year at the same level as for 2007.

    Outlook

    The Group has entered the second half of the year in a strong financial position with a reducing cost base and a profitable and cash generative business which is well placed to deal effectively with a challenging trading environment in the UK and Ireland at a time of continued uncertainty in the credit markets. The Group remains confident about the long term fundamentals and underlying value of its businesses in the UK and Ireland.

    The Interim Results for 2008 are due to be announced on Friday 29 August 2008.

    10 July 2008

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    Interim Management Statement

    Released: 08/05/2008

    Grafton Group plc, the builders merchants and DIY Group with operations in the UK and Ireland, issues the following Interim Management Statement, for the four months ended 30 April 2008, in advance of the Company's Annual General Meeting to be held at 10.30am today in the IMI Conference Centre, Sandyford Road, Dublin 16.

    In the UK, the residential repair, maintenance and improvement market has demonstrated resilience despite lower investment and spending on housing due to tightening in the availability of finance secured on property. The Group's UK Merchanting business experienced positive trading conditions in the first quarter with low single digit growth in like for like sales. Market conditions weakened in April compared to strong growth in April 2007 and like for like UK sales fell. Overall UK sales increased by ten per cent in sterling in the four months. Ongoing development of the UK Merchanting business continued with the completion of five acquisitions trading from eleven branches with an annual turnover of approximately €40 million and the opening of eleven branches.

    In Ireland the reduction in new residential construction which started in the second half of 2007 gathered pace as housing output adjusts to a more sustainable level. The sharp fall in housing starts and completions has, as expected, led to a more difficult trading environment for the Irish Merchanting business. The Irish RMI market appears to be holding up well and non-residential construction remains strong.

    Growth in consumer spending in Ireland moderated from the high rates of recent years despite generally favourable income and employment conditions. Turnover in the Irish Retailing business was lower due to the more subdued retail environment and the absence of the very favourable weather that stimulated exceptionally strong demand in March and April 2007. The new store in Carrick-on-Shannon which opened in March traded ahead of expectations.

    Group turnover in the four months to 30 April declined by eight per cent to €944 million and reflects the adverse translation impact of a twelve per cent decline in sterling against the euro. Irish sales fell by sixteen per cent. Group profit before tax was, as expected, significantly down compared to the very strong performance in the first four months of 2007.

    Growth in the UK economy is expected to moderate and the RMI market is likely to become more challenging as the year develops. Contributions from acquisitions and scale related sourcing and cost synergies should help limit the impact on profit of market weakness. In Ireland low growth in the economy is forecast due largely to the downturn in the residential construction market and slowdown in the international economy. A programme to achieve scale related synergies and bring costs more into line with lower volumes without compromising the market positions and medium term prospects of the Group's businesses is ongoing. The Group's strong financial position and cash flow leave it well placed to cope with these more challenging markets.

    8 May 2008

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    2007 Final Results

    Released: 10/03/2008

    Record Sales, Profits and Earnings

    Grafton Group plc, the builders merchants and DIY Group with operations in the UK and Ireland, announces its final results for the year ended 31 December 2007.

    Financial Highlights

    2007 2006 Change
    Revenue €3.21bn €2.93bn UP 9%
    Operating profit * €265.8m €244.9m UP 9%
    Profit before tax # €228.6m €211.4m UP 8%
    Earnings per share (adjusted)* 84.3c 78.0c UP 8%
    Share purchase 22.0c 18.75c UP 17%
    Cash flow per share # 108.3c 100.4c UP 8%
    Net debt €550.4m €550.9m -
    Gearing 52% 54% -
    * Before property profit and amortisation of intangibles
    # Excludes property profit

    Operating Highlights

    • UK merchanting business performed strongly in a favourable market

    • Solid performance from the Irish merchanting business

    • Significant growth in the Irish DIY business

    • Operations were strongly cash generative

    Commenting on the results today, Mr. Michael Chadwick, Chairman said:

    "In another record year, the ongoing development of our businesses in the UK and Ireland has proved its worth. Strong brands in both markets and a healthy balance sheet leave the Group well positioned to respond to more demanding market conditions. We will continue to pursue the consistent growth orientated strategy that has been successful for the past two decades. While maintaining a focus on closer integration, scale related benefits, lower cost base and product sourcing gains, Grafton will also take advantage of acquisition and development opportunities that continue to be available and that represent value and are a good strategic fit."

    Grafton Group plc reports good growth in sales, profits and earnings per share for 2007.

    Highlights

    • Sales were up 9 per cent to €3.21 billion (2006: €2.93 billion).

    • Operating profit increased by 9 per cent to €265.8 million (2006: €244.9 million).

    • Profit before tax and property profit up 8 per cent to €228.6 million (2006: €211.4 million).

    • Adjusted earnings per share increased by 8 per cent to 84.3 cent (2006: 78.0 cent).

    • Adjusted diluted earnings per share up 8 per cent to 83.0 cent (2006: 76.5 cent).

    • Cash generated from operations was up 21 per cent to €303.8 million (2006: €251.9 million).

    • Strong balance sheet with shareholders' funds of €1.07 billion.

    • Lower net debt, gearing at a nine year low of 52 per cent and interest cover of 7.8 times.

    • Sixteenth consecutive year of increased share purchase / dividend payments.

    • Buyback of 10.5 million Grafton Units.

    The Group delivered a good performance for the year against the background of a strong UK economy and continued expansion in the Irish economy despite some easing of growth in the second half as the anticipated slowdown in the Irish housing market materialised.

    In the UK, the improvement in market conditions experienced in the second half of 2006 continued throughout the year. UK profits were at record levels due to good growth in the established business and contributions from acquisitions. The business experienced good like for like sales growth and this was reflected in an increased operating margin in the overall business.

    The Irish business outperformed in a market that was influenced by a significant decline in activity in the new housing market during the year which was partially offset by continued growth in the repair, maintenance and improvement and DIY markets.

    The overall results for 2007 reflect the benefit of pursuing a consistent strategy over the past two decades which has led to the creation of businesses with national or regional leadership positions in the builders merchanting, DIY and mortar markets in the UK and Ireland.

    The UK business increased turnover by 14 per cent to €1.98 billion (2006: €1.73 billion) and operating profit increased by 24 per cent to €142.1 million (2006: €114.6 million). The record results were driven by good volume growth and generally positive trading conditions in the merchanting market.

    Irish turnover increased by 2 per cent to €1.23 billion (2006: €1.20 billion). Operating profit declined by 5 per cent to €123.7 million (2006: €130.4 million). 2007 was a satisfactory year for the Irish business despite the decline in profit from the previous year's record level. The Irish Merchanting business was, as expected, impacted by the significant decline in new residential construction.

    Development and Finance

    The Group continued to consolidate and expand from its existing strong positions in the UK and Irish merchanting and Irish DIY markets. The spend on acquisitions in 2007 amounted to €89.2 million (2006: €87.1 million), of which €74 million related to trading businesses acquired by the Group, including deferred acquisition consideration of €9.5 million (2006: €11.9 million) relating to prior year transactions. Capital expenditure on development projects was €55.7 million (2006: €72.8 million). The combined acquisition and development commitments for the year resulted in expenditure of €144.9 million (2006: €159.9 million).

    Thirteen acquisitions in the UK increased scale and further strengthened the Group's position in the merchanting market through securing a presence in locations which complement the established branch network as well as providing enhanced product and additional route to market opportunities. A single branch acquisition improved coverage in the Irish builders merchanting market. The businesses acquired in the UK and Ireland trade from thirty three locations with annual sales of over €100 million.

    Considerable resources were also devoted to organic development opportunities to expand the merchanting and retailing branch networks and to enable the Group to more effectively serve these markets into the future. Thirteen merchanting branches were opened in the UK. In Ireland, one DIY store, one builders merchanting branch and one In House at the Panelling Centre store were opened.

    The addition of these forty nine trading locations marked a continuation of a successful focus and commitment to growth orientated development opportunities which will contribute to increased profitability in the future.

    he Group's operations have traditionally been strongly cash generative and this trend continued in 2007 leaving the Group in a strong financial position with lower net debt at the year end. Shareholders' funds were €1.07 billion at the end of 2007 and gearing was a modest 52 per cent. The Group has retained financing flexibility by holding significant cash balances and more than adequate committed facilities are in place to refinance term debt maturing over the next three years. The Group's overall financial position leaves it well placed to take advantage of acquisition and development opportunities which continue to be available and represent good value and are a good strategic fit.

    Share Purchase

    The Company purchased 1 'A' Ordinary share per Grafton Unit for a cash consideration of 10.0 cent (2006: 8.25 cent) which was paid on 3 October 2007. The Board approved the purchase of a further Ordinary share per Grafton Unit for cash consideration of 12.0 cent (2006: 10.5 cent) payable on 11 April 2008.

    The total purchase payments to shareholders for 2007 amount to 22.0 cent per Grafton Unit. This is an increase of 17 per cent on total share purchase payments for 2006 of 18.75 cent per Grafton Unit. This is the sixteenth consecutive year for the Group to increase its share purchase / dividend payments to shareholders. Group earnings per share cover the share purchase payments 3.8 times (2006: 4.2 times). The increase in share purchase payments over the prior year reflects the good results for 2007, strong cash flow from operations and management's confidence in the Group's future prospects.

    Share Buybacks

    The Group's highly cash generative trading operations, high interest cover and low gearing provided the financial strength to complete unit buybacks in the market while continuing to take advantage of ongoing acquisition and development opportunities. A total of 10.5 million Grafton Units, equivalent to 4.4 per cent of the Group's share capital, were bought back at a total cost of €72.8 million. This will have a positive impact on earnings per share in 2008 and beyond.

    Operations Review - United Kingdom

    UK sales increased by 14 per cent to €1.98 billion (2006: €1.73 billion) and operating profit increased by 24 per cent to €142.1 million (2006: €114.6 million). The UK operating margin increased to 7.2 per cent from 6.6 per cent reported for 2006.

    The UK continued to be a good market in which to do business. The economy experienced stable conditions in 2007 with growth above its trend rate, the strongest employment growth in a decade and unemployment at a thirty year low.

    The supply of housing in the UK continued to be lower than the level of demand implied by household formation rates. House prices showed good overall growth for the year although the market weakened in the second half. Mortgage approvals were also down due to higher interest rates and tighter conditions in the credit markets.

    he residential repair, maintenance and improvement market, which is the primary end-use market for the Group's UK merchanting sales, enjoyed modest volume growth in demand in 2007. Like for like sales in the Group's merchanting business increased by 4.8 per cent.

    UK Builders Merchanting

    Buildbase had an excellent year reporting strong growth in sales and profit due to a combination of good trading and operational improvements in the underlying business together with contributions from acquisitions and greenfield developments. Volume growth due to reasonable market conditions, a more positive pricing environment, continued rationalisation of sourcing arrangements and tight control of overheads contributed to the improvement in profit. Regionally, all areas of the branch network benefited from the improved trading environment and internal initiatives to improve profitability although demand was firmer across the Midlands and South East.

    Flemings, the leading independent builders and timber merchant trading from seven branches in Scotland acquired in 2006, was integrated into the Buildbase network and achieved a good level of profitability through operational efficiencies and purchasing gains. There were also good incremental contributions from three single branch acquisitions completed in 2006.

    Expansion of the Buildbase branch network continued with the completion of eight acquisitions adding ten branches. The three Buildbase branch openings in Melksham, Wiltshire; Yeovil, Somerset and Stowmarket, Suffolk traded in line with expectations.

    Buildbase branches in Poole, Dorset; Belper, Derbyshire and Wakefield, West Yorkshire were relocated to extensive modern facilities and now offer a wider range of products. The trading area of the Southend-on-Sea, Essex; Buckingham, Buckinghamshire and Inverness branches was expanded and new hire centres were opened in seven branches. A major refurbishment of the Cirencester, Gloucestershire branch was undertaken as well a number of smaller branch development projects.

    Jacksons, the leading regional merchanting business had a good year increasing sales and profit despite tougher competition due to significant capacity expansion in the East Midlands market in recent years. The four locations acquired in 2006 were integrated into the branch network and provide a sound basis for future growth in sales and profit. Market coverage improved with the acquisition of a single branch ironmongery business and the opening of a second branch in Lincoln. Tool hire centres were added in a number of branches.

    In Northern Ireland, activity in the housing and commercial markets was strong against the backdrop of an improving local economy. Macnaughton Blair reported a strong advance in sales and profits with all of the gains realised in the established branch network. Good progress was made in developing a presence in the Larne and Lisburn, Co. Antrim market following completion of two small acquisitions at the end of 2006.

    Selco, a trade only warehouse format set in a modern self service environment, benefited from good levels of activity in the small project segment of the RMI market. Last year's store openings in London, Manchester and Reading traded to expectations. The opening of three further stores in London increased the network to twenty stores with the majority of these stores located in major metropolitan areas.

    UK Plumbers Merchanting

    The plumbers merchanting division incorporates Plumbase, the UK's fourth largest plumbers merchanting chain which trades from one hundred and eighty three branches, and the bathroom products distribution business. The division delivered a substantial increase in sales and operating profit in a stable but competitive segment of the merchanting market. Acquisitions contributed very positively to increased profitability.

    Plumbase continued to improve market coverage with the opening of six branches and the completion of a two branch acquisition.

    Progress, a seventeen branch boiler and heating spares business was acquired in June 2007. The acquisition improves the Group's position in the heating spares market through a better geographical spread of branches. The Group successfully entered the internet retail market for bathroom products at the end of 2006 with the acquisition of plumbworld.co.uk, the UK's largest online retailer of bathroom products. The business traded in line with demanding pre-acquisition expectations.

    UK Mortar

    CPI EuroMix manufactures a range of mortars for use in residential, commercial and public sector construction projects, which it supplies from a network of nine plants in England and Scotland. EuroMix consolidated its leadership position in the silo based mortar market with further growth in volumes and sales. Operating profit was maintained at last year's level in a good market but with continuing competitive pricing pressure linked to the introduction of capacity in the sector in recent years. The Leeds plant that opened in July 2006 successfully increased volumes in the West Yorkshire market and traded profitably in 2007.

    Operations Review - Republic of Ireland

    Irish turnover increased by 2 per cent to €1.23 billion (2006: €1.2 billion). Operating profit was down 5 per cent to €123.7 million (2006: €130.4 million).

    The Irish economy performed strongly in 2007 with growth of five per cent driven by domestic demand and an impressive recovery in export growth. The volume of consumer expenditure is estimated to have increased by six per cent due to higher disposable income as a result of growth in employment and earnings and income tax reductions. Maturing SSIAs also contributed to increased consumer spending. Employment growth held up well with the rate of job creation substantially ahead of the euro zone area. Following the slowdown in construction activity during the year the financial and business services sectors replaced the construction sector as the principal source of job creation in the economy.

    House building levels adjusted following a long period of strong supply that reached a level of output which exceeded the economy's medium term requirements. During 2007 house building levels responded to the weaker demand and pricing environment. The fall in the market reflected reduced affordability due to rising interest rates, which were at their highest level for six years, and the high level of house prices achieved in recent years. Housing output responded to the changing market conditions with completions falling to 78,000 units from a peak of 88,000 units in 2006. Housing registrations, an indicator of housing starts, progressively weakened as the year progressed.

    Investment in non-residential building increased with good levels of activity in the commercial, industrial, civils and infrastructure markets. The housing repair, maintenance and improvement market benefited from increased spending and continued to grow.

    Irish Merchanting

    Sales were marginally higher at €819.2 million (2006: €816.6 million). The Irish merchanting business has developed rapidly having almost tripled its turnover over the past three years. 2007 was a satisfactory year for the business despite a small decline in profits from the record levels achieved in 2006. The business benefited from reasonably positive market conditions in the first half with relatively flat new housing activity and good growth in the non-residential construction segments of the market. Market conditions became more challenging in the second half due to the significant decline in housing starts and completions. Weakness in the housing market was partially offset by the continuing growth in the residential RMI and non-residential new build markets. Like for like sales declined by one per cent for the year.

    The Heiton Buckley and Chadwicks brands delivered a good performance in a market that experienced a sharp decline in volumes. The mix of the business benefited from a significant exposure to the housing repair maintenance and improvement and non-residential markets. More subdued house building related demand in a number of the Dublin branches was largely offset by better trading in the provincial branches which continued to experience positive trading conditions and less of an impact from a reduction in scheme house and apartment development. These branches experienced good demand in the RMI and one-off housing segments of the market.

    Irish merchanting grew through both acquisition and organic development. The business gained a presence in the Mid West market through the purchase of Market Hardware in Ennis. The opening of a new branch in South Dublin City provided an important base to grow market share within a catchment area that offers significant development opportunities in the years ahead. The branch in Mullingar, which opened in the second half of 2006, had a successful year and now has a well established presence in the Midlands market. Relocation of the Tullamore branch to a new purpose built facility enabled the branch to expand its product offering and strengthen its market leading position in the region.

    The business continued to focus on margin improvement making gains from purchasing efficiencies and tight control of costs. The opening of a Chadwicks Plumb Centre in Sligo provides a base for sales growth in the plumbing and heating products category. The Athlone branch was relocated from the town centre continuing the programme of branch relocations designed to increase capacity and improve customer service.

    Cork Builders Providers achieved higher sales despite the more challenging market place. This reflected the benefit of measures taken to expand turnover in the one-off housing and non-residential markets helping the business to overcome the impact of a volume reduction in residential development schemes. Davies, the Dublin based specialist plumbing, heating and civils merchant continued to benefit from positive market conditions in the commercial and infrastructure markets. Telfords, the Midlands based merchant, performed well benefiting from a solid customer base and investment in its Portlaoise branch.

    Heiton Steel, the market leading steel stock-holding business, had a satisfactory year. Strength in the civils and commercial markets and improved pricing helped to offset softness in housing related volumes. The Cork branch relocated to a new facility to enable it to offer a wider range of products and achieve operational efficiencies.

    Chadwicks Hire Centres and Sam Hire, the plant and tool hire business, continued to increase market coverage with the opening of branches in Tullamore and Limerick. The Group now trades from thirty four hire locations primarily sharing facilities with builders merchanting branches.

    Irish Retailing

    Sales increased by 9 per cent to €339.8 million (2006: €311.7 million). The Irish retailing business trades from forty one stores under the Woodie's DIY and Atlantic Homecare brands and from six In House at the Panelling Centre stores. The trading environment for the business was very positive. Retail sales volumes showed the highest rate of growth since 2000. Against this favourable background, the business achieved significant sales and profit growth.

    The increase in profitability was due to strong trading in the established stores and good contributions from store openings in 2006. This outcome was achieved despite absorbing increased property costs. Like for like sales growth for the year was 5.3 per cent. The first half benefited from very favourable trading in the gardening season measured against more subdued prior year trading.

    Store openings in 2006 in Castlebar, Co. Mayo, Navan, Co. Meath and in Nenagh, Co. Tipperary traded in line with expectations making good profit contributions for the year.

    The strong internal growth strategy for developing the Irish retailing business was sustained with the opening of a new Woodie's DIY store in Limerick and relocation of the Woodie's DIY store in Tallaght to a facility which doubles the store's trading area. The capacity of Woodie's DIY Waterford store was substantially expanded. These initiatives support the geographic development of the retail customer base and enable the marketing of a wider range of products.

    The Woodie's and Atlantic Homecare support offices and management were successfully merged during the year.

    The In House at the Panelling Centre business, which markets a range of quality kitchen and bedroom panelling products to trade and retail customers, benefited from strong volume growth in consumer spending, a good level of housing transactions and solid demand in the replacement market. The business achieved good sales and profit growth. The Galway store that opened at the end of 2006 traded in line with expectations and prior to the year end a sixth store was successfully opened in Waterford. Further store openings are planned.

    Irish Manufacturing

    The Irish manufacturing business delivered a resilient performance in the first half but second half trading conditions became more challenging and volumes declined in line with the slowdown in new house building activity.

    Finance

    Record profits and cash flows were generated in the merchanting, DIY and manufacturing businesses. Cash flow from operations amounted to €303.8 million (2006: €251.9 million).

    Working capital was well controlled with a modest additional net investment of €14.4 million (2006: €26.1 million) required to finance the increased activity levels across the Group.

    Shareholders' funds at the year end were €1.07 billion (31 Dec 2006: €1.01 billion). Retained profit after taxation for the year was €205.2 million. Year end shareholders' funds are stated after accounting for the cost of the 10.5 million units bought back during 2007 which reduced reserves by €73 million. Revenue reserves were reduced by €43.8 million due to exchange rate movements during 2007. Sterling weakness reduced the euro equivalent of the Group's net investment in the UK business on translation at the year end rate of exchange. The purchase of two 'A' Ordinary shares per Grafton Unit resulted in the return of €49.0 million (2006: €39.9 million) to shareholders and this amount was also written-off against revenue reserves.

    Net borrowings at 31 Dec 2007 of €550.4 million (31 Dec 2006: €550.9 million) were marginally down despite a total spend of €266.7 million on acquisitions, routine replacement and development capital expenditure and share buybacks. Net debt was reduced by €36 million due to the favourable translation impact of converting sterling debt to the euro at the weaker year end exchange rate of Stg73.34p compared to the rate of Stg67.15p at 31 Dec 2006.

    Net assets and actuarial liabilities of the Group's defined benefit pension schemes are included in the balance sheet in accordance with IAS 19. At the end of 2007 the net retirement benefit obligation, after deferred taxation, reduced to €12.6 million (31 Dec 2006: €27.3 million). The reduction of €14.7 million in the net liability was due to employer contributions, an increase in the discount rates used to value liabilities and investment income which were partially offset by more conservative assumptions concerning life expectancy.

    Outlook

    UK sales continued to increase in the first two months of 2008 albeit at a slightly lower rate than achieved in 2007. Sales were lower in the Irish merchanting business due to the much weaker new housing market.

    In Ireland, economic growth is expected to be lower than the record levels of recent years but still good by international standards. The Irish housing market will continue to adjust to a more sustainable supply and pricing environment in response to more moderate demand. Underlying demand for housing is however expected to remain strong due to favourable demographics and growth in employment and incomes. Affordability has been improving due to lower house prices and rising incomes and the current interest rate tightening cycle appears to have come to an end. The strength of demand for rented accommodation has pushed up rents and this should begin to translate into an improvement in housing starts.

    Growth in the repair, maintenance and improvement market and the non-residential and infrastructure markets is expected to continue through 2008 and should mitigate some of the impact of lower output in the new housing market. The Irish merchanting business will encounter weaker trading conditions with the prospect that there may be some improvement in housing starts later in the year.

    A clear focus is now in place within Irish Merchanting to achieve closer integration, thereby driving further scale related benefits, a lower cost base, and product sourcing gains. Our policy of being the preferred first choice supplier to our trade customers is both resilient and consistent and we expect to gain further benefit from the success of this policy in 2008.

    Volume growth in consumer spending is forecast although at a somewhat lower level than the very high growth rates of recent years. The Irish retailing business will also benefit from the internal initiatives and developments undertaken in 2007. A new Woodie's store in Carrick-on-Shannon was successfully opened earlier this month.

    UK economic growth is expected to moderate from a rate of expansion that has been at or above trend for over two years. Consumer spending and investment in housing is easing on the back of interest rate increases and generally tighter conditions in the credit markets. The residential repair, maintenance and improvement market has historically been less cyclical and we expect to see continued growth and development opportunities in the merchanting sector. The recent sterling interest rate reduction combined with further interest rate cuts expected in 2008 should help stimulate activity in the merchanting sector as we move into the last quarter and early 2009. The continuing weakness of sterling will reduce the value of the Group's earnings when translated into euro for reporting purposes if the current exchange rate continues throughout 2008.

    As in previous years the focus in the UK will be on closer integration of the merchanting business in order to achieve further scale related benefits including operational efficiencies and product sourcing gains. The Group also expects to continue making progress in developing its position in the merchanting market with a good pipeline of organic development opportunities and acquisitions. The further strengthening of the UK business in 2008 should result in financial rewards coming through in 2009 and beyond.

    The Group's strong brands in the UK and Ireland and its healthy financial position leave it well placed to respond to more demanding market conditions while continuing to pursue the consistent growth orientated strategy that has been successful for the past two decades.

    View the full 2007 Final Results in PDF format.

    Trading Update

    Released: 04/01/2008

    Grafton Group plc, the builders merchants and DIY Group with operations in the UK and Ireland, issues this pre-close period trading update for the year ended 31 December 2007. The Final Results for 2007 will be announced on 10 March 2008.

    Turnover for the year exceeded €3.2 billion, an increase of 10 per cent on 2006.

    The Group expects to report growth in adjusted earnings per share in line with or a little below the consensus market forecast of 86 cent (2006: 78 cent).

    In Ireland, the economy performed well supported by sound demographic, job creation and income growth fundamentals although the pace of expansion softened in the second half as growth returned to more sustainable long-term levels. The Irish new housing market experienced a decline in activity and is currently in a period of transition to a more stable pricing and supply environment following a prolonged period of strong growth.

    The Irish Merchanting business encountered more challenging trading conditions reporting a small decline in like-for-like sales in the second half. The business performed well against this background due to its significant exposure to the more stable RMI and non-residential markets. The Irish DIY business continued to grow like for like turnover supported by increased consumer spending and strong brands.

    The UK economy performed strongly in 2007 although there are some signs that growth slowed in the final quarter. The generally positive economic background and strong market position enabled the first half improvement in like for like sales and operating margin in the UK business to continue.

    Increased interbank interest rates and the expiry of low fixed interest rate swaps have resulted in an increase in the full year interest charge for 2007.

    The Group had an active year on the development front with the completion of fourteen acquisitions. The businesses acquired have annual sales of over €100 million and trade from thirty two branches in the UK and one in Ireland. These acquisitions were completed at a total cost of €74 million. Organic developments during 2007 included the opening of thirteen branches in the UK and three in Ireland.

    The Interim Results announcement on 14 August 2007 noted that the strong financial position of the Group could accommodate a selective approach to earnings enhancing share buybacks while also continuing to grow the Group through acquisitions and organic developments. Since then the Group has bought back 10 million Grafton Group Units (c. 4.2 per cent) at a total cost of €67.1 million.

    Looking ahead, the long term growth and stability of the UK economy place it in a strong position to cope with an expected slowdown and it should continue to be a market which presents sound growth and development opportunities in the merchanting sector. In Ireland, new residential construction is expected to continue to weaken in the first half. However, strength in the rental market points to continuing good underlying demand which should lead to an improvement in housing starts. The residential RMI and non-residential construction markets in Ireland are expected to be positive this year. Overall, the Group believes recent market estimates of EPS for 2008 in the range of 73 cent to 76 cent to be reasonable.

    Conference Call

    Grafton will host an Analysts' conference call today at 8.00am GMT to discuss this announcement. The dial-in numbers are:

    Ireland: +353 1 436 4265
    UK: +44 208 817 9301
    US: +1 718 354 1226
    Other: +353 1 436 4265

    A replay of the conference call will be available from 11.00am GMT. To access the recording, the dial in numbers are:

    Ireland: +353 1 436 4267
    UK: +44 207 7696425
    US: +1 630 6523111
    Other: +353 1 436 4267

    The digital replay security code is: 1128697 #

    Listen to an MP3 recording of the call (30.2 MB)

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook
  • Date Title
    04 August 2007 2007 Interim Results
    12 July 2007 Grafton Group plc Trading Update
    11 May 2007 Grafton Group plc AGM Statement
    01 March 2007 2006 Final Results

    2007 Interim Results

    Released: 14/08/2007

    Record Sales, Profits and Earnings

    Grafton Group plc, the builders merchants and DIY Group with operations in the UK and Ireland, announces its interim results for the six months ended 30 June 2007.

    Financial Highlights

    2007 2006 Change
    Revenue €1.61 bn €1.43 bn UP 13%
    Operating profit * €124.4 m €106.9 m UP 16%
    Profit before tax and property profit €106.4 m €90.2 m UP 18%
    Adjusted earnings per share * 39.1 c 33.0 c UP 18%
    Basic earnings per share # 38.7 c 42.8 c
    Share purchase 10.0 c 8.25 c UP 21%
    Cash flow per share 50.4c 43.5 c UP 16%
    * Before property profit and amortisation of intangibles
    # Includes property profit

    Operating Highlights

    UK merchanting traded strongly - 28 per cent increase in operating profit

    Solid performance by Irish merchanting business

    Significant gains in Irish DIY business

    Operations strongly cash generative

    Commenting on the results today, Michael Chadwick, Executive Chairman said:
    "The growth in sales, profits and earnings derives from a strong performance in the UK business and solid profit growth in Ireland. In the UK this was supported by good underlying demand in the RMI market and contributions from acquisitions. The Irish economy provided a positive trading background for the DIY business through the half year while Irish merchanting performed solidly. The Group is confident in the quality of its brands and businesses and believes it is well placed to respond to changing market conditions."

    Interim Results
    For the six months ended 30 June 2007

    As previously announced, these Interim Results were originally scheduled for release on 11 September 2007 and the release date has been brought forward in the light of market uncertainty. Today's announcement confirms the Group's strong performance in the first half, gives shareholders an update on current trading and takes the Group out of a close period so that the Company, at the discretion of the Board, would have the flexibility to make market purchases of Grafton Units.

    Highlights

    • Sales were up 13 per cent to €1.61 billion (2006: €1.43 billion).
    • Profit before tax, excluding property profit, increased by 18 per cent to €106.4 million (2006: €90.2 million).
    • Operating profit increased by 16 per cent to €124.4 million (2006: €106.9 million).
    • Adjusted earnings per share increased by 18 per cent to 39.1 cent (2006: 33.0 cent).

    Grafton Group plc reports a very positive outcome for the first half and the achievement of strong growth in sales, profits and earnings with a strong performance in the UK business and solid profit growth in Ireland.

    The UK business delivered a strong increase in profit helped by good underlying demand in the residential repair, maintenance and improvement market and contributions from acquisitions. The Irish economy provided a positive trading background for the DIY business through the half year while Irish merchanting performed solidly.

    These results endorse the strength of the Group's market position and brands in the UK merchanting and mortar markets and in the Irish merchanting and DIY markets. They also reflect the benefit to shareholders of the investments made over recent years to take advantage of acquisition and organic growth opportunities in the development of our UK and Irish businesses.

    The UK business increased turnover by 17 per cent to €979.4 million (2006: €836.5 million) and operating profit increased by 28 per cent to €63.8 million (2006: €49.8 million). The UK operating profit margin increased to 6.5 per cent (2006: 6.0 per cent). Irish turnover increased by six per cent to €628.8 million (2006: €590.7 million) and operating profit increased by six per cent to €60.6 million (2006: €57.1 million). The Irish operating profit margin was unchanged at 9.7 per cent.

    A Ordinary Share

    The Board has agreed the purchase of one A Ordinary Share per Grafton unit for a cash consideration of 10.0 cent per share on 24 August 2007 (record date). The cash consideration will be paid on 3 October 2007. This represents an increase of 21 per cent on the share purchase payment of 8.25 cent made on 18 October 2006 reflecting both the positive trading results for the half year and strong financial position of the Group.

    Grafton Units

    Today's announcement takes the Group out of a close period so that the Company, at the discretion of the Board, would have the flexibility to make market purchases of Grafton Units.

    The Group's highly cash generative trading operations, high interest cover and low gearing provide the financial strength to accommodate a selective approach to share buy backs while also continuing to take full advantage of acquisition and development opportunities which are a good strategic fit and have the potential to achieve acceptable long term returns for shareholders on invested capital.

    Development

    The Group continued to progress its long term development strategy of growth through acquisitions and organic branch developments.

    Five UK merchanting businesses trading from 21 branches and a single branch merchanting business in Ireland were acquired in the half year. These long established operations with annual sales of €60 million expand geographic and product coverage in the UK and Irish merchanting markets.

    Organic development initiatives completed in the half year involved the opening of eight merchanting branches in the UK and two in Ireland. The addition of 32 trading branches in the half year is important to the continuing growth of the Group over the coming years. The total spend on acquisitions and development projects in the half year was €73.4 million (2006: €65.4 million).

    Operations Review - United Kingdom

    UK sales increased by 17 per cent to €979.4 million (2006: €836.5 million) and operating profit increased by 28 per cent to €63.8 million (2006: €49.8 million). The UK operating margin increased to 6.5 per cent from 6.0 per cent.

    The UK economy grew a little above its long term trend rate in the half year marking 60 consecutive quarters of growth. The merchanting and mortar businesses benefited from the generally positive economic background. The recovery in consumer spending and the RMI market that was underway in the second half of 2006 was sustained over the half year.

    The strong RMI market led to robust demand and like for like merchanting sales increased by five per cent following growth of almost two per cent in the second half of 2006.

    Profitability in the overall UK business benefited from improved market conditions. This together with a focus on margin improvement through volume related purchasing gains and the benefit of cost reduction measures taken last year resulted in a substantial improvement in operating profit. There was also a good level of incremental contribution from acquisitions completed in 2006.

    UK Builders Merchanting

    Buildbase performed particularly strongly building on the progress of recent years. Substantial like for like sales growth, an improved trading margin due to more favourable purchasing arrangements and a sustained focus on cost control contributed to the strong results. The business enjoyed better trading and a stable pricing environment across the entire network with branches in the Midlands and South of England particularly benefiting from more positive market conditions. The Buildbase Civils and Lintels division established in 2006 met expectations and increased profit.

    The seven branch Scottish based Fleming business acquired in 2006 was successfully integrated into the Buildbase network and achieved a good level of profitability having traded at break-even prior to acquisition. Three single branch acquisitions completed in 2006 made good profit contributions. Two acquisitions in the half year gave the business a presence in Dover, Kent and High Wycombe, Buckinghamshire. Three new Buildbase branches were opened in Melksham, Wiltshire; Yeovil, Somerset and Stowmarket, Suffolk.

    Jacksons, the leading merchanting business in the East Midlands market, delivered good growth in sales and profits despite the competitive trading environment due to an increase in merchanting capacity in the region. Jacksons also expanded its presence in the region with the opening of a second branch in Lincoln and the acquisition of a specialist ironmongery business in Leeds.

    Macnaughton Blair, the leading Northern Ireland merchant, reported a significant improvement in sales and operating profit due to positive market conditions supported by an improving local economy and strong housing market.

    Selco, a trade only warehouse formula which combines traditional merchanting with a modern self service environment, benefited from good levels of demand related to small RMI projects. The five stores opened during 2006 made solid progress and three further stores were opened in the London area increasing the network to twenty stores.

    UK Plumbers Merchanting

    The plumbers merchanting division had a good half year. Increased sales and operating profit were achieved through significant contributions from the six businesses acquired during 2006. The division completed the acquisition of Progress Group in June 2007. Progress is a seventeen branch boiler heating spares business with a strong position in this specialist market. Plumbase extended its market coverage with the opening of two branches.

    UK Mortar

    EuroMix, the market leader in the UK dry mortar market where it trades from nine plants, had a healthy increase in volume due to strong residential, commercial and public sector demand. Despite higher input costs and strong competition, due to the significant increase in capacity in the sector in recent years, the business successfully reported unchanged operating profit for the half year. The Leeds plant which opened in July 2006 traded in line with expectations.

    Operations Review – Republic of Ireland

    Irish turnover increased by six per cent to €628.8 million (2006: €590.7 million) and operating profit increased by six per cent to €60.6 million (2006: €57.1 million). The operating profit margin was unchanged at 9.7 per cent.

    The Irish economy continued to grow strongly in the first half of the year supporting good levels of demand in the Group's merchanting and DIY businesses. Domestic demand was a key driver of growth due to increased disposable incomes and generally positive labour market conditions. Robust growth in the labour force principally reflected net inward migration.

    Although there has been moderation in the level of new residential construction, house completions in the half year were maintained at similar levels to last year. House price pressures eased following a sharp rise in the first half of 2006. Residential repair, maintenance and improvement expenditure was strong, supported by the good momentum in the economy generally and maturing SSIA funds.

    Non-residential orientatedconstruction activity prospered due to infrastructure spending under The National Development Plan combined with buoyant commercial and civils markets.

    Irish Merchanting

    Sales increased by four per cent to €424.2 million (2006: €407.6 million).

    While the half year saw new residential construction activity reasonably in line with the first half of 2006, the division showed solid growth in sales and profit due to the combined strength of the residential RMI market and good growth in the non-residential, commercial and infrastructure construction markets which form a major component of the overall Irish merchanting business.

    The sixty two branch national merchanting business trading mainly under the Chadwicks and Heiton Buckley brands, grew like for like sales by three per cent in a competitive trading environment.

    Chadwicks delivered good organic sales growth due in part to changing the business emphasis to service more positive demand conditions in the RMI market. The performance of the business benefited from a continuing focus on margins, cost cutting and operational efficiencies. The Athlone branch was successfully relocated to a high profile out of town facility continuing the programme of branch relocations designed to increase capacity and improve customer service.

    Heiton Buckley delivered another set of record results with good growth in sales and operating profit. An overall improvement in volumes, pricing and sourcing gains and prudent cost control led to higher operating profit. Geographically, the branches located along the West coast and North West performed strongly, benefiting from a greater exposure to the RMI and one-off house construction markets.

    Trading to date in the Mullingar branch which opened in August 2006 has exceeded expectations and is becoming established as a key operator in the Midlands market. The relocation of the successful Tullamore branch to a facility with an expanded product offering including plumbing and drainage products further consolidated the branches market leading position in the region. The opening of a new Heiton Buckley South Dublin city branch provides the business with a valuable presence within a catchment area which is subject to significant existing and planned development together with an RMI exposure in the South and North Dublin city established residential coastal belt.

    Cork Builders Providers had record results reflecting a moderation in large scheme housing related demand which was more than compensated for by growth in the one-off housing, RMI and civils markets.

    Davies, the Dublin based specialist plumbing, heating and drainage merchant performed well with the benefit of exposure to the civils market. The business introduced a range of specialist drainage products into a number of Heiton Buckley branches, an initiative that offers the prospect of greater exposure to this growth segment of the merchanting market.

    The acquisition of Market Hardware, provides the Group with a strong merchanting presence in Ennis, a rapidly expanding town in the Mid West.

    Heiton Steel traded well in a positive pricing environment and benefited from the end use diversity of its product offering. The business experienced strong demand in the civils, general contracting and agricultural sectors.

    Irish Manufacturing

    Wrights window and door manufacturing business experienced robust demand and focused on cost and operational efficiencies following the commissioning of a new timber window manufacturing plant at the end of last year to meet strong demand.

    CPI's EuroMix division continued to develop its value added product range building on its strong position in the dry mortar market.

    Irish Retailing

    Sales increased by 14.4 per cent to €168.2 million (2006: €147.0 million). The Irish retailing business trading under the Woodie's DIY, Atlantic Homecare and In-House at the Panelling Centre brands, achieved record results with strong growth in sales and operating profit.

    Market conditions were very positive with good volume growth in retail sales against a background of growth in real incomes, positive labour market conditions and the impact of maturing SSIA accounts. The opening of DIY stores has eased following a period of significant capacity expansion in the sector.

    Good volume growth in a strong market resulted in a nine per cent increase in like for like sales.

    Stores opened last year in Castlebar, Co. Mayo; Navan, Co. Meath and Nenagh, Co. Tipperary traded ahead of expectations. A new store in Limerick which opened in July 2007 traded well.

    The Woodie's and Atlantic Homecare support offices were merged during the half year.

    The five store In-House at the Panelling Centre business performed particularly well in a strong market. The business, which markets a range of quality kitchen and bedroom panelling products to trade and retail customers, achieved good sales and profit growth. The four established stores performed strongly and the Galway store, which opened in mid 2006, performed in line with expectations. Expansion of the formatis planned for later this year.

    Finance

    Cash generated by the Group's businesses remained strong and interest cover was very comfortable in the half year at 7.4 times.

    Shareholders' funds increased by €89.5 million exceeding €1.1 billion at 30 June 2007.

    Net debt at 30 June 2007 was €586.5 million equivalent to gearing of 53 per cent (30 June 2006: 60 per cent).

    The total cash outflow on acquisitions and capital expenditure in the half year was €98.1 million. Six bolt-on acquisitions were made at a cost of €41.2 million to expand the Group's position in the UK and Irish merchanting markets. Capital expenditure of €56.9 million reflected routine asset replacement expenditure of €24.7 million and an investment of €32.2 million in organic development initiatives including the opening of ten merchanting branches and branch relocations.

    The Group bought back 500,000 Grafton units on 6 June 2007 at a total cost of €5.75 million. The units purchased will be used to partially cover the Group's obligations under the Grafton Group employee share schemes.

    The Group had a small surplus on its defined benefit pension schemes at 30 June 2007. This arose from an increase in discount rates used to value liabilities and good investment returns which were partially offset by increased life expectancy.

    Outlook

    Trading in July has been satisfactory with continued growth in sales and profit albeit at a lower ratethan in the first half.

    In Ireland, the overall outlook for the economy remains favourable with an easing of growth expected to continue to levels which should remain strong by international standards. Despite lower growth, consumer spending is forecast to be strong over the remainder of the year due to continued growth in real incomes, positive conditions in the labour market and the impact of maturing SSIA accounts.

    Irish new housing, accounting for an estimated one eighth of Group turnover, is expected to continue to decline over the remainder of the year. RMI expenditure, which traditionally is less cyclical, is expected to remain strong due to the strength of domestic demand. The non-residential market is expected to continue to perform strongly due to the significant capital provided for investment in infrastructure and public sector non-residential buildings in addition to a strong pipeline of planning permissions for private commercial, industrial and agricultural buildings.

    The Irish merchanting business should benefit from a continuation of strong activity in the RMI and non-residential construction markets. Strong consumer spending should be supportive of continued good demand in the Irish DIY business.

    The UK economy is in positive shape and is forecast to continue growing at around its long term trend rate. This economic background should be supportive of RMI activity, although the recent round of interest rate increases may lead to some moderation in demand.

    Strong cash generation and a healthy financial position at the end of the half year leaves the Group well positioned to take advantage of suitable acquisition and organic development opportunities. The Group is confident in the quality of its brands and businesses and believes it is well placed to respond to changing market conditions.

    View the full 2007 Interim Results in PDF format.

    Grafton Group plc Trading Update

    Released: 12/07/2007

    Grafton Group plc, the builders merchants and DIY Group with operations in the UK and Ireland, issues this Trading Update for the half year ended 30 June 2007.

    Group turnover for the half year was €1.6 billion, up 12.5 per cent on the same period in 2006. The Group expects strong double digit earnings growth for the period driven by improving returns in the UK and by an ongoing good performance in the context of slower growth in the Irish merchanting market.

    The improved conditions in the UK merchanting market in the second half of 2006 continued into 2007 and like for like sales increased by a mid single digit percentage in the half year. A return to growth in this market has been reflected favourably in Group earnings.

    Although there has been a moderation in the level of new residential construction activity in Ireland, the Group's Irish merchanting business achieved low single digit like for like sales growth in the first six months of the year.

    The Irish DIY business performed strongly, as expected, during the half year. Good like for like sales growth was achieved, supported by high levels of consumer spending. The three stores that were opened during 2006 traded ahead of expectations.

    The Group continued to develop its business base in the half year completing six acquisitions at a cost of c. €42 million and ten branch openings. Five acquisitions with 21 branches were completed in the UK and one branch acquired in Ireland. The acquired businesses have annual sales of c. €60 million.

    Grafton Group has entered the second half of the year in a strong position to deal with a future trading environment that is expected to be more challenging.

    For further information please contact:

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    Grafton Group plc AGM Statement

    Released: 11/05/2007

    At today's Annual General Meeting in Dublin, the Chairman, Mr. Michael Chadwick, will make the following statement:

    "Grafton Group plc is pleased to report strong trading for the four months to the end of April 2007.

    The UK Merchanting business had a very good start to the year continuing the positive trend experienced in the second half of last year. Buoyant conditions in the RMI market were supported by a strong economy and healthy housing market. UK merchanting developments since the start of the year included the completion of three single branch acquisitions and the opening of six new merchanting branches.

    Solid sales growth was achieved in the Irish Merchanting business reflecting moderation in demand in the residential construction market and increased activity in the residential RMI market in a very favourable economic environment. One new branch was added to the Irish merchanting network.

    The improving sales trend in the Irish DIY business which emerged in the second half of 2006 gained further momentum against a background of favourable weather and strong consumer spending.

    The first four months of 2007 have provided a good start to the year and the Group is positive about the overall prospects for its business as it moves into the seasonally stronger trading months ahead."

    For further information please contact:

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    2006 Final Results

    Released: 01/03/2007

    Record Sales, Profits and Earnings

    Grafton Group plc, the builders merchants and DIY Group with operations in the UK and Ireland, announces its final results for the year ended 31 December 2006.

    Financial Highlights

    2006 2005 Change
    Revenue €2.93 Bn €2.63 Bn UP 12%
    Operating profit * €244.9 m €215.9 m UP 13%
    Profit before tax # €249.4 m €192.2 m UP 30%
    Property profit €38.0m €9.6m -
    Basic earnings per share 91.0c 70.3c UP 29%
    Adjusted earnings per share * 78.0c 67.8c UP 15%
    Share purchase 18.75c 15.75c UP 19%
    Cash flow per share 114.3c 91.6c UP 25%
    Gearing 54% 72% -
    * Before property profit and amortisation of intangibles
    # Includes property profit

    Operating Highlights

    • Irish merchanting performed strongly in a favourable market
    • Return to like for like sales and profit growth in UK merchanting market in the second half resulted in growth in full year operating profit
    • Heitons continued to out-perform generating investment returns ahead of expectations
    • Irish DIY business returned to like for like sales growth despite increased competition in sector.
    • Phase one of property disposals completed generating significant profit and cash flow.

    Commenting on the results today, Michael Chadwick, Chairman said:

    "The Group's Irish business produced excellent results in a strong economy. In the UK demand improved in the second half resulting in a higher full-year profit contribution. Business development continued with €159.9 million committed to bolt-on acquisitions and capital spend. Strong cash generation and property disposals left the Group in an exceptionally healthy financial position at year-end and well positioned to take advantage of suitable acquisition and organic development opportunities. The Group is confident about its future prospects of achieving above average returns for shareholders."

    Grafton Group plc reports further growth in sales, profits and earnings per share for 2006.

    Highlights

    • Sales were up 12 per cent to €2.93 billion (2005: €2.63 billion).
    • Operating profit* increased by 13 per cent to €244.9 million (2005: €215.9 million).
    • Property profit of €38.0 million achieved during the year (2005: €9.6 million).
    • Profit before tax up 30 per cent €249.4 million (2005: €192.2 million).
    • Adjusted earnings per share increased by 15 per cent to 78.0 cent (2005: 67.8 cent).
    • Basic earnings per share increased by 29 per cent to 91.0 cent (2005: 70.3 cent).
    • Cash generated from operations and asset disposals was up 28 per cent to €329.5 million (2005: €257.3 million).
    • Strong balance sheet with shareholders funds increasing 25 per cent to exceed €1 billion for the first time
    • Gearing at eight year low while interest cover increased from 7.2 to 9 times
    • Twentieth consecutive year of increased share purchase/dividend payments

    * Before property profit and amortisation of intangibles

    The Group's Irish business delivered excellent results against a background of a strongly performing economy. The UK business traded in a softer market in the first half reporting lower profit but experienced improved demand in the second half leading to an increase in full year profit.

    This is an excellent outcome for the year in view of the less favourable merchanting market in the UK in the first half. The strength of the overall performance is a reflection of the Group's successful strategy of broadening its earnings base and developing strong market positions and brands in the Irish merchanting and DIY markets and in the UK merchanting and mortar markets.

    The acquisition of Heiton Group plc, the Group's largest acquisition to date, in January 2005 provided the Irish merchanting and DIY businesses with a much broader trading and geographic platform in a growth market in Ireland. The results of the business for the past two years have exceeded expectations and the Group achieved its hurdle rate of return on its original investment.

    In the Republic of Ireland, continued high economic growth rates, record levels of house construction and RMI activity together with increased consumer spending were the key drivers of demand in the merchanting and DIY businesses. Strong like for like sales and profit growth in the established Irish business combined with contributions from acquisitions and new stores resulted in a substantial advance in profit. Irish turnover increased by 16 per cent to €1.20 billion (2005: €1.03 billion) and operating profit increased by 21 per cent to €130.4 million (2005: €107.7 million). The Irish business accounted for 41 per cent (2005: 39 per cent) of Group sales and 53 per cent (2005: 50 per cent) of Group operating profit.

    The UK RMI market progressively weakened during 2005 and this trend continued into the first half of 2006 before the market staged a gradual recovery in the second half. The results of the UK business moved generally in line with market conditions with operating profit increasing strongly in the second half as trading in the RMI market gathered momentum. UK turnover increased by 9 per cent to €1.73 billion (2005: €1.60 billion) and UK operating profit increased by 6 per cent to €114.6 million (2005: €108.2 million).

    Development

    The Group continued to actively pursue its long term development strategy based on growth through acquisitions and branch development. The spend on acquisitions was €87.1 million including deferred acquisition consideration relating to prior year transactions of €11.9 million. This was lower than the record expenditure of €477.7 million in 2005 which included €359 million to acquire the remaining 71 per cent of the shares in Heiton Group plc. Capital expenditure on development projects increased to €72.8 million (2005: €56.3 million) and the total spend on acquisitions and development capital expenditure was €159.9 million.

    Sixteen bolt-on merchanting acquisitions were completed in the UK continuing the steady flow of transactions which has over time enabled the Group to build a strong position in the merchanting market. These businesses trade from 27 locations with annual sales of over €120 million. The businesses acquired were well established operations trading from locations which expand and compliment coverage of the UK merchanting market.

    Organic growth initiatives have traditionally been an important element of the Group's development strategy and the pace of activity in 2006 was similar to 2005 with the completion of 18 projects. In the UK, twelve merchanting branches were opened and one new dry mortar plant. In Ireland, three Woodie's DIY stores, one builders merchanting branch and one In House at the Panelling store were opened.

    The addition of the 45 locations, referred to above, to the existing branch network increases the scale and market presence of the Group as well as providing a good basis for further sales and profit improvement in 2007 and beyond.

    Once again in 2006, the trading operations were highly cash generative and the Group ended the year in an exceptionally strong financial position with shareholders funds exceeding €1 billion for the first time. Group gearing of 54 per cent at the year end was at its lowest level since 1998. This leaves the Group with the financial strength to take advantage of suitable acquisition and organic development opportunities which present a good strategic fit and are based on the achievement of acceptable long term returns for shareholders.

    Share Purchase

    The Company purchased one A ordinary share per Grafton Unit for a cash consideration of 8.25 cent which was paid on 18 October 2006. The board approved the purchase of a further A ordinary share per Grafton Unit for a cash consideration of 10.50 cent (2006: 8.50 cent) payable on 28 March 2007.

    The total share purchase payments to shareholders for 2006 amount to 18.75 cent per Grafton Unit. This is an increase of 19 per cent on total share purchase payments for 2005 of 15.75 cent per Grafton Unit. This is the twentieth consecutive year for the Group to increase its share purchase / dividend payment to shareholders and is achieved while maintaining a high level of cover. The increase over last year reflects the strong financial position of the Group and the Board's confidence in its future prospects.

    Board

    As previously announced, the Board appointed Mr. Leo Martin as Chief Operating Officer with overall responsibility for the Group's Irish and UK builders and plumbers merchanting operations with effect from 12 September 2006. The Board also appointed Mr. Roderick Ryan and Mr. Peter Wood as Non-Executive Directors with effect from 15 March 2006 and 1 July 2006 respectively.

    Operations Review – Republic of Ireland

    Irish turnover increased by 16 per cent to €1.20 billion (2005: €1.03 billion). Operating profit increased by 21 per cent to €130.4 million (2005: €107.7 million). The operating profit margin increased to 10.9 per cent (2005: 10.4 per cent).

    The Irish businesses traded at record levels of activity against a positive economic background. The economy grew broadly in line with its long run potential growth rate continuing a period of expansion dating back to the mid 1990's which has been exceptional by European standards. Consumer spending was a key contributor to growth sustained by rising real incomes, lower taxes, employment growth and significant immigration.

    Activity in the construction sector was strong throughout 2006. Investment in the housing market continued at a high level with completions reaching 88,200 units. The rate of growth in house prices eased in the second half in response to rising interest rates and increased supply.

    Non-residential construction also enjoyed very good demand during 2006. In particular, the housing repair, maintenance and improvement sector was very busy. Private and public sector non-residential construction including civil and infrastructural engineering projects also delivered strong volume growth.

    Irish Merchanting

    Sales increased by 18 per cent to €816.6 million (2005: €690.5). The Irish merchanting business delivered another year of good growth in sales and operating profit with the benefit of a strongly performing economy driving demand in the residential, new build and RMI markets. These conditions supported continued high levels of demand in the merchanting sector.

    The performance of Heitons since acquisition in January 2005 has exceeded expectations and the Group achieved its hurdle rate of return on this investment in 2006.

    The overall increase in sales and profitability of the division resulted from good organic growth, acquisition contributions and improved underlying operating profit due to purchasing benefits and tight control of overheads.

    The sixty branch national merchanting chain trading primarily under the Chadwicks and Heiton Buckley brands had healthy volume growth in the housing, RMI and civils sectors. Like for like merchanting sales increased by 8 per cent although the pricing and trading environment remained competitive.

    Chadwicks had an excellent year creating new records for sales and profits. The business benefited from an increased focus on sales growth in the plumbing and heating product category in its specialist Plumb Centre and general merchanting branches. Trading in the Naas, Co. Kildare branch benefited from a major refurbishment and expansion programme.

    The Heiton Buckley business out-performed expectations due to positive market conditions and increased profitability derived from purchasing synergies, a rigorous focus on cost efficiencies, changes in product mix and greater focus on growth in attractive product segments. The business also made progress on the development front relocating the Tralee branch to an out of town purpose built facility and opening a new branch in Mullingar. Trading indications to date have been very encouraging at both locations.

    Cork Builders Providers had a very good year of sales and profit growth with the benefit of a buoyant new build and RMI market in Cork City and also due to expansion of its civils and drainage division. Telfords increased sales and profits in a favourable Midlands market supported by significant investment in the Portlaoise branch.

    The Davies and Garveys businesses, acquired in December 2005, traded ahead of pre-acquisition expectations. Davies, a specialist plumbing, heating and drainage merchant benefited from its exposure to growth in the non-residential and infrastructure markets. The Garvey's general merchanting business reported solid sales growth in its Midlands based RMI market and also benefited from Group purchasing synergies.

    The Heiton Steel stockholding business performed satisfactorily despite a difficult pricing environment. The benefit of good volume growth in a positive market was offset by lower prices and greater competition in the cutting and bending market.

    Sam Hire, the leading player in the small plant and tool hire market, improved market coverage with the opening of branches in Dublin and Mullingar.

    Irish Retailing

    Sales increased by 14 per cent to €311.7 million (2005: €272.6 million). The Irish retailing business, trading under the Woodie's DIY, Atlantic Homecare and In House at the Panelling Centre brands, had a very good year reporting increased sales and operating profit and an improvement in the operating margin. This very positive outcome was achieved despite tougher competition due to a doubling of capacity in the sector over the past three years and higher property costs.

    The business traded against a background of strong volume growth in consumer spending continuing the trend established in 2005. This was sustained by growth in employment and earnings and the impact of maturing SSIA accounts. Consumer spending in the DIY sector was also supported by an increase in the housing stock, rising house prices and equity releases.

    Increased profitability came from a good performance in the established stores and contributions from Woodie's store openings in 2005 and 2006. Like for like sales in the DIY stores were on an improving trend as the year developed and showed low single digit gains for the year. Like for like sales compared even more favourably with the 2005 performance when account is taken of the movement of some business to new Woodie's stores where catchment areas overlap.

    The Woodie's DIY brand has a clear leadership position in the Irish DIY market where it currently trades from 25 stores. The store network was expanded further during 2006 with the opening of new stores in Castlebar, Co. Mayo and Navan, Co. Meath in the first half and in Nenagh, Co. Tipperary in the second half. Store openings in 2005 in Naas, Co. Kildare, Carrickmines, South Dublin and Drogheda, Co. Louth together with the relocated Cork City and Bray, Co. Wicklow stores contributed increased profitability in 2006. The 2005 and 2006 store openings and relocations exceeded trading expectations.

    The sixteen store Atlantic Homecare DIY business successfully increased profit through improved trading from its enhanced ranges and targeted promotions.

    The five store In House at the Panelling Centre business which markets a range of high quality kitchen and bedroom panelling products to trade and retail customers, achieved excellent sales and profit growth due to good market demand in its four established stores boosted by strong consumer spending, significant top up and house mover mortgage activity and the impact of maturing SSIA accounts. A fifth branch was successfully opened in Galway and further expansion of the format is planned.

    Irish Manufacturing

    CPI's EuroMix division increased mortar volumes supplied into a strong residential and commercial construction market in the greater Dublin area and also expanded sales volumes of its value added product range.

    Wrights, a manufacturer of windows and external doors, commissioned a new timber window manufacturing plant prior to the year end to meet a significant increase in demand.

    Operations Review United Kingdom

    UK sales increased by 9 per cent to €1.73 billion (2005: €1.60 billion) and operating profit increased by 6 per cent to €114.6 million (2005: €108.2 million). The UK operating margin declined to 6.6 per cent from the 6.8 per cent recorded in 2005.

    The UK economy continued to provide a favourable background for development of the Group's merchanting and mortar businesses. Growth slowed to below trend in 2005 against the backdrop of interest rate increases. The economy strengthened in 2006 and growth returned to its long term trend rate. UK GDP has now expanded in 58 consecutive quarters, the longest ongoing expansion amongst all OECD countries. So far this decade, the UK has successfully achieved lower inflation and higher growth than most of its major competitors.

    The UK housing market showed a sustained recovery during 2006 with rising property transactions and mortgage approvals and strong growth in house price inflation. The weaker housing market and slow down in consumer spending that occurred in 2005 caused the RMI market to progressively weaken. This weakness continued into the first half of 2006, although market conditions improved in the second quarter and the pickup in activity was sustained over the second half. Against this background, like for like sales were down 1.7 per cent in the first half but grew at a similar rate in the second and were marginally ahead for the year.

    Operating profit declined by 8 per cent in the first half due to the combined effect of a weaker market and a demanding comparative result but increased by 20 per cent in the second half in a recovering market. The stronger trading performance in the second half enabled the business to achieve operating profit growth of 6 per cent for the year. The operating profit margin was 7.2 per cent in the second half, up from 6.7 per cent in the comparative half year.

    UK Builders Merchanting

    Buildbase had a satisfactory year reporting similar profits. Sales increased due to acquisitions and new branch openings in 2005 and 2006.

    Heitons UK business and the Group's heavyside merchanting branches were successfully integrated into a newly formed Buildbase Civils and Lintels division which was established to more effectively focus on the civil engineering and ground works contracting market. Five bolt-on acquisitions completed in 2005 were integrated into the Buildbase branch network. Four branches at Erith, Greater London; Gloucester, Gloucestershire; Stevenage, Hertfordshire and Haverhill, Suffolk were relocated to modern purpose built facilities and major refurbishment was undertaken at the Rotherham, South Yorkshire and Sandy, Bedfordshire branches. A number of smaller branch redevelopment projects were also completed.

    Buildbase acquired four businesses trading from eleven branches including Fleming Holdings, the leading independent builders and timber merchant trading from eight branches in Scotland. A second Buildbase branch was opened in Oxford and since the year end two new branches were opened at Melksham, Wiltshire and Stowmarket, Suffolk.

    Jacksons, a long established regional merchanting business with a leadership position in the East Midlands market, grew profits despite subdued trading conditions in an increasingly competitive market. Profit growth was attributed to improved sourcing arrangements and tight control of costs in all areas. The business also expanded its position in the East Midlands market completing three bolt-on acquisitions trading from five locations.

    Macnaughton Blair, Northern Ireland's leading merchanting business, achieved another year of strong sales and profit growth due to an improvement in the underlying business and the impact of acquisitions. The business was well placed to benefit from an improving local economy and exposure to a housing market which outperformed all other regions of the UK in 2006. The Houtman and MFBP acquisitions completed in 2005 achieved early success reporting profits well ahead of pre-acquisition levels. Two small acquisitions undertaken in the second half had a very limited impact on the results but give the business an initial presence and platform for future growth in Larne and Lisburn, Co. Antrim. Macnaughton Blair traded from sixteen branches at the year end.

    Selco, a trade-only warehouse formula combining traditional merchanting with a modern self-service environment, is focused on supplying trades people involved in small RMI projects. Five new stores were opened in 2006 increasing the network to seventeen. The new stores are located in London, Manchester and Reading.

    UK Plumbers Merchanting

    Plumbase is the UK's fourth largest plumbers merchanting chain with a network of 179 branches concentrated in the South East, West Country, Midlands, East Anglia and Scotland.

    Good sales and operating profit growth was achieved through a significant contribution from the seven businesses acquired during 2005 and organic growth. Underlying profit increased against an improving trading background as the year developed and due to measures taken to reduce overheads.

    Market coverage by Plumbase improved with the acquisition of four businesses trading from six branches and the opening of six new branches.

    UK Mortar

    EuroMix manufactures a range of mortars for use in block and brick laying. The business supplies key residential, commercial and public sector construction projects from its network of nine plants in England and Scotland. EuroMix has a clear leadership position in the UK dry mortar market and has established a significant reputation as a preferred supplier due to the quality of its range of mortars and customer support.

    EuroMix strengthened its market position with good sales and volume growth. Operating profit was lower as the business was unable to recover energy related raw materials and distribution price increases due to more intense competition in the sector. Significant capacity has come on stream since Grafton pioneered the use of on-site dry mortar technology in the late 1990's and the market is now moving towards a more mature stage in its development. The Bristol plant which opened in mid 2005 traded in line with expectations and full coverage of the market in England was achieved in July with the opening of the ninth plant near Leeds.

    Finance

    The merchanting, DIY and manufacturing businesses yet again produced strong profits and cash flow and the Group ended the year in a very healthy financial position. The Group operating profit margin increased to 8.3 per cent (2005: 8.2 per cent). Cash flow generated from operations and asset disposals amounted to €329.5 million (2005: €257.3 million) substantially outperforming the previous year.

    Control of working capital continued to be a high priority across the Group and the related investment moved in line with the increasing scale of the Group's operations.

    Shareholders' funds increased by €200.5 million (25 per cent), exceeding €1 billion for the first time. The increase arose from the retention of after tax profit net of the €39.9 million returned to shareholders through the purchase of two A ordinary shares per Grafton Unit.

    The total cash outflow on acquisitions and capital projects was €199.6 million (2005: €571.5 million). Sixteen bolt on acquisitions involved an investment of €75.2 million (2005: €470.9 million) in the UK merchanting business. Capital expenditure increased to €124.4 million (2005: €100.6 million) reflecting routine replacement expenditure of €51.6 million and investment of €72.8 million in the branch network across the Group including the opening of 17 new branch locations and a mortar plant together with initiatives intended to meet customer demand and support the continued profitable development of Group locations in the UK and Ireland.

    Net borrowings at 31 December 2006 were €550.9 million (31 December 2005: €584.2 million) equivalent to a gearing ratio of 54 per cent (31 December 2005: 72 per cent). Interest cover was 9.0 times (2005: 7.2 times)

    Pension administration was streamlined with the merger of eight defined benefit schemes in both Ireland and the UK. In association with these mergers, a special contribution of €17.5 million (€14.1 net of tax) was made to the Group's defined benefit schemes. The deficit (after deferred tax) on the Group's defined benefit pension schemes reduced to €27.3 million (31 December 2005: €48.4 million). On an ongoing IFRS basis, the overall assets in the Group's defined benefit pension schemes represent 87 per cent of accrued liabilities (31 December 2005: 75 per cent). This improvement is a result of the special contribution, good investment returns achieved during the year and an increase in the discount rates used to value liabilities which are based on very volatile AA Corporate Bond Rates. The positive impact of these factors was partially offset by an allowance for increased life expectancy.

    This was the Group's sixth consecutive year to report property profits. Significant value and cash flow was realised from the disposal of four properties in Ireland and four in the UK. These included three properties acquired with the Heiton Group including the Atlantic Homecare property in Stillorgan, Co. Dublin. The Group also realised part of its joint venture development of Blackwater Retail Park in Navan, Co. Meath where Woodie's DIY is anchor tenant. The profit on disposal of properties was €38.0 million. Total proceeds receivable from all asset disposals amounted to €77.7 million.

    Outlook

    Trading since the start of the year in the seasonally quieter winter months has been satisfactory

    In Ireland, growth in the economy is forecast to remain strong in 2007. Expansion should be underpinned by increased consumer spending supported by continued growth in employment and earnings. Disposable incomes will also be boosted by the impact of maturing SSIA accounts and lower taxes.

    Some softening from current record levels of house building is generally expected in 2007 as activity in the sector moderates over time to more sustainable long term levels. A healthy economy, favourable demographics and a more modest pace of growth in house prices should continue to support good underlying demand.

    The repair, maintenance and home improvement market in Ireland is expected to remain buoyant against a background of strong consumer spending. The strong economy has boosted activity in the commercial and industrial new build sector where investment is expected to remain robust. The National Development Plan should continue to underpin a high level of capital investment in infrastructure and other public sector projects.

    Against this very positive economic background, the Heiton Buckley and Chadwicks merchanting businesses should continue to benefit from anticipated stable demand in the residential construction market and growth in the RMI market. High levels of consumer spending and a slowdown in new capacity in the Irish DIY market should enable the Woodie's DIY and Atlantic Homecare businesses to make further progress and also to benefit from last years store openings in Castlebar, Navan and Nenagh.

    In the UK, the economy is forecast to grow at around trend rate in 2007. The improvement in the RMI market over the second half of 2006 is expected to continue with the benefit of a strong housing market. The level of mortgage approvals and housing transactions, lead indicators of RMI demand, is also encouraging. The fundamentals of the RMI market are firm, supported by a stable economy, solid underlying demand, consumer confidence and employment growth. These factors should sustain good levels of RMI activity although the recent round of interest rate increases may lead to some moderation in demand.

    The focus of the UK merchanting business will be on the continued integration of acquisitions made in 2006 and on achieving scale related synergies in the overall business. The Group also expects to benefit from its relatively healthy pipeline of potential acquisition and organic growth opportunities. Competitive conditions in the UK mortar market are expected to continue in a growing market as new mortar plants mature.

    The Group is confident about its future prospects and continues to pursue a consistent strategy, based on the achievement of above average long-term returns, which has rewarded shareholders over the past two decades.

    View the full 2006 Final Results in PDF format.

  • 2006
    Date Title
    20 December 2006 Trading Update for the 11 months to 30 November 2006
    13 November 2006 Interim Results For the Six Months Ended 30 June 2006
    14 July 2006 Trading Update for the Six Months Ended 30 June 2006
    08 May 2006 Statement by the Chairman, Mr. Michael Chadwick, to the Annual General Meeting
    08 May 2006 Appointment of Non Executive Director
    03 May 2006 Annual Information Update ('AIU')
    15 March 2006 2005 Final Results
    13 January 2006 Trading Update

    Trading Update for the 11 months to 30 November 2006

    Released: 20/12/2006

    The trading environment continued to be favourable in Ireland during the period and like for like sales continued to grow in high single digits. In the UK, as expected, the Group experienced an improving trend in like for like sales growth, which overall was in low single digits, and resulted in an improved UK operating margin during the period.

    Group earnings for 2006 are expected to be in line with market expectations.

    To date this year 16 acquisitions have been completed in the UK (nine since the end of June 2006) for a total consideration of circa €80 million. These acquisitions have added 27 branches to the Group's network in the UK and had an annualised turnover in excess of €120 million.

    The organic expansion of the Group continued with the successful opening of six new builders merchants, six new plumbers merchants and a ninth dry mortar plant in the UK. In Ireland, the Group opened three new Woodie's DIY superstores, one builders merchant and a new In-House at the Panelling Centre location. The acquired and organically opened branches bring the number of Group trading locations to over 520.

    The Group continued its property disposal programme during the second half of the year and now expects to report profits on disposals, including the previously reported Atlantic Stillorgan property, in excess of €33 million for the year.

    Further organic growth is planned for 2007 with the development of brownfield locations in the UK and new DIY store openings in Ireland. In addition, the Group continues to evaluate a healthy pipeline of potential acquisitions.

    Ends 20th December 2006

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    Interim Results For the Six Months Ended 30 June 2006

    Released: 13/09/2006

    Record Sales, Profits and Earnings

    Grafton Group plc, the builders merchants and DIY Group with operations in the UK and Ireland, announces its interim results for the six months ended 30 June 2006.

    Financial Highlights

        2006 2005 Change
    Revenue   €1.43 bn €1.30 bn UP 10%
    Operating profit*   €106.9 m €97.6 m UP 10%
    Profit before tax   €118.3 m €87.4 m UP 35%
    Basic earnings per share   42.8 c 32.0 c UP 34%
    Adjusted earnings per share *   33.0 c 30.2 c UP 9%
    Share purchase   8.25 c 7.25 c UP 14%
    Cash flow per share   53.6 c 42.2 c UP 27%
    *Before property profit and amortisation

    Operating Highlights

    Irish merchanting traded strongly in a favourable market

    Heitons continued to perform ahead of pre-acquisition expectations

    Lower UK profitability in softer merchanting market

    UK market now strengthening

    Positive trading conditions in competitive Irish DIY market

    Operations strongly cash generative

    Commenting on the results today, Michael Chadwick, Executive Chairman said:

    "The Irish economy provided a very favourable trading environment for the Group's Irish merchanting and DIY businesses in the half year and profitability increased strongly. In line with the trends experienced in the second half of 2005, demand in the UK merchanting market was generally softer in the half year compared with the strong trading levels reported in the first half of 2005. The Group remains confident of continued growth in profits and earnings per share in 2006 and, with a very strong financial position and healthy cash flow, is well placed to take advantage of suitable acquisition and development opportunities."

    View the full press release in PDF format.

    Trading Update for the Six Months Ended 30 June 2006

    Released: 14/07/2006

    Group turnover for the first six months of 2006 exceeded €1.4 billion and Group earnings continue to be in line with market expectations.

    As expected, the favourable trading environment in Ireland continued to compensate for the softer trading conditions experienced by the Group in the UK. Increased like for like sales in the Irish merchanting business were driven by good growth in both Chadwicks and Heiton Buckley. Davies and Garvey's, the two Irish merchanting businesses acquired in December 2005, showed positive growth in their first full six months trading under Group ownership. The Group experienced a slower start to the retail season in its Irish DIY businesses but recent trading has been stronger. New DIY stores opened in Castlebar and Navan during the period are performing in line with Group expectations.

    Group turnover in the UK was over €800 million for the six months. However, as previously indicated, like for like sales were modestly down on the comparatively strong first six months of 2005. UK macro economic indicators have been positive for the RMI sector for some time and UK merchanting sales were relatively stronger in the second quarter compared to the first quarter. The UK mortar market continues to grow although it remains very competitive.

    The Group continued to grow organically in the first half, opening ten outlets - two Irish DIY stores and eight merchanting branches in the UK.

    Seven acquisitions were completed in the UK during the six month period for a total consideration of €35 million. These added 16 branches, expanding the Group's branch network to over 500 trading locations. The businesses acquired included Fleming Holdings Limited, the leading independent Scottish Builders and Timber Merchant with eight branches.

    The Group has continued its property disposal programme and expects to report profits on disposals, including the Atlantic Stillorgan property, in excess of €25 million for the period.

    The Irish merchanting and DIY markets remain strong. Recent trends in UK merchanting suggest an improvement in trading during the second half. The Group remains confident of continued growth in profits and earnings per share in 2006 and is well placed to participate in further consolidation of the Irish and UK merchanting markets and to take advantage of organic growth opportunities.


    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    Statement by the Chairman, Mr. Michael Chadwick, to the Annual General Meeting

    Released: 08/05/2006

    Grafton Group is pleased to report that trading for the four months to the end of April 2006 has been in line with Group expectations.

    The Irish Merchanting business has had an excellent start to the year continuing to benefit from the very favourable economic environment and record levels of activity in the residential construction and repair and maintenance markets. Like for like sales growth has been strong across the Chadwicks and Heiton Buckley branch networks. Davies and Garvey's, which were acquired at the end of 2005, are performing ahead of pre-acquisition expectations.

    DIY continues to be a strong growth segment of the Irish retail market. Although the sector remains competitive, due to the recent significant increase in DIY stores, the Group has continued to grow its DIY sales. The new Woodie's DIY store in Castlebar has traded satisfactorily.

    The UK Merchanting market continues to reflect the softer trading conditions being experienced in the construction sector in the UK. It is anticipated that first half sales in the UK will be up although, as previously indicated, like for like sales will be below the levels achieved in the first half of 2005. The improving macro economic data emerging in the UK should be positively reflected in Group trading in the second half of the year. Developments since the start of the year in the UK involved the completion of four bolt-on acquisitions trading from six locations and the opening of six merchanting branches.

    The Group continues to be confident about the prospects for its Irish and UK businesses and is well placed to participate in the further consolidation of the UK and Irish Merchanting markets.

    Ends  

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    Appointment of Non Executive Director

    Released: 08/05/2006

    Grafton Group plc is pleased to announce the appointment of Mr. Peter Wood (59) as non-executive director with effect from 1 July 2006. Mr. Wood, a Chartered Accountant by profession, was Chief Executive of Ellis & Everard plc, the Chemical Distribution Group, from 1993 to 2000 and was responsible for the development of the business from its UK base into the US and European markets. He was Chief Executive of BSS Group plc, a UK distributor of heating and plumbing products, from 2001 to 2005. He is currently Non-Executive Chairman of White Young Green plc and a Non-Executive Director of Yule Catto plc and RPC Group plc.

    There is no information to disclose under Listing Rule 6.6.13 in respect of Mr. Peter Wood.

    Ends  

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    Annual Information Update ('AIU')

    Released: 03/05/2006

    Grafton Group plc (the 'Company') published its Annual Report on 3rd April 2006. This annual information document has been prepared by the Company in accordance with the provisions of Part 11 of the Prospectus (Directive 2003/71/EC) Regulations 2005 (S.I. No 324 of 2005) and has been submitted to the Irish Stock Exchange for filing with the Irish Financial Services Regulatory Authority (the Financial Regulator) in accordance with the provisions of the Prospectus Rules issued by the Financial Regulator. The Company is also publishing this AIU via a Regulatory Information Service today and making it available in the Investors section of its website, www.graftonplc.com, under News and Events.

    List of Announcements and Filings

    The following is a list of all announcements and filings of a regulatory nature, in the previous 12 months, together with the date of the release. This includes all announcements and filings made under the rules of the Irish Stock Exchange and the UK Listing Authority and all Companies Registration Office filings during the period, which are listed separately from the market filings.

    (i) Regulatory announcements and filings made to the Irish Stock Exchange and UK Listing Authority via a Regulatory Information Service

    09-May-05 AGM Statement
    10-May-05 Director Shareholding
    11-May-05 Director Shareholding
    12-May-05 Director Shareholding
    17-May-05 Director Shareholding
    31-May-05 Director Shareholding
    01-Jun-05 Secretary Shareholding
    10-Jun-05 Director / Secretary Shareholding
    10-Jun-05 Holding in Company
    22-Jun-05 Trading Update Notification
    27-Jun-05 Private Placement
    06-Jul-05 Trading Statement
    06-Jul-05 IFRS Restatement
    12-Jul-05 Director Shareholding
    14-Jul-05 Block Listing Review
    15-Aug-05 Director/PDMR Shareholding
    31-Aug-05 Retirement
    13-Sep-05 2005 Interim Results
    13-Sep-05 Notice to Holders of Grafton Units
    03-Oct-05 Director Declaration
    25-Oct-05 Secretary/PDMR Shareholding
    25-Oct-05 Director/PDMR Shareholding
    26-Oct-05 Holding in Company
    01-Dec-05 Director/PDMR Shareholding
    05-Dec-05 Acquisitions
    15-Dec-05 Director/PDMR Shareholding
    16-Dec-05 Director/PDMR Shareholding
    20-Dec-05 Brochure of Particulars
    11-Jan-06 Trading Update Notification
    13-Jan-06 Trading Update
    01-Mar-06 Director Shareholding/PDMR
    15-Mar-06 2005 Final Results
    15-Mar-06 Notice to Holders of Grafton Units
    15-Mar-06 Appointment of Non-Executive Director
    27-Mar-06 Director/PDMR Shareholding
    27-Apr-06 Block Listing Review

    (ii) Companies Registration Office Filings

    Date Submission
    16-Feb-05 B5 - Allotments of Shares
    16-Feb-05 B5 - Allotments of Shares
    16-Feb-05 B5 - Allotments of Shares
    16-Feb-05 B5 - Allotments of Shares
    16-Feb-05 B5 - Allotments of Shares
    16-Feb-05 B5 - Allotments of Shares
    25-Feb-05 B5 - Allotments of Shares
    13-Jun-05 G1 - AGM General Resolution
    13-Jun-05 G1 - AGM Ordinary Resolution
    13-Jun-05 G1 - AGM General Resolution
    13-Jun-05 G1 - General Resolution
    13-Jun-05 G1 - AGM General Resolution
    29-Aug-05 B5 - Allotments of Shares
    29-Aug-05 B5 - Allotments of Shares
    29-Aug-05 B5 - Allotments of Shares
    29-Aug-05 B5 - Allotments of Shares
    29-Aug-05 B5 - Allotments of Shares
    29-Aug-05 B5 - Allotments of Shares
    23-Sep-05 B5 - Allotments of Shares
    23-Sep-05 B5 - Allotments of Shares
    23-Sep-05 B5 - Allotments of Shares
    23-Sep-05 B5 - Allotments of Shares
    23-Sep-05 B5 - Allotments of Shares
    23-Sep-05 B5 - Allotments of Shares
    23-Sep-05 B5 - Allotments of Shares
    23-Sep-05 B5 - Allotments of Shares
    23-Sep-05 B5 - Allotments of Shares
    23-Sep-05 B5 - Allotments of Shares
    13-Oct-05 Accounts
    24-Oct-05 B1 - Annual Return
    24-Jan-06 B5 - Allotments of Shares
    24-Jan-06 B5 - Allotments of Shares
    24-Jan-06 B5 - Allotments of Shares
    24-Jan-06 B5 - Allotments of Shares
    24-Jan-06 B5 - Allotments of Shares
    21-Mar-06 B5 - Allotments of Shares
    21-Mar-06 B5 - Allotments of Shares
    21-Mar-06 B5 - Allotments of Shares
    31-Mar-06 Accounts

    Availability of the full text of Announcements and Filings

    Details of all regulatory announcements are available on the websites of the Irish Stock Exchange and the London Stock Exchange. Copies of any filings made with the Companies Registration Office will be available from the Companies Registration Office.

    Accuracy of Information

    The information referred to in this update was up to date at the time the information was published but some information may now be out of date.

    Contact:

    Charles Rinn
    Secretary
    Grafton Group plc
    Tel: 00 353 1 2160600

    2005 Final Results

    Released: 15/03/2006

    Record Sales, Profits and Earnings

    Grafton Group plc, the builders merchants and DIY Group with operations in the UK and Ireland, announces its final results for the year ended 31 December 2005.

    Financial Highlights

      2005 2004 Change
    Revenue €2.63 Bn €1.87 Bn UP 40%
    Operating profit * €215.9 m €159.5 m UP 35%
    Profit before tax €192.2 m €145.8 m UP 32%
    Basic earnings per share 70.3 59.1 UP 19%
    Earnings per share before amortisation
    of intangibles and property profit
    67.8c 56.1c UP 21%
    Share purchase / redemption 15.75c 13.0c UP 21%
    Cash flow per share 91.6c 75.4c UP 21%
    *Before property profit and amortisation of intangibles      

    Operating Highlights

    • Irish merchanting traded strongly aided by positive market conditions
    • Heitons performed comfortably ahead of pre-acquisition expectations
    • UK profitability maintained in a challenging market
    • Store openings increase competition in Irish DIY market
    • Record acquisition and development activity in 2005

    Commenting on the results today, Michael Chadwick, Chairman said:

    “Profits advanced significantly in Ireland with out-performance by Heitons and strong organic growth in merchanting. Trading conditions in the UK weakened during the second half and the overall UK profit outcome was in line with the previous year. In Ireland the market outlook continues to be strong, although conditions remain very competitive especially in the DIY sector. Recent economic data in the UK is encouraging with improving consumer confidence and a gradual recovery in the RMI market is forecast for the second half of 2006. The Group expects to benefit from a healthy pipeline of acquisition and organic growth opportunities.”

    Grafton Group plc reports strong growth in sales, profits and earnings for 2005. This was the Group's fourteenth consecutive year of record results and also marked completion of the Heitons acquisition, a significant strategic move and the Group's largest acquisition to date.

    Highlights

    • Sales were up 40 per cent to €2.63 billion (2004: €1.87 billion).
    • Operating profit increased by 35 per cent to €215.9 million (2004: €159.5 million).
    • Adjusted earnings per share increased by 21 per cent to 67.8 cent (2004: 56.1 cent).
    • Basic earnings per share increased by 19 per cent to 70.3 cent (2004: 59.1 cent).
    • Cash generated from operations was up 26 per cent to €224 million (2004: €178 million).
    • Heiton Group plc, acquired in January 2005, contributed €48.8 million to Group operating profit for 2005.

    There was a significant advance in Irish profit for 2005 due to the Heiton acquisition and strong organic growth in the Group's established Irish merchanting operations. Trading conditions in the UK weakened as the second half developed and overall UK profit for the year was in line with 2004.

    The results for 2005 demonstrate the benefit to our shareholders of rebalancing of the Group's operations between the UK and Ireland with stronger profits in Ireland compensating for the slow down in the UK market. The Group's consistent strategy of broadening its earnings base and developing strong market positions and brands in the UK and Ireland enabled the achievement of new record levels of sales, profits and earnings in 2005.

    Completion of the acquisition of Heiton Group plc on 7 January 2005 substantially increased the scale of the Group's operations with Irish turnover more than doubling to exceed €1 billion. The acquisition consolidated the Group's market leadership position in the Irish builders merchanting and DIY markets. Heitons performed strongly in 2005 comfortably outperforming pre-acquisition expectations. The Group absorbed the Heiton businesses with a smooth transition on change of ownership to Grafton.

    In the Republic of Ireland, the economy grew strongly and provided a very positive backdrop for record levels of residential construction and RMI activity. Irish turnover increased by 129 per cent to €1,033 million (2004: €452 million) and operating profit increased by 110 per cent to €107.7 million (2004: €51.4 million). An almost full year contribution from Heitons, strong like for like sales growth in the established merchanting business and new store openings in the DIY business resulted in a significant increase in Irish sales and operating profit compared to 2004. The Irish businesses accounted for 39 per cent (2004: 24 per cent) of Group turnover and half (2004: 32 per cent) of Group operating profit for the year.

    After a good start to the year, the performance of our UK business was influenced by a slowing UK economy. Despite a more difficult economic background, which led to more subdued demand in the repair, maintenance and improvement market, sales increased by 12 per cent to €1.60 billion (2004: €1.42 billion) and operating profit of €108.2 million matched the record level achieved in 2004.

    Development

    To date the Group's successful acquisition strategy has been primarily based on the completion of small and medium sized bolt-on transactions. The successful acquisition of Heitons, a business turning over €608 million from 67 branches, demonstrated the Group's ability to undertake large transactions which are a good strategic fit and deliver shareholder value. The Group continued to benefit from a steady flow of bolt-on acquisitions in recent years completing sixteen transactions in 2005. In the UK, the Group acquired fourteen builders and plumbers merchanting businesses trading from nineteen branches with annual sales of €85 million. These transactions primarily improve our market coverage in the North West and South East. In Ireland, in addition to the Heiton transaction, the Group acquired two businesses, trading from three branches with annual sales of €47 million, which provided the Group with a significant opportunity to expand its product portfolio and geographic coverage in the builders and plumbers merchanting market.

    The Group continued its strategy of developing organically completing nineteen projects with the opening of fourteen merchanting branches and a new dry mortar plant in the UK and four DIY stores in Ireland.

    The 2005 acquisition program together with organic developments substantially increased the scale of the Group's operations, improved our market positions and provided a sound platform for the continued long term development of the Group. In January 2006 the Group acquired the remaining shares in Heiton's Polish business.

    The Group used its healthy cashflow from operations and strong balance sheet to fund its record spend of €571.4 million (2004: €173.80 million) on acquisitions and capital projects while retaining financial strength and balance sheet flexibility to continue to implement the Group's ongoing development strategy.

    Share Purchase

    The Company purchased one A ordinary share per Grafton unit for a cash consideration of 7.25 cent paid on 7 October 2005. The Board has decided to purchase a further A ordinary share per Grafton unit for a cash consideration of 8.5 cent payable on 31 March 2006.

    The total share purchase payments to shareholders for 2005 amount to15.75 cent per Grafton Unit, an increase of 21 per cent on total share purchase / redemption payments for 2004 of 13 cent per Grafton Unit.

    Board

    The Board is pleased to announce the appointment of Roderick Ryan (49) as a non-executive Director. Mr. Ryan is a Chartered Accountant by profession and Group Executive Director of Glen Dimplex. He was formerly Managing Partner of Arthur Andersen in Ireland and, as a member of the European Executive Committee, he directed the industry section of Andersen's practice in the European Area. The Board is at an advanced stage in the appointment of a further non-executive Director.

    International Financial Reporting Standards

    The results for 2005 have been prepared in accordance with the Group's policies under International Financial Reporting Standards (IFRS). The transition date for implementation of IFRS by the Group was 1 January 2004. The financial statements for the year ended 31 December 2004, which were prepared in accordance with accounting practices generally accepted in the Republic of Ireland, have been restated under IFRS with effect from the transition date.

    Full details of the accounting policies adopted by the Group on implementation of IFRS were published on 6 July 2005 and are available on the Group's website www.graftonplc.com.

    Operations Review – United Kingdom

    UK sales increased by 12 per cent to €1.60 billion (2004: €1.42 billion) and operating profit was in line with last year's record level of €108.2 million. The operating margin declined to 6.8 per cent (2004: 7.6 per cent).

    The UK has been a very favourable trading and operating environment since the mid 1990s enabling the Group to develop leading positions in the merchanting and mortar markets. The performance of the UK economy has been impressive over this period. Growth slowed however to 1.7 per cent in 2005 which, although below trend in the toughest year for the economy since the mid 1990's, was higher than growth in both the Euro area and European Union.

    A series of interest rate rises, at a time of historically high household debt, and a slow down in the housing market weakened consumer confidence and the pace of consumer spending slowed. There was also a fall in the volume of property transactions and a drop in mortgage equity withdrawal. The combined effect of these factors reduced activity in the RMI market particularly during the second half of the year. This is the principal end-use market for the Group's merchanting sales.

    The Group's like for like UK merchanting sales were flat in 2005 compared to an increase of 6.5 per cent in 2004. The increase in first half like for like sales was reversed in the second half in a weaker market. The increase in overall UK sales in 2005 was derived from acquisitions and branch openings in 2004 and 2005. In a more difficult trading environment the Group successfully maintained UK operating profit in line with the previous year.

    Consolidation in the UK merchanting market continued in 2005 and the Group actively participated in that process acquiring fourteen builders and plumbers merchanting businesses trading from nineteen branches. Our presence in the UK merchanting market was further strengthened by Heiton's UK business, a six branch specialist drainage and ground engineering business, and the opening of fourteen greenfield branches. The UK merchanting network ended the year trading from 349 locations.

    UK Builders Merchanting

    The UK Builders merchanting division had a satisfactory year increasing sales and operating profit with the benefit of acquisitions. Sales in the second half of the year trended lower in line with weakening conditions in the RMI market.

    Seven single branch merchants were acquired and a further six branches were added from the Heiton deal. Six greenfield branches were opened increasing the divisions trading locations to 182 by the year end.

    Buildbase increased sales and profit in a less buoyant and more competitive market place. The impact of lower volumes was partly mitigated by successfully implementing cost reduction and efficiency measures. At the end of its tenth year of trading Buildbase is now a key player in the UK merchanting market having successfully developed primarily through acquisition. More recently Buildbase has in addition grown its network by greenfield developments including four branch openings in 2005. Tool and equipment hire centres, trading as Hirebase, were added to eight branches.

    Jacksons, one of the UK's leading regional merchanting brands with a major presence in the East Midlands market, had a successful second full year as part of the Group.

    In Northern Ireland, Macnaughton Blair, the leading merchant in the province where it trades from thirteen branches, increased sales and operating profit. Market conditions in the province continued to be favourable. The builders merchanting branch in Coleraine, acquired in 2004, was relocated to a new purpose built facility in the town. Macnaughton Blair acquired MFBP, a leading builders merchanting business on the Isle of Man and Houtman, a long established scaffolding business based in Belfast.

    UK Plumbers Merchanting

    Plumbase is the fourth largest plumbers merchanting chain in the UK with a strong branch presence in the South East, West Country, Midlands, East Anglia and Scotland. Market conditions were demanding for the business in 2005. Like for like sales were down for the year but our confidence in the longer term prospects for the business was demonstrated with the acquisition of seven plumbers merchanting businesses trading from twelve locations and the opening of eight greenfield branches increasing the network to 167 locations by the year end. Cost saving measures and margin improvement partially offset the impact on profit of lower volumes in the established branch network. Plumbase bathroom showrooms and the non-trade element of the business were more exposed to the slowdown in retail sales as consumer demand for housing and RMI related products weakened.

    UK Mortar

    EuroMix, the market leader in the supply of dry mortar trades from a network of eight dry mortar manufacturing plants, produces a range of quality mortars for use in block and brick-laying. EuroMix supplies the major national and regional building and construction companies involved in residential and commercial construction projects across England and Scotland. During the year the business expanded its range of value added products including bagged products and sprayed renders.

    The business had to contend with lower activity in the new housing market, higher raw materials and transport costs and a more competitive trading environment. EuroMix increased sales due to a strong performance in the Harlow and Southampton plants, both of which continue to develop their market position, and the opening of a plant near Bristol in July to service demand in the West Country. The business reported a small decline in operating profit due to a more competitive market and higher input costs.

    Operations Review – Republic of Ireland

    Irish turnover increased by 129 per cent to €1,033 million (2004: €452 million). Operating profit increased by 110 per cent to €107.7 million (2004: €51.4 million). The operating profit margin was 10.4 per cent (2004: 11.4 per cent). The overall reduction in margin reflected an increased margin in the established merchanting business and margin dilution arising from integration of the lower margin, heavy end market emphasis of the Heiton business.

    The Irish economy has been one of the fastest growing economies in the developed world for well over a decade. In recent years the rate of growth has moderated in line with the economy's long term growth potential estimated at 4/5 per cent but is still significantly ahead of the average growth rate in the Euro area and EU. The growth profile of the economy changed in 2005 with strong growth in exports, a pick up in consumer spending and greater infrastructure and business investment. Consumer spending is believed to have been the principal source of economic growth in the year increasing by more than 5 per cent and supported by solid growth in incomes and employment. Job creation was at record levels with total employment reaching 2 million due to strong immigration from the new EU member states.

    The construction sector in Ireland continued to be very buoyant in 2005. The rate of growth in residential construction slowed, as widely anticipated, to around 5 per cent with house completions for the year at a record 81,000 units (2004: 77,000 units). The strong increase in employment and the population has created a new stream of demand in the residential property market.

    Irish Merchanting

    2005 was an excellent year for the Group's Irish builders merchanting division with sales up 141 per cent to €690.5 million (2004: €286.1 million). The acquisition of Heiton's in January 2005 substantially strengthened the Group's builders merchanting interests in Ireland and consolidated Chadwicks and Heitons position as the largest builders merchanting business in the Irish market.

    The Heiton Buckley network of 25 branches is a unique fit with Chadwicks 31 branches with limited overlap and provides the Group with a presence in towns and cities across the country where Chadwicks was not previously represented including Cork City and along the Western Seaboard. Heitons Irish merchanting operations also incorporate Heiton Steel, Ireland's largest steel stockholding business, and Sam Hire, the leading player in the small plant and tool hire business trading from 14 branches.

    The Irish residential construction and repair and maintenance markets performed strongly throughout 2005 aided by low interest rates, high levels of job creation and strong growth in real disposable incomes. This very positive macro economic background was strongly supportive of sales and profit growth in the Irish merchanting business.

    Heitons merchanting business performed strongly making an operating profit contribution well ahead of pre-acquisition expectations. Chadwicks the Group's core merchanting business also had an exceptional year. Like for like sales in the Heiton Buckley and Chadwicks merchanting branches were up 7 per cent for the year. While both merchants enjoyed good volume growth, there was vigorous competition in the market from the national chains and independents.

    Cork Builders Providers and Telfords, two strong regional merchants, produced excellent results for the year increasing sales and operating profit strongly.

    The performance of Heiton Steel in 2005 was influenced by a fall in steel prices internationally. The business successfully managed its response to the fall in prices achieving very solid profitability in line with its long term trend performance.

    Heitons Sam Hire business achieved significant profit improvement due primarily to operating cost reductions. The business opened its fourteenth branch at Santry, Dublin and relocated its Naas Road, Dublin branch to Tallaght during 2005. Three further branch openings in Dublin, Mullingar and Tullamore are planned for 2006.

    The Heiton and Chadwicks management teams worked closely and successfully to realise substantial purchasing and overhead efficiencies in 2005 which will benefit the Group on an ongoing basis.

    The Group acquired Davies plumbing, heating and drainage business and Garvey's builders merchants on 1 December 2005. The acquisition of Davies, which trades from 2 branches in the greater Dublin area, enables the division to broaden its product portfolio into an area which offers strong growth opportunities while Garvey's provides the Group with a strong merchanting presence in Roscommon, an important Midlands town.

    Irish Retailing

    The scale of the Group's Irish retailing operations increased substantially during 2005 due principally to the acquisition of Heitons retailing business which trades under the Atlantic Homecare and In House at the Panelling Centre brands. At the time of acquisition the Atlantic Homecare DIY chain traded from 15 stores and In-house at the Panelling Centre, which markets a range of high quality kitchen and bedroom panelling products to trade and retail customers, traded from four stores.

    Sales in the division were up 110 per cent to €272.6 million (2004:€129.8 million). The division's operating profit increased strongly, particularly during the second half, with contributions from the Atlantic Homecare, and In House at the Panelling Centre businesses and a good performance from Woodie's 2004 and 2005 store openings. Like for like sales in the Atlantic Homecare and Woodie's stores were down 2 per cent for the year reflecting an improvement in trading in the second half.

    Growth in consumer spending picked up in 2004. This trend continued throughout 2005 with the benefit of income tax reductions, income growth and an increase in employment and the population and record levels of new house building. While this was an ideal economic background for retailing, there was also a significant increase in retail capacity across the country with the opening of new retail centres. There has been a particularly marked increase in the retail area devoted to DIY superstores with an increase in capacity of 83 per cent over the past two years.

    Woodie's had its most active year ever on the development front with the opening of three stores in Naas, County Kildare in the first half and Carrickmines, South Dublin and Drogheda, County Louth in the second half. The Cork and Bray, County Wicklow stores were relocated in order to substantially expand the capacity of both stores to support a wider product offering and to provide greater choice for customers. The Woodie's stores opened in 2004 and 2005 and the two relocated stores performed strongly. Sales in a number of Woodie's established branches were lower due to the more competitive market place.

    Atlantic Homecare increased its store network to sixteen with the opening of a new store in Limerick and prior to the year end extended the Mullingar store.

    Woodie's Castlebar will officially open on 16th March 2006. Construction of stores in Navan and Nenagh is well advanced with openings expected from Spring 2006.

    In House at the Panelling Centre increased sales and profits strongly. Plans are well advanced to continue the growth of this business with the opening of a fifth store in Galway and relocation of the Dun Laoghaire store to a larger facility in Spring 2006.

    Irish Manufacturing

    CPI's EuroMix division benefited from a buoyant residential construction market growing dry mortar volumes in the greater Dublin area.

    Wright, a business engaged in the manufacture and installation of uPVC, aluminium and timber, windows and external doors, was also a beneficiary of the strong housing market increasing sales and profit for the year.

    Finance

    Cashflow from operating activities increased to €224.5 from €178.2 million principally due to higher operating profit.

    The cost of acquisitions completed during the year including acquired debt was €470.9 million (2004: €84.9 million). This included expenditure of €359.0 million to acquire the remaining 71 per cent of the shares in Heiton's not already owned by the Group and €111.9 million on sixteen bolt-on acquisitions. Deferred consideration paid in the year on prior year acquisitions amounted to €6.8 million (2004: €3.7million). The total consideration paid for Heiton's of €359.0 million comprised the issue of 21.4 million Grafton Units valued at €173.6 million to shareholders in Heiton's, the payment of €100.2 million in cash under the cash element of the offer, debt acquired at completion of €75.2 million and expenses of €10 million associated with the offer.

    The Group issued a total of 24 million Grafton Units during the year comprising the Units issued in connection with the Heiton offer, 1.2 million Units issued to UK employees under the Grafton Group (UK) plc Savings Related Share Option Scheme and 1.4 million Units issued under the Group's executive share schemes.

    Capital expenditure increased to €100.6 million from €88.9 million in 2004 reflecting routine replacement expenditure of €44.3 million and expenditure of €56.3 million on continued investment in the enlarged business including the opening of 19 new branches and various development initiatives supporting the continued profitable growth of the Group.

    The Group realised a profit of €9.6 million mainly on the sale of surplus Irish and UK properties. The proceeds on disposal of these properties amounted to €23.2 million.

    Net interest payable of €31.2 million (2004: €22.8 million) includes the cost of servicing increased debt associated with the acquisition of Heiton's. Interest cover was 7.2 times (2004: 7.4 times).

    Net borrowings at 31 December 2005 were €584.2 million compared to €349.2 million at 31 December 2004 giving gearing of 72 per cent compared to 70 per cent at 31 December 2004.

    In June 2005, the Group raised $325 million through a private placement of seven year and ten year Senior Notes with a group of US investors. The proceeds were converted into Sterling and used partly to re-finance existing borrowings with the remainder held for general corporate purposes. This competitively priced source of funds has strengthened the Group's balance sheet and improved the maturity profile of Group debt.

    Outlook

    In Ireland, the fundamental factors which have driven strong growth in recent years remain favourable with the economy expected to perform strongly in 2006. The positive medium term outlook is based on subdued inflation pressure, a modest increase in the Euro interest rate, continued job growth and impressive growth in domestic demand helped by maturing SSIA accounts.

    The prospects of the Irish housing market are also positive. The trend in housing registrations and planning permissions, leading indicators of housing completions, are supportive of a continuation of strong residential construction activity supported by both increased employment and immigration.

    We expect that the favourable macro economic background in Ireland should lead to positive trading conditions for the Heiton Buckley and Chadwicks businesses and that both merchants should be beneficiaries of strong levels of activity anticipated in both the residential construction and RMI markets throughout 2006.

    Consumer spending is expected to be a key driver of economic growth in 2006 and should be supportive of good demand in the Irish DIY market. We expect the sector to continue to be very competitive as the impact of additional capacity added in recent years unfolds and development of the market moves towards maturity.

    In the UK, the economy grew below trend in 2005 due to weaker consumer spending, a key component of growth in recent years. Recent economic data is encouraging with a strong recovery in housing transactions and mortgage approvals. Improving consumer confidence should support a gradual recovery in the RMI market but we continue to expect lower first half like for like sales in our merchanting business compared to the strong performance in the first half of 2005. The UK dry mortar market is expected to remain competitive due to the increased capacity in the sector. In a more difficult market, the UK business continues to focus on cost control and scale related synergies throughout the merchanting network. The Group also expects to benefit from its healthy pipeline of potential acquisition and organic growth opportunities.

    The Group's strong financial position and substantial cashflows leave it well placed to continue to pursue its successful strategy.

    Analyst Meeting
    There will be an analyst meeting today at 08.45 (BST) in Dublin. A dial-in facility will be available for this meeting:

    Ireland: +353 1 439 0433
    UK: +44 207 769 6433
    Other: +353 1 439 0433

    For further information please contact:

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    View the full 2005 Final Results in PDF format.

    Trading Update

    Released: 13/01/2006

    Group Turnover for 2005 exceeded €2.6 billion and Group earnings are expected to be in line with market expectations of a basic EPS of circa 66 cent.

    The Group benefited from a continuation of a favourable operating environment in Ireland that compensated for weaker trading conditions in the UK during the second half of the year. Heiton Group plc, acquired in January 2005, performed ahead of Group expectations and contributed significantly to Group profitability.

    The Group remains positive in its outlook for the UK market but expects difficult conditions to continue in that market during the first half of 2006. A shortfall in like for like sales is anticipated compared to a strong performance in the first half of 2005. Following a recent marked improvement in UK macro economic indicators, including a strong increase in mortgage lending, a higher level of housing transactions, increased immigration and a reduction in UK interest rates, the prospects for the second half are more favourable. In Ireland, the Group expects to benefit from a continuation of buoyant trading conditions and good like for like merchanting sales growth throughout 2006.

    During 2005 the Group continued to grow organically with the development of 19 greenfield outlets, 4 new Irish DIY stores, a new dry mortar plant in Bristol and 14 merchanting outlets across the UK.

    In the year to 31 December 2005 Grafton completed 17 acquisitions, 14 in the UK and 3 in Ireland for a total consideration of circa €470 million (including €359 million for Heiton Group plc), adding 89 branches and increasing the branch network to over 480 trading locations.

    Further organic growth is planned for 2006 with the development of additional greenfield locations, the completion of the 9th dry mortar plant in the UK and further DIY store openings in Ireland. The Group also expects to benefit from its healthy pipeline of potential acquisitions.

    Ends

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook
    2005
    Date Title
    05 December 2005 Grafton Group plc: Two Acquisitions Broaden Product Base and Geographic Spread in Ireland
    13 November 2005 Interim Results For the Six Months Ended 30 June 2005
    06 July 2005 Restatement of 2004 Results Under International Financial Reporting Standards
    06 July 2005 Trading Statement for the Six Months ended June 30th, 2005
    09 May 2005 AGM Statement
    14 March 2005 2004 Final Results Presentation
    09 March 2005 Preliminary Announcement of Results Year ended 31 December 2004
    12 January 2005 Trading Update
    07 January 2005 Offers declared Unconditional in all Respects

    Grafton Group plc: Two Acquisitions Broaden Product Base and Geographic Spread in Ireland

    Released: 05/12/2005

    Grafton Group plc, the builders merchants and DIY Group, announces the acquisition in Ireland of Davies plumbing, heating and drainage business and Garvey's builders merchants. Both transactions were completed on 1 December 2005 and the combined annual turnover of both businesses amounts to €47.4 million.

    Davies is a leading Dublin based specialist plumbing, heating and drainage business trading from two locations in the Greater Dublin area. The business also incorporates two quality retail bathroom showrooms. The plumbing and heating division principally services new building projects in the commercial and domestic markets. The drainage division supplies a broad range of drainage products into the infrastructure, civils and Local Authority markets nationally. Davies was established in 1933 and has grown its annual turnover to €37.4 m. The gross assets acquired are €24.8 m.

    Garvey's Builders Merchants Limited is a fourth generation builders merchant based in Roscommon town. The business has a leading position in the Roscommon market where it services the repair, maintenance and improvement (RMI) and residential construction markets. The annual turnover of Garvey's is in excess of €10 m and the gross assets acquired are €2.6 m.

    Commenting on the acquisitions, Leo Martin, Executive Director of Grafton, said:

    'Davies and Garvey's are quality businesses with strong positions in their respective markets. The Davies' acquisition enables Grafton to broaden its product portfolio into an area which offers strong growth opportunities. Garvey's is an ideal geographic fit with Grafton's existing builders merchanting branch network and provides the Group with a strong presence in an important midlands town where it was not previously represented. We see potential for the further development of both of these businesses.'


    Ends


    5 December 2005


    For reference:

    Leo Martin
    Executive Director
    Grafton Group plc
    Tel: (++353) (01) 216 0600

    Colm O Nuallain
    Finance Director
    Grafton Group plc
    Tel: (++353) (01) 216 0600


    Other Contacts:

    Joe Murray
    Murray Consultants
    Tel: (++353) (01) 498 0300

    Ginny Pulbrook
    Citigate
    Tel: (++44) (0207) 282 2945

    Interim Results For the Six Months Ended 30 June 2005

    Released: 13/09/2005

    Highlights

    • Sales were up 42 per cent to €1.3 billion (2004: €0.9 billion).
    • Operating profit increased by 37 per cent to €96.5 million (2004: €70.7 million).
    • Profit before tax increased by 28 per cent to €87.4 million (2004: €68.4 million).
    • Profit before tax and property profit increased by 34 per cent to €81.5 million (2004: €60.9 million).
    • Share purchase payment up 21 per cent to 7.25 cent (2004: 6.0 cent).
    • Earnings per share before property profit increased by 20 per cent to 29.8 cent (2004: 24.8 cent).
    • Basic earnings per share increased by 15 per cent to 32.0 cent (2004: 27.8 cent).
    • Heitons ahead of pre-acquisition expectations.
    • Scale related synergies bring savings.
    • Strong performance by Irish builders merchants.
    • UK merchanting contributes satisfactorily in softer market.
    • Increasing competition in Irish DIY market.
    • Confident of continued growth through 2005.

    Commenting on the results today, Michael Chadwick, Chairman said:

    'The strong increase in first half profits and earnings reflects a first time contribution from Heitons, which traded ahead of pre-acquisition expectations, an excellent performance by the Irish merchanting operations in a continuing favourable trading environment and a satisfactory performance by the UK merchanting business in a softening market. The Group remains confident of continued growth in profits and earnings per share in 2005.'

    View the full press release in PDF format.

    Restatement of 2004 Results Under International Financial Reporting Standards

    Released: 06/07/2005

    Grafton Group plc today announces the impact of the transition to International Financial Reporting Standards (IFRS) on its 2004 results previously prepared in accordance with accounting practice generally accepted in the Republic of Ireland (Irish GAAP). The Group's interim results for the six months ended 30 June 2005 and the financial statements for the year ended 31 December 2005 will be prepared under IFRS.

    View the full Press Release in PDF format.

    Trading Statement for the Six Months ended June 30th, 2005

    Released: 06/07/2005

    Trading in the first six months of the year is in line with market expectations. Heiton Group plc has performed ahead of last year's levels since being acquired in January. Substantial progress is being made on the realisation of integration benefits.

    The Irish merchanting businesses are achieving high single digit like for like sales growth in a favourable trading environment. The importance of Irish merchanting as a contributor to the Group has increased significantly in this period following the successful Heiton acquisition and the continued strength of the Irish economy.

    DIY sales are growing on the back of new store openings and relocations to larger outlets. As previously highlighted, the opening of new stores by all of the principal DIY traders is making the Irish market increasingly competitive. This is reflected in a low single digit reduction in like for like DIY sales compared to a strong trading period last year.

    UK merchanting operations experienced low single digit like for like sales growth overall for the first six months in a softening market. Within the Group's UK merchanting operations, like for like plumbers merchanting sales were down on the same period last year affected by weaker retail spending.

    Like for like turnover in the EuroMix dry mortar business was similar to that recorded in the same period last year in more competitive trading conditions as a result of an increase in the number of competitor locations across the UK.

    Five bolt on acquisitions trading from five locations have been completed since the start of the year. In addition the Group has opened twelve greenfield branches, comprising six UK plumbers merchanting branches, four UK builders merchanting branches and two new Irish DIY stores.

    The Group's financial position remains strong with increased levels of cash flow in the first half. During this period a $325 million private placement of 7 and 10 year Senior Notes was completed on favourable terms with US investors.

    The Group remains confident of continued growth in profits and earnings per share in 2005 and is well placed to participate in further consolidation of the Irish and UK merchanting markets.

    Ends

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    AGM Statement

    Released: 09/05/2005

    Grafton Group is pleased to confirm that trading in the first four months of the year has been in line with expectations. The acquisition of Heiton Group plc was successfully completed in January 2005 and it has since traded ahead of last year's levels. Its phased integration is progressing according to plan.

    The Group's Irish merchanting businesses continue to see high single digit like for like growth in a buoyant and favourable trading environment. In an increasingly competitive Irish DIY market, the Group's stores recorded sales in line with the same period last year on a comparable basis.

    Although consumer spending has shown signs of slowing in the UK retail sector, the Group's UK merchanting operations have experienced modest single digit like for like sales growth in the first four months of the year. Our UK Mortar business recorded single digit sales growth in a maturing and more competitive market.

    Developments since the start of the year involved completion of five bolt on acquisitions trading from five locations and the opening of six greenfield branches, comprising five UK Plumbers Merchanting branches and a new DIY store in Limerick, Ireland.

    The Group remains confident of continued growth in profits and earnings per share in 2005 and is well placed to participate in further consolidation of the Irish and UK merchanting markets.

    Ends

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    2004 Final Results Presentation

    Released: 14/03/2005

    n/a

    Preliminary Announcement of Results Year ended 31 December 2004

    Released: 09/03/2005

    Highlights

    • Pre-tax profits 29 per cent higher at €131.9m
    • Turnover increase by 25 per cent to €1.9bn
    • Operating profit before goodwill up 28 per cent to €157.4m
    • EPS before goodwill and property profit increase by 23 per cent to 55.6c
    • 24 per cent rise in share purchases / redemptions
    • 28 per cent rise in UK turnover to over €1.4bn
    • UK operating profit before goodwill increases 38 per cent to €108.4m
    • Jacksons performs ahead of expectations
    • 17 acquisitions completed in 2004
    • Cash generated from operations up 36 per cent to €177 million
    • Heiton acquisition completed in January 2005

    Commenting on the results today, Michael Chadwick, Chairman said:

    "We achieved good quality profit growth in our established businesses in both the UK and Ireland, supported by acquisition, greenfield development, integration and scale benefits. Record levels of cash flow funded ongoing investment in existing businesses and bolt on acquisitions, with interest cover remaining healthy. Following the Heiton acquisition in early 2005, the Group is well placed to continue its successful development strategy with a strong balance sheet and highly cash generative profitable operations."

    GRAFTON GROUP plc PRELIMINARY ANNOUNCEMENT OF RESULTS YEAR ENDED 31 DECEMBER 2004

    Grafton Group plc is pleased to announce that 2004 has been another year of excellent progress and that record sales, profits and earnings have been achieved. This was the Group's thirteenth year of uninterrupted profit growth.

    Highlights


    • Sales were up 25 per cent to €1.9 billion (2003: €1.5 billion).
    • Operating profit before goodwill increased by 28 per cent to €157.4 million (2003: €123.3 million).
    • Profit before tax increased by 29 per cent to €131.9 million (2003: €102.0 million).
    • Earnings per share before goodwill and property profit increased by 23 per cent to 55.64 cent (2003: 45.07 cent).
    • Cash generated from operations up 36 per cent to €177 million (2003: €129.8 million).

    All of the Group's operations performed strongly in 2004 aided by good market conditions in the UK and Ireland and the benefit of acquisitions completed during 2003. The Group's consistent strategy has enabled development of builders merchanting, DIY and mortar manufacturing businesses in the UK and Ireland with strong regional and national market positions. These businesses and brands have given the Group a solid platform for continued profitable growth and development as well as diversifying its earnings base between the UK and Ireland and across the construction sector and related markets.

    It was another year of significant progress for the UK businesses. Favourable economic conditions continued to support strong demand in the repair, maintenance and improvement sector. The completion of a significant acquisition and development programme in 2003 and the related integration and scale opportunities resulted in a substantial increase in sales and operating profit. UK turnover grew by 28 per cent to €1.4 billion (2003: €1.1 billion). UK operating profit increased by 38 per cent to €108.4 million (2003: €78.6 million). As anticipated, the UK operating profit margin increased, for the sixth consecutive year, to 7.6 per cent (2003: 7.1 per cent). The UK accounted for 76 per cent of Group turnover (2003: 74 per cent) and 69 per cent (2003: 64 per cent) of Group operating profit.

    The Group was also active on the development front in the UK during 2004 with a continuing successful bolt-on strategy which involved completion of 17 acquisitions. The businesses acquired trade from 22 branches with annual sales of €120 million. These businesses enhance coverage of the UK merchanting market and strengthen our position in the North West region where half of the acquired branches are located. The Group also improved coverage of the UK merchanting market with the greenfield development of 12 branches. EuroMix strengthened its leadership position in the UK dry mortar market with the opening of its seventh plant in Southampton.

    In the Republic of Ireland, a gradual economic recovery as the year developed and record levels of activity in the residential construction market provided a favourable background for good growth in turnover and operating profit. Irish turnover increased by 17 per cent to €451.7 million (2003: €384.5 million) and operating profit was up 10 per cent to €49.0 million (2003: €44.8 million). Irish merchanting sales increased by 19 per cent due to the Telfords acquisition and good like for like growth. Incremental sales from Woodie's Cavan and Carlow stores which opened during 2003 and the opening of a further three stores in Clonmel, Naas Road, Dublin and Kilkenny together with like for like sales growth enabled Woodie's to increase turnover by 18 per cent.

    The Group used its strong operating cash flows and balance sheet strength to fund a significant acquisition and development programme during the year. A record cashflow of €177 million from operations in 2004 enabled the Group to continue to implement its development strategy and provide a sound basis for the future profitable growth of the Group.

    Share Purchase / Redemptions

    The Board redeemed the remaining six redeemable shares per Grafton Unit for a cash consideration of 5 cent payable on 26 March 2004.

    Following restructuring of the Group's share capital in June 2004, the Board approved the purchase of one A Ordinary Share per Grafton Unit for 1 cent and payment was made on 1 October 2004.

    The Board has decided to purchase a further A Ordinary Share per Grafton Unit for a cash consideration of 7 cent payable on 29 March 2005. Total redemption / share purchase payments to shareholders for 2004 of 13 cent per Grafton Unit represents an increase of 24 per cent on redemptions of 10.5 cent per Grafton Unit for 2003.

    Heiton Group plc

    On the 7 January 2005, following clearance from the Competition Authority in Ireland, the Group completed the acquisition of Heiton Group plc for a total consideration of €398 million including debt assumed and the cost of the Group's 29 per cent investment in the business held prior to the offer. The consideration payable includes the issue of 21.4 million shares by Grafton to Heiton Group shareholders.

    Heiton Group operations, which are located primarily in Ireland, comprises both builders merchanting and DIY activities. The Irish builders merchanting business trades mainly under the Heiton Buckley name and is the largest builders merchanting business in Ireland operating nationally from 25 branches including Cork Builders Providers. The business also incorporates Heiton Steel, the largest steel stockholding business in Ireland, and a 14 branch small plant and tool hire business trading under the Sam Hire brand. The retail operations of Heiton Group trade from 15 branches under the Atlantic Homecare DIY brand and, from 4 stores, under the In-House at the Panelling Centre brand. Heiton Group also operates a small specialist drainage and ground engineering merchanting business from 6 branches in the UK.

    Heiton's Irish merchanting and DIY businesses are a good strategic fit with Grafton's existing operations and consolidates the position of Grafton as the leading player in the Irish merchanting and DIY markets.

    The acquisition of Heiton Group provides opportunities for scale benefits from two complementary businesses.

    Board

    Mr. Leo Martin, Chief Executive of Heiton, was appointed to the Board of Grafton on completion of the acquisition. As previously announced, the Board is in the process of appointing two additional non-executive directors whose appointment will reflect the scale and geographical spread of the Group's interests.

    International Financial Reporting Standards (IFRS)

    The results for 2004 are reported under Irish / UK GAAP. Restated interim and full year results for 2004 under IFRS will be made available during the second quarter of 2005.

    Operations Review - United Kingdom

    UK sales increased by 28 per cent to €1.4 billion (2003: €1.1 billion) and operating profit increased by 38 per cent to €108.4 million (2003: €78.6 million). The operating profit margin increased to 7.6 per cent (2003: 7.1 per cent), a rate of improvement consistent with that achieved in each of the previous three years.

    In 2004 the UK economy continued a long period of stability and growth. The economy slowed from above trend growth rates as the year progressed in response to a tightening of interest rates aimed at slowing growth and the rate of increase in house prices. It was a very good year for the labour market as the unemployment rate edged down to 4.7 per cent.

    The UK repair, maintenance and improvement market, which is the principle end user market for the Group's merchants' sales, put in another solid performance in 2004 with industry estimates indicating volume growth of 3.5 per cent.

    The excellent results achieved by the UK businesses reflects strong profit growth in the established merchanting businesses, incremental profit from the businesses acquired during 2003 and contributions from the seventeen businesses acquired during 2004.

    Like for like merchanting sales growth of 6.5 per cent, margin improvement as a result of purchasing synergies and trading initiatives and benefits of integrating acquisitions contributed to the substantial operating profit improvement in the like for like businesses.

    The Jackson and Plumbline acquisitions completed in 2003 joined the Group with very good market positions and performed strongly during 2004.

    Development of the UK businesses continued during 2004 with the acquisition of seventeen businesses trading from twenty two branches and thirteen greenfield developments increasing the number of trading locations to 318. Acquisitions made during the year included Keel Supply and Hall and Rogers, two specialist insulation and dry-lining businesses trading from four branches in the North West. These businesses, which traded strongly post acquisition, add critical mass over a narrow product group and offer potential growth opportunities.

    Greenfield developments comprised eight plumbers merchanting branches, four builders merchanting and a new mortar plant. Two Scottish builders merchanting branches at East Kilbride and Glasgow successfully relocated to new purpose built facilities.

    UK Builders Merchanting

    The UK Builders merchanting division had an excellent year with sales and operating profit substantially ahead of 2003. The strong improvement in profit came from good like for like sales growth in the established branch network, incremental profit from acquisitions made during 2003 and contributions from current year acquisitions.

    The results reflect the full year benefit of revised purchasing and sourcing arrangements put in place following the Jacksons acquisition and the continued successful integration of the 61 branches acquired in 2002 and 2003.

    Regional coverage was strengthened with further geographic expansion during 2004. Completion of 15 small acquisitions added twenty branches and a further four greenfield branches were opened increasing the UK builders merchanting network to 163 branches at the year end.

    Buildbase achieved another year of excellent sales and profit growth. Good like for like sales growth, margin improvement through improved purchasing terms and tight control over overheads delivered profit improvement in the like for like business. This combined with incremental contributions from acquisitions made in 2003 resulted in a significant improvement in operating profit. Buildbase continued with the successful integration of businesses acquired during 2003 and 2004 taking advantage of synergy and product growth opportunities while maintaining the ethos of these small chain and single branch merchants with a long established presence in their local markets.

    Buildbase continued to consolidate and expand its strong position in the UK builders merchanting market where the brand is now firmly established.

    Jacksons, the UK's largest regional independent merchanting business prior to acquisition in March 2003, achieved an excellent result in its first full year as part of the Group. The strong advance in operating profit on 2003 levels reflected good like for like sales growth, tight overhead control and scale related purchasing synergies.

    The Jackson acquisition created a market leadership position for the Group in the East Midlands builders merchanting market and complements the Buildbase branch network which is concentrated in the South East and West Midlands. The strong results for 2004 mean that the financial benefits of the acquisition for the enlarged Group were realised in 2004, the first full year of ownership and well ahead of the 2006 time frame anticipated in the original acquisition announcement.

    Buildbase acquired nine businesses trading from twelve branches during 2004 and opened two branches in Stratford E15 and Cirencester. Developments completed by Jacksons during the year included the opening of a greenfield branch in Louth, replacement of the Swinton, South Yorkshire branch with a new purpose built facility and a small bolt-on acquisition which provides a platform for further growth in the Lincolnshire market.

    In Northern Ireland, Macnaughton Blair strengthened its leading market position in the province with the acquisition of two builders merchanting businesses trading from branches in Bangor and Coleraine. These acquisitions provide the business with a wider geographic coverage in the province and increase the branch network to 12.

    The strong trading performance of Macnaughton Blair in recent years continued into 2004 and the business experienced very good like for like sales and operating profit growth with contributions from the Bangor and Coleraine acquisitions.

    UK Plumbers Merchanting

    Plumbase, a plumbing heating and sanitary ware merchanting business, with 147 branches has strong regional market positions in the South East, West Country, Midlands, East Anglia and Scotland. The business further strengthened its market position during 2004 through the acquisition of two single branch merchants and the opening of eight new branches.

    Plumbase achieved growth in sales and operating profit. Purchasing synergies and increased sales enabled a good advance in profit in the like for like Plumbase business.

    The results of the division were significantly boosted by a full year contribution from the Plumbline business acquired in September 2003. Plumbline, a leading regional plumbers merchanting chain trading from seventeen branches provided Plumbase with an important initial presence in the Scottish plumbers merchanting market. The business performed ahead of pre-acquisition expectations as sales growth, purchasing benefits and the continued development of a number of branches in the chain which opened in the years prior to acquisition contributed to the increase in profit.

    UK Mortar

    The EuroMix mortar business continued to trade well increasing sales and operating profit in a more competitive market. EuroMix, the market leader in the supply of dry mortar, has transformed a traditional market by pioneering the on-site use of dry mortar silo technology to produce a range of quality mortars for the use in block laying and bricklaying.

    The EuroMix business operates from a network of seven strategically located plants and provides mortar to key national and regional building and construction companies for use in residential and non-residential construction projects. The distinctive red and white EuroMix silos are now an established feature on construction sites throughout the country.

    The plant at Harlow, which commenced production in May 2003, traded strongly and the opening of a plant in Southampton in July provides coverage to house builders, developers and contractors throughout the South of England. Market leadership will be further enhanced with the opening of the eighth dry mortar plant at Severnside, near Bristol. This plant is currently under construction and will provide market coverage in the West Country.

    Operations Review - Republic of Ireland

    Irish turnover increased by 17 per cent to €451.7 million (2003: €384.5 million) and operating profit increased by 9.5 per cent to €49.0 million (2004: €44.8 million). The operating profit margin declined to 10.9 per cent from 11.6 per cent. This reflected flat operating profit margins in the established merchanting and DIY businesses, costs associated with Woodie's three new stores, an anticipated lower margin in the acquired merchanting business and a more competitive trading environment with increased competition in the DIY and manufacturing businesses.

    The Irish economy delivered an impressive growth performance in 2004 following two years of below trend growth. The economy steadily gathered pace as the year developed and exceeded growth expectations for the year as a whole. The employment market performed strongly with high employment creation and the inflation environment was benign with the slowest annual growth rate for five years.

    The construction market grew by an estimated 9 per cent in 2004 reflecting very strong activity in the residential sector, strong infrastructure demand and unchanged volumes in the commercial and industrial sectors. House completions for 2004 were a record 77,000 units. Record levels of house completions have been influenced by a prolonged period of low interests rates, strong employment creation, net inward migration, demand for second homes and demand from investors in the buy-to-let market.

    Irish Merchanting

    The Irish Merchanting division increased sales by 19 per cent to €286.1 million (2003: €239.8 million) including like for like growth of 6.8 per cent.

    Chadwicks builders and plumbers merchanting business had a busy year due to record demand in the residential construction market and good levels of activity in the repair, maintenance and improvement market. While the merchanting market enjoyed good volume growth, there was strong competition in the sector from both the national chains and independent operators.

    Chadwicks Wexford branch, which relocated to a modern out of town purpose built facility at the end of 2003, traded successfully in 2004 and the two Chadwicks Plumb Centre branches in Galway and North Dublin which opened last year made good progress growing market share.

    Telfords, the three branch builders merchanting business acquired in October 2003, traded ahead of pre-acquisition expectations benefiting from strong sales growth and purchasing synergies. This long established merchant provides the Group with an important presence in the Midlands market.

    Irish Retailing

    Woodie's, the leading player in the Irish DIY market, achieved another year of sales and profit growth. Sales increased by 18 per cent to €129.8 million (2003: €110.3 million). Like for like sales growth of 2 per cent for the year reflected good first half demand, influenced by strong sales of seasonal products, and the softening of demand in the DIY Superstore sector generally in the second half of the year in an increasingly competitive market.

    The Cavan and Carlow stores which opened in 2003 traded ahead of expectations in 2004. Woodie's continued to consolidate its market leadership position with the opening of stores in Clonmel and Naas Road, Dublin in the first half and in Kilkenny in the second half bringing the total network to nineteen.

    Development plans for 2005 will involve relocating the Cork and Bray stores and opening new stores in Naas and Carrickmines. Further store openings in Drogheda and Navan are planned for 2006.

    Irish Manufacturing

    CPI's EuroMix business strengthened its position in the dry mortar market in the greater Dublin area, but its block and readymix divisions suffered from intense competition.

    MFP, the plastics manufacturing business, experienced difficult market conditions due to increased raw materials prices and intense competition in the sector.

    Financial Review

    The generation of strong operating cash flows has traditionally provided the Group with the financial strength to fund a consistent acquisition and development programme. Cashflow from operating activities was up 36 per cent to a record €177.0 million (2003: €129.8 million).

    The total spend on acquisitions and capital projects was €164.2 million (2003: €285.1 million). Acquisition expenditure during the year including net debt acquired and deferred consideration from prior year acquisitions was €75.3 million (2003: €215.8 million).

    Capital expenditure of €88.9 million (2003: €69.3 million) reflected routine asset replacement expenditure, which was in line with the Group's depreciation charge, the addition of 16 greenfield locations and redevelopment of a number of branches.

    The Group's spend on acquisitions, investments and capital projects in the five years to the end of 2004 was €824 million. This investment programme was funded from the Group's cashflow and debt capacity except for raising €67.3 million through a rights issue to part fund the Jacksons acquisition in 2003.

    Interest cover, an influential measure of the Group's capacity to service its debt obligations, continued to be very comfortable at 7.6 times (2003: 7.5 times).

    Shareholders' funds increased by €86 million to €535.8 million (31 December 2003: €449.8 million).

    Net debt at 31 December 2004 was €338.2 million (31 December 2003: €311.7 million) giving a net debt to equity ratio of 63 per cent (31 December 2003: 69 per cent).

    The Group realised a development profit of €6.7 million on the new Woodie's store on the Naas Road, Dublin.

    The Group's balance sheet was further strengthened with the acquisition in January 2005 of Heiton's which was part funded through the issue of 21.4 million shares and resulted in only a small increase in gearing.

    Outlook

    The Group's cash generative businesses combined with a strong balance sheet following completion of the Heiton acquisition and high interest cover leave it well placed to continue to pursue its successful strategy.

    Growth in the UK economy is expected to ease back to its long term sustainable rate in response to a tightening of monetary policy during 2004 and should continue to be supportive of growth in the repair, maintenance and improvement sector, our principle end user market. The Group will focus on realising integration benefits from acquisitions made during 2004 and also in the wider UK merchanting business. We expect to further strengthen our position in the UK merchanting market by completing further acquisitions and through new developments. The UK mortar business is expected to build on its market leadership position with the opening of its eighth plant later this year.

    The Irish economy has consistently outperformed the European economy over the past decade and growth forecasts for 2005 are also very good. Low inflation, a strong employment market and reasonable growth in incomes are expected to lead to stronger consumer spending which should be supportive of RMI growth in the Heiton Buckley and Chadwicks merchanting businesses. We expect the number of house completions in Ireland to gradually moderate to long term sustainable levels which will be more heavily influenced by population and household formations as demand for second homes and rented properties reduce. The Woodie's and Atlantic Homecare DIY businesses are both well placed to benefit from increased retail spending and should also benefit in 2005 from contributions from the five stores opened during 2004.

    We look forward to further progress in 2005 confident in the success of our strategy and proven track record of profitable growth in the enlarged Group.

    Ends

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    View the full Press Release in PDF format.

    Trading Update

    Released: 12/01/2005

    Trading in both Ireland and the UK is in line with Group expectations. Like for like sales growth continued in Ireland and the UK during the second half of 2004. Group Turnover for 2004 exceeded €1.87 billion and Group profits for 2004 are expected to be in line with market expectations.

    Heiton Management have indicated that trading in Heiton Group plc has performed strongly during its six month interim period up to October 2004 and their financial results for this period are ahead of our expectations.

    In the year ended 31 December 2004 Grafton completed 17 acquisitions in the UK for a total consideration in excess of €69 million. In Ireland, as announced last Friday, the Group has received approval from the Competition Authority to complete the purchase of Heiton Group plc. Combined, the Irish and UK acquisitions should add almost €700 million of turnover to the Group during 2005 and increase the branch network by over 80 trading locations.

    During 2004 the Group continued to implement its strategy of growth through organic developments. Greenfield development of 12 merchanting outlets, 3 Woodie's DIY stores and a dry mortar plant in Southampton added a further 16 branches to the Group bringing the total network to over 430 trading locations in Ireland and the UK.

    Further organic growth is planned for 2005 with the development of additional greenfield merchanting locations and the completion of the 8th dry mortar plant in the UK and new DIY store openings in Ireland. The Group also expects to benefit from its healthy pipeline of potential acquisitions.

    Ends

    For further information please contact:

    Grafton Group plc + 353 1 216 0600
    Michael Chadwick, Executive Chairman
    Gavin Slark, Chief Executive Designate
    Colm Ó Nualláin, Finance Director
    Murray Consultants + 353 1 498 0300
    Joe Murray
    Citigate Dewe Rogerson + 44 207 282 2945
    Ginny Pulbrook

    Offers declared Unconditional in all Respects

    Released: 07/01/2005

    Not for release, publication or distribution, in whole or in part, in, into or from Australia, Canada, Japan, South Africa or the United States.

    Recommended Offers by AIB Corporate Finance on behalf of Grafton Group Holdings Limited (a wholly-owned subsidiary of Grafton Group plc) for Heiton Group plc.

    Offers declared unconditional in all respects

    The Board of Grafton Group Holdings announces that all of the conditions of the Offers made by AIB Corporate Finance on behalf of Grafton Group Holdings in the Offer Document dated 9 September 2004 have now either been satisfied or waived. Accordingly, the Offers are declared unconditional in all respects.

    Commenting on the Offers, Mr Michael Chadwick, Chairman of Grafton Group plc said:

    'Heiton Group is an excellent strategic fit with Grafton's Irish and UK operations. We see opportunities for scale benefits from two geographically complementary businesses, for enhancing our product range and for serving customers. We intend to build on the respective strengths of both companies and plan to retain the identity of the trading operations in an integrated national network. The acquisition will create an Irish builders merchants and DIY group of scale with the ability to compete against major operators in both Irish and international markets.'

    The Board of Grafton Group Holdings also announces that by 3.00 p.m. on 6 January 2005, valid acceptances had been received in respect of 46,124,451 Heiton Ordinary Shares, representing approximately 92.12 per cent of the existing issued ordinary share capital of Heiton.

    The Offers will remain open until further notice. Heiton Shareholders who have not yet accepted the Offers are urged to do so without delay.

    Mix and Match Elections

    As at 3.00 p.m. on 6 January 2005, under the Mix and Match Facility valid elections for additional New Grafton Units had been made in respect of 39,152,468 Heiton Ordinary Shares, (representing approximately 78.20 per cent of the issued share capital of Heiton), and valid elections for additional cash had been made in respect of 1,563,595 Heiton Ordinary Shares (representing approximately 3.12 per cent of the issued share capital of Heiton). Valid elections already received for additional cash will be satisfied in full. Elections already received for additional New Grafton Units will be scaled down on a pro rata basis. The Mix and Match Facility will remain open until further notice.

    Settlement of consideration

    The consideration payable to Heiton Shareholders will be despatched (in the manner set out in the Offer Document) by 21 January 2005 in the case of valid acceptances received by 3.00 p.m. on 6 January 2005. In the case of valid acceptances received after 3.00 p.m. on 6 January 2005, consideration will be despatched to accepting Heiton Shareholders within 14 days of such receipt. It is expected that the New Grafton Units will begin trading on the Irish Stock Exchange and the London Stock Exchange no later than 8.00 a.m. on 12 January 2005.

    The Preference Share Offer

    Grafton Group Holdings also announces that as at 3.00 p.m. on 6 January 2005, valid acceptances had been received in respect of 70,995 Heiton Preference Shares, representing approximately 64.00 per cent of the existing issued preference share capital of Heiton.

    Appointment to the Board of Grafton Group

    Leo Martin has now been appointed to the board of Grafton.

    Compulsory acquisition and de-listing

    Grafton Group Holdings intends to exercise its rights under the provisions of Section 204 of the Companies Act 1963 to acquire compulsorily all outstanding Heiton Ordinary Shares not acquired or agreed to be acquired pursuant to the Ordinary Share Offer. The consideration payable in respect of any Heiton Ordinary Shares compulsorily acquired will be paid to Heiton in accordance with Section 204 (5) of the Companies Act 1963 and will thereafter be available to the holders of Heiton Ordinary Shares so acquired compulsorily.

    In addition, Grafton Group Holdings intends, subject to any applicable requirements of the Irish Stock Exchange, the UK Listing Authority and the London Stock Exchange respectively, to procure the cancellation of the listing of Heiton Ordinary Shares and the Heiton Preference Shares on the Official Lists of the Irish Stock Exchange and the UK Listing Authority, and for cancellation of trading of Heiton Ordinary Shares on the Irish Stock Exchange and on the London Stock Exchange. It is expected that such cancellations will take effect no earlier than 20 Business Days from today being 7 January 2005.

    Further Information

    Prior to the Offer Period, Weeksbury Limited held 14,397,489 Heiton Ordinary Shares, representing approximately 28.76 per cent of the existing issued ordinary share capital of Heiton.

    Prior to the Offer Period, Fergus Malone and Norman D. Kilroy held 10,000 and 5,000 Heiton Ordinary Shares respectively, representing approximately 0.03 per cent of the existing issued ordinary share capital of Heiton.

    Prior to the Offer Period, AIB Corporate Finance and persons controlling, controlled by or under the same control as AIB Corporate Finance (except in any such case in the capacity of an exempt market-maker or exempt fund manager) held 88,135 Heiton Ordinary Shares representing approximately 0.18 per cent of the existing issued ordinary share capital of Heiton.

    Valid acceptances of the Ordinary Share Offer have been received in respect of 14,451,894 of the above Heiton Ordinary Shares representing approximately 28.86 per cent of the existing issued ordinary share capital of Heiton.

    Valid acceptances of the Ordinary Share Offer from the directors of Heiton have been received in respect of 1,203,818 Heiton Ordinary Shares representing approximately 2.40 per cent of the existing issued ordinary share capital of Heiton. This represents acceptance in full of the Ordinary Share Offer by the directors of Heiton in respect of their Heiton Ordinary Shares.

    Save as referred to above, neither Grafton Group Holdings nor any persons acting or deemed to be acting in concert at the relevant times ('persons acting in concert') with Grafton Group Holdings held Heiton Ordinary Shares or rights in respect thereof prior to the Offer Period and no Heiton Ordinary Shares or rights in respect thereof have been acquired or agreed to be acquired or sold or agreed to be sold by or on behalf of Grafton Group Holdings or persons acting in concert with it during the Offer Period and no acceptances of the Ordinary Share Offer have been received from such persons.

    Terms defined in the Offer Document dated 9 September 2004 shall have the same meaning in this announcement. Grafton Group Holdings reserves all of its rights under the Offers.

    Enquiries:

    For Grafton
    Grafton Group plc:
    Michael Chadwick, Chairman
    Colm O'Nuallain, Finance Director
    Telephone: +353 1 216 0600


    AIB Corporate Finance:
    Alan Doherty
    Telephone: +353 1 667 0233

    Goodbody Stockbrokers:
    Stephen Donovan
    Linda Hickey
    Telephone: +353 1 667 0400

    Murray Consultants:
    Joe Murray
    Telephone: +353 1 498 0300
    Mobile: +353 86 253 4950

    For Heiton
    IBI Corporate Finance:
    Peter Crowley
    Telephone: +353 1 6377800

    Drury Communications:
    Billy Murphy
    Telephone: +353 01 260 5000
    Mobile: +353 87 231 3085

    AIB Corporate Finance, which is authorised by the Irish Financial Services Regulatory Authority, is acting exclusively for Grafton and Grafton Group Holdings and no one else in connection with the Offers and will not be responsible to anyone other than Grafton or Grafton Group Holdings for giving the protections afforded to clients of AIB Corporate Finance or for giving advice in relation to the Offers or the contents of this announcement.

    IBI Corporate Finance Limited is a subsidiary of The Governor and Company of the Bank of Ireland, which is regulated by the Irish Financial Services Regulatory Authority and is acting exclusively for Heiton and no one else in connection with the Offers and will not be responsible to anyone other than Heiton for providing the protections afforded to clients of IBI Corporate Finance Limited or for providing advice in relation to the Offers, the contents of this announcement or any transaction or arrangement referred to herein.

    The Offers are not being made, directly or indirectly, in, into or from Australia, Canada, Japan, South Africa, the United States or any other jurisdiction where it would be unlawful to do so, or by use of the mails, or by any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce, or any facility of a national securities exchange of Australia, Canada, Japan, South Africa, the United States or any other jurisdiction where it would be unlawful to do so and the Offers will not be capable of acceptance by any such means, instrumentality or facility, or from within Australia, Canada, Japan, South Africa, the United States or any other jurisdiction where it would be unlawful to do so. Accordingly, copies of the Offer Document, the Form(s) of Acceptance and any related documents are not being and must not be mailed, or otherwise distributed or sent in, into or from Australia, Canada, Japan, South Africa, the United States or any other jurisdiction where it would be unlawful to do so and persons receiving such documents (including, custodians, nominees and trustees) must not distribute or send them in, into or from Australia, Canada, Japan, South Africa, the United States or any other jurisdiction where it would be unlawful to do so, as doing so may render invalid any purported acceptance of the Offers. Notwithstanding the foregoing restrictions, Grafton Group Holdings reserves the right to permit the Offer(s) to be accepted, if in its sole discretion, it is satisfied that the transaction in question is exempt from or not subject to the legislation or regulation giving rise to the restrictions in question.

    The directors of Grafton and Grafton Group Holdings accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the directors of Grafton and Grafton Group Holdings (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

    Ends

    2004
    Date Title
    08 November 2004 Grafton Group plc Interim Results For the Six Months Ended 30 June 2004
    13 August 2004 Analyst Conference Call
    12 August 2004 Recommended Offers For Heiton Group Plc
    06 August 2004 Potential Recommended Offer for Heiton Group plc
    17 June 2004 Possible Offer for Heiton Group plc
    15 June 2004 Trading Statement
    11 May 2004 AGM Statement
    10 Mar 2004 Preliminary Announcement of Results for the Year ended 31 December 2003
    08 January 2004 Development Update

    Grafton Group plc Interim Results For the Six Months Ended 30 June 2004

    Released: 08/09/2004

    Highlights

    GROUP

    • Sales were up 29% to €911.4m (2003: €706.5m)
    • Operating profit before goodwill and property profit increased by 31% to €69.9m (2003: €53.4m)
    • Profit before tax and property profit increased by 30% to €54.3m (2003: €41.7m)
    • Earnings per share before goodwill and property profit increased by 25% to 24.63 cent (2003: 19.63 cent)

    UK OPERATIONS

    • UK now represents 76% of Group Sales and 72% of Group Operating Profit
    • Turnover in the UK increased by 32% or €167.5m to €690m
    • UK Operating Profit increased by 41% or €14.6m to €50.2m

    IRISH OPERATIONS

    • Irish Turnover grew by 20% or €37.3m to €221.3m
    • Irish Operating Profit increased by 10.7% or €1.9m to €19.7m

    Commenting on the results today, Michael Chadwick, Chairman, said:

    "Our UK operations have generated high levels of growth which fully endorses Grafton's strategy of development in that market. The Irish operations have also shown good growth under strong management in an increasingly competitive market environment. Group operating cash flow increased strongly to €92.5m compared with €45.8m. We have a healthy pipeline of bolt on acquisitions and are confident about the Group's prospects for the remainder of the current financial year."

    INTERIM STATEMENT

    Grafton Group plc is pleased to report record levels of sales, profits and earnings for the half year to 30 June 2004. Group sales were up 29 per cent to €911.4 million, compared with €706.5m in the same period last year. Operating profit before goodwill and property profit increased by 31 per cent to €69.9m from €53.4m. Profit before tax and property profit was 30 per cent higher at €54.3m compared to €41.7m. Earnings per share before goodwill and property profit increased by 25 per cent to 24.63 cent against 19.63 cent. Share redemption/purchase payments to shareholders increased by 33 per cent for the period.

    Positive market conditions in the UK and Ireland in the half year provided a favourable operating environment for the continued development of the Merchanting, DIY and Mortar businesses. These results are consistent with the Group's long term record of achieving high growth rates and are based on a good like for like performance in both the UK and Ireland and strong contributions from acquisitions completed during 2003.

    UK turnover was up €167m or 32 per cent to €690m (2003: €523m) and accounted for 76 per cent of Group turnover. The UK businesses had an outstanding half year reporting operating profit growth of 41 per cent to €50.2m (2003: €35.6m) representing 72 per cent of Group operating profit. The UK operating margin improved in line with expectations and was up 46 basis points to 7.3 per cent (2003: 6.8 per cent).

    The Group continued its successful strategy of bolt-on acquisitions which has been the cornerstone of the development of its UK Merchanting business. Six acquisitions were completed in the half year, adding nine branches to the UK network and €60m in annualised turnover. The Group has a healthy pipeline of potential acquisitions that are expected to complete during the second half. Greenfield developments include the opening of five Merchanting branches and the Group's 7th EuroMix dry mortar plant in Southampton.

    In Ireland, against a favourable economic background and continued growth in construction activity, the Group's operations performed strongly in competitive markets. Turnover increased by 20 per cent to €221m (2003: €184m) and operating profit was up 11 per cent to €19.7m (2003: €17.8m). Like for like sales growth and the Telfords acquisition completed in October 2003 increased Merchanting sales by 22 per cent. Good like for like sales growth and new store openings enabled Woodie's to increase turnover by 22 per cent.

    Share Redemptions / Purchase

    The Board redeemed the remaining six redeemable shares per Grafton unit for a total cash consideration of 5 cent per Grafton Unit which was paid on 26th March 2004. Following the restructuring of the Group's share capital in June 2004, the Board has now approved the purchase of one A ordinary share per Grafton Unit for 1 cent. The combined cash payments of 6 cent per Grafton Unit represent an increase of 33 per cent on the equivalent share redemption of 4.5 cent paid for the half year to 30 June 2003. No interim dividend will be declared.

    OPERATIONS REVIEW

    TURNOVER AND OPERATING PROFIT - UK AND IRELAND

    Six months to
    30 June 2004
    (unaudited)
    Six months to
    30 June 2003
    unaudited)
    Increase
    €'000 €'000
    Turnover
    Great Britain and Northern Ireland 690.0 522.5 32%
    Republic of Ireland 221.4 184.0 20%
    Total 911.4 706.5 29%
    Operating Profit
    Great Britain and Northern Ireland 50.2 35.6 41%
    Republic of Ireland 19.7 17.8 11%
    Total 69.9 53.4 31%

    The UK results are converted at the average Euro/Sterling rate of exchange for the half year. Sterling was on average 2 per cent stronger in the first half of 2004 compared to the first half of 2003.

    United Kingdom

    UK sales increased by 32 per cent to €690.0m (2003: €522.5m) and operating profit increased by 41 per cent to €50.2m (2003: €35.6m). The operating profit margin increased to 7.3 per cent from 6.8 per cent. All divisions performed strongly and like for like sales increased by 6.8%.

    The UK economy continues to perform well with strong consumer activity, a buoyant housing market and good employment creation supported by low inflation and relatively low interest rates. This has been a very favourable environment for the UK's businesses which trade mainly in the repair, maintenance and improvement markets.

    The excellent half year results from the UK businesses were due to profitable growth in the established merchanting branches and incremental profit from nine acquisitions, with an annualised turnover of €320m, completed during 2003. Further positive scale and integration benefits were derived from turnover more than doubling over the last three years.

    UK Builders Merchanting

    The UK Builders Merchanting division, which trades principally under the Buildbase and Jacksons brands from 150 locations, achieved excellent sales and profit growth. This strong performance was aided by good like for like sales growth in the more established branches, incremental profit from a significant acquisition programme in 2003 and contributions from acquisitions made during the half year. The division also benefited from ongoing integration of prior year acquisitions and purchasing benefits following a substantial acquisition programme during 2002 and 2003 which added sixty one branches. Six bolt-on acquisitions and the greenfield development of two branches in London added eleven branches to the network in the half year. These infill greenfield developments continue to improve our regional coverage.

    Buildbase has been an active participant in the UK Builders Merchanting consolidation process since acquiring its first branch in Oxford in January 1996. Development of the business has been based mainly on the acquisition of long established small chain and single branch merchants with strong local market positions. Buildbase traded strongly in the half year increasing sales and operating profit at higher margins. Substantial profit growth in the established business due to increased sales and purchasing benefits was supplemented by contributions from acquisitions made in 2003.

    Jacksons, the UK's largest regional independent merchanting business prior to acquisition by Grafton in March 2003, traded strongly with good like for like sales growth and a strong advance in operating profit. The nineteen branch East Midlands business is an excellent fit with Buildbase's strength in the South East and West Midlands. We now anticipate that the financial benefits for the enlarged Group as a result of this acquisition will be realised in this its first full year under Grafton ownership rather than in 2006 as stated in the announcement at the time of acquisition. Jacksons increased its presence in the Lincolnshire market in the half year with the completion of a single branch acquisition.

    In Northern Ireland, Macnaughton Blair, one of the leading merchants in the province, traded strongly in a stable market and yielded double digit like for like sales and operating profit growth during the period. The branch network in the province increased to twelve with the acquisition of two builders merchanting businesses trading from branches in Bangor and Coleraine.

    UK Plumbers Merchanting

    The UK Plumbers Merchanting division trades from 140 branches under the Plumbase brand and has a strong regional presence in the South East, Midlands, East Anglia, West Country and Scotland. Sales and operating profit increased strongly in the half year. The results benefited from the acquisition of Plumbline in September 2003. This seventeen branch business, which has a strong position in the Scottish market, traded ahead of pre-acquisition expectations. The ongoing programme of greenfield developments continued with the opening of three new branches.

    UK Mortar

    EuroMix, the UK's leading producer of dry mortar for use in block and brick laying, had a successful half year with a further growth in sales and operating profit. The plant at Harlow, Essex which commenced production in May 2003 grew volumes strongly. The opening of the seventh dry mortar plant in Southampton in July leaves EuroMix well placed to service and support house builders, developers and contractors throughout the South of England.

    Republic of Ireland

    In Ireland, against a favourable economic background, the Group's businesses performed strongly in competitive markets. The Irish economy recovered strongly during the second half of 2003 and this trend continued into 2004. The Group's Irish turnover increased by 20 per cent to €221m (2003: €184m) and operating profit was up 11 per cent to €19.7m (2003: €17.8m). The operating profit margin reduced to 8.9 per cent from 9.7 per cent. This reflected an increase in merchanting margins which was offset by lower profitability in manufacturing, opening costs of 2 new Woodie's DIY stores, the consolidation of lower margins of acquired businesses and higher pension costs.

    Irish Merchanting

    The Irish Merchanting division increased sales by 22 per cent to €138.8m (2003: €114.1m), including like for like growth of 3.4 per cent. Chadwicks increased sales and operating margins in a very competitive market place. The Irish Merchanting division benefited from strong demand in the housing market which was at an all-time high. The Telfords three branch midlands network, acquired in October 2003, traded ahead of expectations and strengthened the Group's position in the region. Telfords also benefited from purchasing synergies as part of the larger merchanting group.

    Irish Retailing

    Woodie's continued to consolidate its market leadership position in the Irish DIY market with turnover growth of 22 per cent to €64.8m (2003: €53.1m) including like for like growth of 6 per cent. Woodie's had an excellent half year increasing operating profit strongly. Two new stores were opened during the period, one in Clonmel and a new flagship store on the Naas Road in Dublin. Stores opened in the second half of 2003 in Cavan and Carlow traded well ahead of budget. These openings increase Woodie's network to eighteen and further store openings are planned over the next two years. Woodie's existing stores in Cork and Bray will be relocated into larger more modern facilities during 2005.

    FINANCE

    Good cash generation in the half year resulted in a strong cash inflow of €92.5m (2003: €45.8m) from operations.

    The Group successfully completed the sale and leaseback of the new Woodie's flagship store on the Naas Road realising a development profit of €6.7m which is separately disclosed in the Profit and Loss account.

    The Group spent €32.4m (2003: €148.0m) on six bolt on acquisitions. Capital expenditure amounted to €45.4m (2003: €37.9m) including a spend of €28.0m (2003: €22.0m) on development projects. The Group's consistent reinvestment of its substantial cashflow on acquisitions and development projects is intended to enhance profits in future years and support the ongoing development of the Group.

    The Group increased its holding in Heiton Group plc to 29.01 per cent in the half year through the acquisition of 5.18 per cent of the ordinary shares in issue at a cost of €13.4m.

    Payments to shareholders through the redemption of redeemable shares amounted to €23.4m (2003: €9.3m). This covered the second redemption payment for 2003 of 6.0 cent per Grafton unit and a further payment of 5 cent per Grafton Unit to redeem the remaining redeemable shares in issue.

    EBITDA interest cover was 8.1 times (2003: 7.8 times). Shareholders' funds were €488.8m at 30 June 2004 (30 June 2003: €410.8m) and net debt amounted to €362.2m (30 June 2003: €307.3m) giving a debt to equity ratio of 74 per cent (30 June 2003: 75 per cent).

    Heiton Group plc

    It was announced on 12 August 2004 that the Boards of Grafton Group plc and Heiton Group plc had agreed the terms of recommended offers to be made by AIB Corporate Finance on behalf of Grafton Group Holdings, a wholly owned subsidiary of Grafton, to acquire the entire issued and to be issued share capital of Heiton Group plc. Heiton Group plc is a builders merchants and DIY retailer in Ireland trading principally under the Heiton Buckley and Atlantic Homecare brands. The Group also operates a specialist builders merchants chain in the UK. In the year ended 30th April 2004 Heiton Group plc reported turnover of €503m and a profit before taxation of €32.8m. The proposed acquisition of Heiton is in line with Grafton's stated strategy of participating in the development of the UK and Irish merchanting and DIY sectors. Grafton believes that Heiton's Irish merchanting and DIY businesses are an excellent strategic fit with Grafton's existing operations and would enhance Grafton's position in the Irish merchanting and DIY markets.

    The proposal, if successful, would result in Grafton Group increasing its shareholding in Heiton from 29% to 100%. As noted in the announcement of the offers on 12 August 2004 the ordinary share offer values 100% of the current issued and to be issued ordinary share capital of Heiton at approximately €336 million, based on the closing price of €6.65 per Grafton Unit on the day before that announcement.

    The proposed acquisition is subject inter alia to approval by Grafton shareholders, Competition Authority approval and valid acceptances being received in respect of not less than 80 per cent of the ordinary shares in Heiton Group plc.

    OUTLOOK

    The Board believes that the Group's strategy of diversifying its earnings base across the UK and Ireland by building strong brands and market positions through organic development and acquisitions should continue to provide a sound basis for profitable growth.

    Despite a tightening of interest rates, the outlook for the UK economy is positive and we expect continued growth in the repair, maintenance and improvement market which is the principal end use market for our UK business. The UK businesses should benefit from synergies and ongoing integration of prior year acquisitions. Current year acquisitions will contribute to future profitability and we continue to seek out acquisition opportunities which we believe will add value for our shareholders.

    The Irish economy is forecast to enjoy further growth in the medium term. Activity in the housing market continues to be strong but we expect demand to moderate from current record levels. A continuation of low interest rates, low inflation, a stronger labour market and a pick up in consumer spending should provide a favourable environment for Chadwicks to grow its RMI business and for further growth in the Woodie's DIY business. Woodie's should also benefit from recent and planned store openings.

    The strong performance in the first half has continued to date in the second half.

    Ends

    Enquiries:

    Michael Chadwick
    Executive Chairman
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Joe Murray
    Murray Consultants
    Telephone: (+353) (01) 498 0300

    Colm Ó Nualláin
    Finance Director
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Ginny Pulbrook
    Citigate Dewe Rogerson
    Telephone: (+44) (0207) 282 2945

    View the full Press Release in PDF format.

    Analyst Conference Call

    Released: 13/08/2004

    n/a

    Recommended Offers For Heiton Group Plc

    Released: 12/08/2004

    n/a

    Potential Recommended Offer for Heiton Group plc

    Released: 06/08/2004

    Further to the announcement by Grafton Group plc ('Grafton') on the 17 June 2004, the board of Grafton confirms that it has reached agreement in principle with Heiton Group plc ('Heiton') on the terms of a possible offer by Grafton to acquire the entire issued and to be issued ordinary share capital of Heiton (the 'Revised Possible Offer').

    The Revised Possible Offer, which is at an agreed level that the board of Heiton has indicated it would be prepared to recommend for acceptance to Heiton shareholders, if made, is at a price of €2.64 in cash and 0.58667 of a new Grafton unit for each Heiton ordinary share. It is the intention of Grafton to announce a firm intention to make an offer as soon as practicable. Based on the closing price of €6.76 per Grafton unit on 5 August 2004, the latest practicable date prior to the making of this announcement, the Revised Possible Offer values each Heiton Ordinary Share at €6.606.

    The offer of €2.64 in cash and 0.58667 of a new Grafton unit per Heiton ordinary share is final and will not be increased except that, in the event that a competitive situation arises, or an alternative third party proposal emerges, Grafton reserves the right to revise any term of the offer.

    The Irish Takeover Panel (the 'Panel') announced on 21 July, 2004 that, except with the consent of the Panel, by 5.00 p.m. on Friday 6 August 2004 Grafton must either announce an offer for Heiton under Rule 2.5 of the Irish Takeover Rules or announce that it will not proceed with an offer for Heiton. Following a request from Grafton and Heiton, the Panel has agreed that the deadline of 5.00 p.m. on Friday 6 August is no longer applicable and will be extended to 5.00 p.m. on 13 August 2004. The extension was granted to facilitate the making of a recommended firm intention offer announcement, which Grafton have confirmed their intention to make prior to the extended deadline.

    This announcement does not constitute an offer and, therefore, there can be no certainty that an offer will result.

    Any person who is the holder of 1 per cent. or more of any class of shares in Heiton may be required to make disclosures pursuant to Rule 8.3 of the Irish Takeover Rules effective from 17 June 2004 (the commencement of the offer period).

    Ends

    Enquiries:

    Joe Murray
    Murray Consultants
    Telephone: +353 1 498 0300
    Mobile: +353 86 253 4950

    Alan Doherty
    AIB Corporate Finance
    Telephone: + 353 1 667 0233

    Stephen Donovan
    Linda Hickey
    Goodbody Stockbrokers
    Telephone: + 353 1 667 0400

    Additional information:

    The directors of Grafton accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the directors of Grafton (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.

    AIB Corporate Finance Limited, which is regulated by the Irish Financial Services Regulatory Authority, is acting exclusively for Grafton and no one else in connection with the possible offer for Heiton and will not be responsible to anyone other than Grafton for providing the protections afforded to clients of AIB Corporate Finance Limited or for providing advice in relation to any such possible offer.

    Possible Offer for Heiton Group plc

    Released: 17/06/2004

    Grafton Group plc ("Grafton") announces that it has been in discussions with the Board of Heiton Group plc ("Heiton") with regard to a possible offer to acquire the entire issued and to be issued ordinary share capital of Heiton (the "Possible Offer"). The discussions culminated in a proposal to the Board of Heiton on the basis of receiving a recommendation from the Board of Heiton and amounted to €6.35 per Heiton share to be satisfied by way of a mix of cash and Grafton shares and assumed that no further dividends would be paid on the ordinary shares of Heiton. Grafton's intention would be to satisfy the Possible Offer by way of circa 40% cash and circa 60% shares with a mix and match facility. The Possible Offer would value the whole of Heiton's fully diluted share capital at over €325 million. The Board of Heiton rejected this proposal. Grafton continues to review its strategic options, including the possibility of making an offer for Heiton.

    The possible acquisition of Heiton would be in line with Grafton's stated strategy of participating in the consolidation of the UK and Irish merchanting sectors. Grafton believes that the acquisition of Heiton would create an Irish builders merchant and DIY group with the potential to develop nationally and internationally in competition with major players in the industry.

    This announcement does not constitute an offer, and Grafton does not currently have a firm intention to make such an offer. There can be no certainty that any offer will ultimately be made.

    A further announcement will be made in due course.

    A holder of 1% or more of the shares of Heiton or Grafton may have disclosure obligations under Rule 8.3 of the Irish Takeover Panel Act, 1997, Takeover Rules, 2001, effective from the date of this announcement.

    Ends

    Enquiries:

    Michael Chadwick
    Executive Chairman
    Colm Ó Nualláin
    Finance Director
    Grafton Group plc
    Telephone: +353 1 2160600

    Joe Murray
    Murray Consultants
    Telephone: +353 1 498 0300
    Mobile: +353 86 253 4950


    Alan Doherty
    Peter Coyne
    AIB Corporate Finance
    Telephone: +353 1 667 0233

    Stephen Donovan
    Linda Hickey
    Goodbody Stockbrokers
    Telephone: +353 1 6670400

    Additional information:

    The directors of Grafton accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the directors of Grafton (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.

    AIB Corporate Finance Limited, which is regulated by the Irish Financial Services Regulatory Authority, is acting exclusively for Grafton and no one else in connection with the possible offer for Heiton and will not be responsible to anyone other than Grafton for providing the protections afforded to clients of AIB Corporate Finance Limited or for providing advice in relation to any such possible offer.

    Trading Statement

    Released: 15/06/2004

    The Group has continued to experience favourable trading conditions in the UK and Ireland during the first half of the year and this has been reflected in good sales growth, in addition to strong integration led growth in the UK. Group profits in the half year are expected to be materially ahead of market expectations.

    In the UK, Group operations continue to benefit from the synergies associated with the larger acquisitions completed during 2003 and UK operating margins are improving in line with market expectations. Recent acquisitions are also performing well. The new EuroMix Dry Mortar plant in Southampton is scheduled to commence production later this month.

    Sales growth in Ireland has benefited from the recent spell of fine weather and both Irish Merchanting and Woodie's DIY turnover improved. Woodie's DIY new flagship store on the Naas Road opened successfully over the June Bank Holiday weekend, bringing the Woodie's store network to 18.

    Turnover in the first six months of 2004 is expected to exceed last year's levels by over 20 per cent and this is also reflected in significantly increased levels of operating profit. Group operating profit before goodwill amortisation for the half year is anticipated to increase by over 25 per cent on the same period in 2003.

    Ends

    Enquiries:

    Michael Chadwick
    Executive Chairman
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Colm Ó Nualláin
    Finance Director
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Joe Murray
    Murray Consultants
    Telephone: (+353) (01) 498 0300

    Ginny Pulbrook
    Citigate Dewe Rogerson
    Telephone: (+44) (0207) 282 2945

    AGM Statement

    Released: 11/05/2004

    Grafton continues its successful strategy of building on its strong market positions and brands in the UK and Ireland by participating in both the ongoing consolidation opportunities in the market and in greenfield developments. For the first quarter of 2004, in line with our expectations, the Group has returned good growth in earnings.

    Once again the UK merchanting businesses have yielded strong acquisition led growth together with increased like for like sales and improving operating margins in a favourable trading environment. The businesses acquired during 2003, in particular the two larger acquisitions Jackson Building Centres and Plumbline Supplies, continue to trade strongly. Since the start of the year the Group has completed 6 acquisitions in the UK adding circa €60 million to Group turnover on an annual basis. EuroMix, the Group's silo mortar division, continues to increase sales and profitability. A new plant in Southampton, its seventh in the UK, is on schedule to open in July. The Group now trades from over 290 locations in the UK.

    Buoyant trading conditions persist in Ireland. The Group's Irish merchanting business continues to benefit positively and this is reflected in good like for like sales growth and a further improvement in profits. The Telford builders merchanting business acquired in October 2003 is performing strongly. Woodie's DIY continues to show like for like sales growth and the two stores opened during 2003 are trading well. The store opened in Clonmel during March this year also had a good start to trading. Woodie's DIY now trades from 17 locations with the new flagship Naas Road, Dublin store on schedule to open in June. Further store openings already announced will bring the store network to 22 stores.

    The Group remains confident of continued growth in profits and earnings per share in 2004.

    Ends

    Enquiries:

    Michael Chadwick
    Executive Chairman
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Colm Ó Nualláin
    Finance Director
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Joe Murray
    Murray Consultants
    Telephone: (+353) (01) 498 0300

    Ginny Pulbrook
    Citigate Dewe Rogerson
    Telephone: (+44) (0207) 282 2945

    Preliminary Announcement of Results for the Year ended 31 December 2003

    Released: 10/03/2004

    Highlights

    • Pretax profits 27 per cent higher at €102m
    • Sales increase by 30 per cent to €1.5bn
    • Operating profits before goodwill up 34 per cent to €123.3m
    • EPS before goodwill and exceptionals increase by 22 per cent to 45.07c
    • 24 per cent rise in redeemable share redemption
    • 37 per cent rise to over €1bn brings UK sales to 74 per cent of Group sales
    • UK operating profit before goodwill increases 46 per cent to €78.6m
    • Jacksons performs ahead of expectations
    • Irish operating profit up 16 per cent to €44.8m
    • €289m spend on acquisitions and capex
    • Ten acquisitions completed in 2003

    Commenting on the results today, Michael Chadwick, Chairman said:

    "Grafton maintained the momentum of consistently strong profitable growth in 2003. The performance reflects the successful strategy of diversifying earnings both geographically and across sectoral markets. Growth was accelerated by an acquisition and capex spend of €289m, which included our largest ever acquisition of Jackson Building Centres. We are currently ideally placed to continue growing the business organically and by acquisition. Trading has started well in 2004 and the Group looks forward with confidence to a year of further progress and improved earnings ".

    Grafton Group plc is pleased to announce that 2003 has been another year of excellent progress and that record sales, profits and earnings have been achieved.

    • Sales were up 30 per cent to €1.5 billion (2002: €1.15 billion).
    • Operating profit before goodwill increased by 33.6 per cent to €123.3 million (2002: €92.3 million).
    • Profit before tax increased by 27 per cent to €102.0 million (2002: €80.2 million).
    • Earnings per share before goodwill and property profit increased by 21.8 per cent to 45.07 cent (2002: 36.99 cent).

    The Board has decided to redeem one redeemable share per Grafton Unit for a cash consideration of 6.0 cent payable on 19 March 2004, giving total redemption payments for the year 2003 of 10.5 cent. This represents an increase of 23.8 per cent on redemptions of 8.48 cent paid for 2002. The Board has also decided to redeem the remaining six redeemable shares per Grafton Unit for a total cash consideration of 5 cent payable on 19 March 2004. As a result of the final redemption of all remaining redeemable shares in issue, the Board does not expect that an interim dividend will be paid in 2004.

    The weighted average number of shares in issue increased by 10.7 per cent to 206.66 million (2002: 186.72 million) following the one for five rights issue in March 2003. The comparative earnings and redemption per share amounts for 2002 have been adjusted for the bonus element of the rights issue.

    The results for 2003 are based on a strong performance across the Group's businesses and demonstrate the core strengths and quality of the Group's brands in the UK and Ireland. During 2003 the Group comfortably undertook a range of acquisition and development initiatives intended to strengthen its market position and provide a stronger base for the future profitable growth of its market leading businesses.

    In a further strengthening of the Board, the Nomination Committee has commenced a search for two additional Non-executive Directors whose appointment will reflect the scale and geographical spread of the Group's interests. The Group has already announced that Mr. Norman Kilroy will be retiring as Managing Director in April 2004 having reached retirement age. He will continue as a Non-executive Director until later this year.

    In 2003 the Group maintained the momentum of consistently strong profitable growth which has been a feature of its results since becoming an independent public company in 1987. The results for 2003 also reflect the benefit of the Group's strategy of diversifying its earnings base both geographically and across the construction sector and related markets.

    2003 was a year of substantial progress for the Group's UK businesses with turnover exceeding the equivalent of €1 billion for the first time. UK turnover grew by 37 per cent to €1.1 billion (2002: €808.5 million) and represented 74 per cent of Group turnover. UK operating profit before goodwill amortisation increased by 46 per cent to €78.6 million (2002: €53.7 million) contributing 64 per cent of Group operating profit (2002: 58 per cent). The UK operating profit margin increased as anticipated to 7.1 per cent (2002: 6.6 per cent).

    In line with the Group strategy of actively participating in the ongoing consolidation in the UK builders merchanting market, nine acquisitions were completed during 2003. The acquired businesses included Jackson Building Centres which was the largest ever acquisition undertaken by the Group and Plumbline, Scotland's largest independent plumbers merchanting chain trading from seventeen branches. Seven bolt-on acquisitions trading from twelve branches were also completed. The nine acquisitions together with the greenfield development of ten branches added 57 trading locations to the Group's UK merchanting network.

    EuroMix, the Group's UK dry mortar business continued to benefit from its brand and market leadership position showing excellent growth in turnover and profit. A sixth mortar plant at Harlow, Essex commenced trading in May and EuroMix's seventh Dry mortar plant is now under construction in Southhampton.

    In the Republic of Ireland, the Group experienced strong turnover and profit growth on the back of a very buoyant market for both new residential building and repair maintenance and improvement work. Turnover increased 11.8 per cent to €384.5 million (2002: €343.8 million) and operating profit was up 16.0 per cent to €44.8 million (2002: €38.6 million). The operating profit margin increased to 11.6 per cent (2002: 11.2 per cent).

    Chadwicks Limited, the Group's leading Irish merchanting company, completed a significant Irish acquisition with the purchase in October 2003 of Telfords, a three branch builders merchant based in the Midlands. Further development of the Irish merchanting and DIY businesses continued with the opening of two Chadwicks Plumb Centres in Galway city and North Dublin and two Woodie's DIY stores opened in Cavan and Carlow.

    The Group's operations continue to be strongly cash generative. Cash flow generated internally amounted to €129.8 million for the year and these funds together with the €67.3 million proceeds of the Rights issue part funded an expansive investment programme which resulted in over €289.4 million being invested in acquisitions and capital programmes. Shareholders funds were €449.8 million at the year end and the net debt to equity ratio was 69% (2002: 75%).

    Operations Review - United Kingdom

    UK sales increased by 37 per cent to €1.1 billion (2002: €808.5 million) and operating profit increased by 46 per cent to €78.6 million (2002: €53.7 million). Consistent with margin improvements achieved in recent years, the UK operating profit margin increased to 7.1 per cent (2002: 6.6 per cent). The UK operating profit margin has over the past five years increased from 3.0 per cent in 1998 to 7.1 per cent in 2003 due to increased scale, buying benefits and operational efficiencies.

    The results of the UK business benefited from a strong performance in like for like activities, incremental profit from an active acquisition programme completed in 2002 and a strong initial ten month contribution from the Jacksons acquisition. Like for like merchanting sales increased by 5.4 per cent.

    The first phase of improved operational efficiency and purchasing benefits have been realized and are included in the results for the year and are reflected in the continuing increase in operating margin being achieved in the UK. Additional gains are anticipated during 2004.

    Sterling was on average 9 per cent weaker during 2003 when compared to 2002 and accordingly the underlying increase in profit in the UK businesses was in fact higher in local currency terms.

    The results for 2003 demonstrate the UK managements' success in taking advantage of opportunities presented in a consolidating market and improving profitability in the enlarged business.

    UK Builders Merchanting

    The UK builders merchanting business, trading principally under the Buildbase and Jackson brands, had a year of very strong growth in sales and operating profit.

    Buildbase, now regarded as a leading player in the UK merchanting market with strong brand recognition and an integrated branch network, had another excellent year increasing sales and operating profit strongly. The improved performance resulted mainly from solid like for like sales growth and significant progress in integrating a number of small chain and single branch acquisitions completed during 2002.

    The division benefited from good like for like sales growth in a positive RMI market and from very good progress on integration of the 31 builders merchanting branches acquired during 2002. The 18 branch Jackson acquisition added critical mass to the division and continues to perform ahead of expectations. A further seven UK builders merchanting businesses acquired in 2003 traded from 12 branches. In addition the division developed three greenfield branches.

    The successful acquisition of Jacksons on 3 March 2003 was in line with the Group's strategy of expanding its presence in the UK Merchanting market and represented a unique opportunity for Grafton to expand its builders merchanting presence into the East Midlands region by acquiring the leading player in that market and one of the UK's most respected merchanting businesses.

    As previously announced, it is anticipated that the annual synergies and cost savings for the enlarged Group will be achieved ahead of the estimates and in advance of the time frame contained in the original acquisition announcement.

    Jacksons improved profitability in 2003 and achieved good like for like sales growth, cost savings and improved purchasing benefits due to membership of the enlarged group. The planned further development of the Jacksons business includes the opening of a greenfield branch in Louth, and refurbishment of the Swinton, South Yorkshire branch with a new purpose built facility.

    In Northern Ireland Macnaughton Blair, the leading Merchant in the region, traded from ten branches and had another excellent year increasing sales and operating profit in a competitive market. Good like for like sales growth, purchasing benefits and a full year contribution from the Peter Woods acquisition made at the end of 2002 all contributed strongly to the company's improved performance.

    UK Plumbers Merchanting

    Plumbase the UK plumbers merchanting chain increased sales and profit. Good sales growth, a full year contribution from acquisitions made at the end of 2002 and a contribution in the last quarter from the Plumbline acquisition contributed to an improved level of profitability in Plumbase.

    Plumbase, one of the UK's largest plumbers merchanting chains, increased its branch network by 24 in 2003 and traded from 137 branches at the year end. The Plumbase branch network, which was concentrated in the South East, Midlands, East Anglia, West Country and North West, expanded into Scotland with the acquisition of Plumbline, the leading independent plumbers merchant trading from 17 branches. The three month contribution from Plumbline was in line with expectations and this acquisition offers opportunity for further profit growth in 2004.

    The nine branch JKS and B J White acquisitions made at the end of 2002 were successfully integrated into the Plumbase network in 2003 and made a good contribution to profit.

    Plumbase has successfully developed its branch network through a combination of acquisitions and greenfield development and this approach continued in 2003 with the opening of seven greenfield branches.

    UK Mortar

    EuroMix, the leading producer of dry mortar in the UK market, continued to consolidate its brand leadership position in this important growth segment of the residential and non-residential building market. The business grew volumes strongly and reported excellent growth in sales and operating profit.

    EuroMix supplies a range of dry mortars for use in block and brick laying from six plants in the London, Birmingham, Manchester and Glasgow areas. The sixth plant at Harlow, Essex commenced production in May 2003 and the plant at Glasgow increased its capacity following a major investment programme. The EuroMix business has developed a strong reputation for the quality and range of its value added mortar and render products and also for the service and technical support available to its national, regional and local contractor customer base. During the year construction of the seventh EuroMix dry mortar plant in Southampton commenced with production scheduled to start in Summer 2004.

    Operations Review - Republic of Ireland

    Irish turnover increased by 11.8 per cent to €384.5 million (2002: €343.8 million) and operating profit increased by 16.0 per cent to €44.8 million (2002: €38.6 million). The operating profit margin increased to 11.6 per cent (2002: 11.2 per cent).

    The Irish economy proved remarkably resilient during 2003 despite a weak global economic environment. While overall construction output is estimated to have shown only modest growth the residential sector had a very strong year with completions of 68,800 units compared to 57,700 units in 2002. Demand also continued to be strong in the repair, maintenance and improvement market.

    Irish Merchanting

    The Irish Merchanting division increased sales by 11.5 per cent to €239.8 million (2002: €215.0 million) including like for like growth of 8 per cent.

    Chadwicks builders and plumbers merchanting business traded strongly, increasing sales and operating profit due to volume growth and tight operational management of the business. The resumption of growth in residential construction activity in the second half of 2002 continued strongly during 2003. Chadwicks national branch network was well positioned to benefit from record activity in new residential building and a buoyant RMI market where it has a significant presence.

    Chadwicks continued its successful programme of branch relocations from provincial town centre premises to high profile purpose built out of town sites. The relocation of the Wexford branch at the end of 2003 follows the successful relocation of the Clonmel and Kilkenny branches during 2002. Each new site has increased capacity providing operational efficiency and improved customer service.

    The acquisition, in October 2003 of Telfords, a long established three branch builders merchant based in Portlaoise, has significantly strengthened Chadwicks presence in the Midlands market. Telfords traded ahead of pre-acquisition expectations and made a positive contribution to profitability in its first three months with the Group.

    Chadwicks also increased its branch network with the greenfield development of two Plumb Centre branches in Galway and North Dublin.

    Irish Retailing

    Woodie's had another excellent year with significant turnover and profit growth. Turnover increased by 12.4 per cent to €110.3 million (2002: €98.1 million). Woodie's like for like sales growth was 4 per cent despite a weak Irish retail environment. Like for like operating profit improved as a result of volume growth, increased product margin due to sourcing benefits, a continuous focus on range improvement and control of store overheads.

    New store openings in Cavan in August 2003 and Carlow in October 2003 increased Woodie's store network to 16. Both stores traded successfully. Woodie's results also benefited from a full year contribution from the Tralee and Newbridge stores which opened during 2002. Woodie's seventeenth store at Clonmel opened earlier this month. Woodie's have announced plans to open further stores at Naas Road, Dublin, Limerick, Kilkenny and Naas which will bring the network to 21 over the next two years.

    Irish Manufacturing

    Manufacturing turnover increased by 12.1 per cent to €34.4 million (2002: €30.7 million) due substantially to volume growth by CPI's EuroMix silo mortar business which supplies the Greater Dublin area.

    Finance

    The Group's businesses continued to be strongly cash generative during 2003. Cashflow from operating activities amounted to €129.8 million (2002: €109.3 million).

    The cost of making the ten acquisitions in 2003 was €220.1 million (2002: €88.8 million) and capital expenditure amounted to €69.3 million (2002: €68.0 million). Total acquisition and capital expenditure was €289.4 million (2002: €156.8 million).

    Capital expenditure of €69.3 million included the opening of 15 greenfield locations and continued development of the UK mortar business.

    During 2003, the Group took advantage of historically low long term interest rates to increase its fixed interest rate debt to half of total debt while interest cover improved to 7.5 times (2002: 7.4).

    Shareholders funds increased by €127.9 million to €449.8 million (2002: €322.0 million) including €67.3 million raised in the one for five Rights Issue completed in March 2003 to part fund the acquisition of Jacksons.

    Net debt at 31 December 2003 was €311.7 million (2002: €240.6 million) and the net debt to equity ratio was 69 per cent (2002: 75 per cent).

    The Group realised a profit of €3.4 million on disposal of surplus land principally at Stanford-le-Hope, Essex a site that originated as surplus property on acquisition of British Dredging in 1998. The Group has already announced that the sale of freehold property on the Naas Road, Dublin acquired during 2002 has been completed. A new flagship Woodie's DIY store will be developed on the site and is scheduled for completion during the third quarter of 2004. It is anticipated that a profit in excess of €6 million will be realised and accounted for in 2004 on successful completion of the development.

    Group Outlook

    The Group's strong cashflows, balance sheet and interest cover leave it ideally placed to grow its businesses organically and by acquisition.

    Economic conditions in the UK are expected to continue to underpin demand in the repairs, maintenance and improvement sector. The UK merchanting business will benefit from organic growth, ongoing integration and scale related purchasing benefits being realized through the significant increase in the Group's business. The EuroMix mortar business is expected to continue on a significant growth path with completion of the seventh plant in Southampton.

    Although there has been a gradual improvement in the Irish economy in recent months and the economic outlook for 2004 is positive, we expect that a number of the factors which have influenced record levels of house completions in Ireland in recent years to moderate leading to a gradual slow down to long term sustainable levels of new house building. Improved consumer sentiment and higher real disposable incomes should provide a favourable environment for Chadwicks to grow its RMI business and for continued growth in the Woodie's DIY business. Woodie's will also benefit in 2004 from a full year's contribution from the two stores opened in the second half of 2003, the recent store opening in Clonmel and from further store openings planned.

    Trading has started well in 2004 and the Group looks forward with confidence to another year of further progress and improved earnings.

    Ends

    Enquiries:

    Michael Chadwick
    Executive Chairman
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Joe Murray / Grainne O'Brien
    Murray Consultants
    Telephone: (+353) (01) 498 0300

    Colm Ó Nualláin
    Finance Director
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Ginny Pulbrook
    Citigate Dewe Rogerson
    Telephone: (+44) (0207) 282 2945

    View the full Press Release in PDF format.

    Development Update

    Released: 08/01/2004

    In the year ended December 31st, 2003 Grafton Group plc completed 10 acquisitions for a total consideration in excess of €200 million. Each of the larger acquired businesses, Jacksons, Plumbline and Telfords, continues to trade in line with or ahead of initial expectations. In a year of strong growth, Group earnings are expected to be in line with market forecasts.

    Throughout the year, the Group continued to implement its successful strategy of growth through acquisition and organic development. The acquisitions added 50 branches to the Group's network. Greenfield developments of 12 merchanting outlets, 2 Woodie's DIY stores and a Dry Mortar plant added a further 15 locations, bringing the Group's network to a total of over 330 locations in the UK and Ireland. Six of these acquisitions were made in the second half of the year.

    The Group has completed the sale and leaseback of the Naas Road property acquired in 2002 on which a new flagship Woodie's DIY store is scheduled for completion during the third quarter of 2004. It is anticipated that a book profit in excess of €6 million will be realised and accounted for in 2004 on successful completion of the development.

    Further organic growth is planned for 2004 with the development of greenfield merchanting locations, the completion of the 7th Dry Mortar plant in the UK and new Woodie's DIY store openings in Ireland. The Group also expects to benefit from its healthy pipeline of potential acquisitions.

    Ends

    Enquiries:

    Michael Chadwick
    Executive Chairman
    Grafton Group plc
    Telephone: (+353)(01) 216 0600

    Colm Ó Nualláin
    Finance Director
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Joe Murray
    Murray Consultants
    Telephone: (+353) (01) 498 0300

    Ginny Pulbrook
    Citigate Dewe Rogerson
    Telephone:(+44)(0207) 282 2945

    2003
    Date Title
    06 October 2003 Grafton Group plc Announces Two Further Acquisitions
    08 September 2003 Grafton Group plc Interim Results for the six months
    02 July 2003 Development Update
    09 May 2003 AGM Statement
    10 March 2003 Preliminary Announcement of Results for the Year ended 31 December 2002
    03 March 2003 Grafton Group Announces Completion of Jackson Acquisition
    28 February 2003 Grafton Group plc Result Of Extraordinary General Meeting
    04 February 2003 Estimated Trading Results for 2002 Proposed Acquisition of Jackson Building Centres Limited and Rights Issue

    Grafton Group plc Announces Two Further Acquisitions

    Released: 06/10/2003

    Grafton Group plc is pleased to announce the acquisition of The Telford Group Limited in Ireland and Plumbline Supplies Limited in Scotland.

    Plumbline is Scotland's leading independent plumbers merchant with 17 branches. The company reported sales of €40 million for the year ended July 31st, 2003. Grafton's plumbing network in the UK trades under the Plumbase brand and this acquisition brings the network into Scotland for the first time. Plumbase will now have a total of 135 branches in the UK.

    Telfords has three branches and is based in Portlaoise. The company holds a leading position in the midlands builders merchanting market and the acquisition enhances Grafton's coverage in that area. Telford's sales for the year ended January 31st, 2003 were €27m.

    The cash consideration for both companies totals €40m.

    Commenting on the announcement today, Michael Chadwick, Chairman of Grafton said: "The Plumbline acquisition gives the Group an initial but important presence in the Scottish plumbers merchanting market. We already have strong market positions in the south and in the midlands of England.

    The Telford acquisition is significant in strengthening our presence in the midlands. We will now have branches in Portlaoise, Athy and Mountrath.

    We are committed to the continued growth of our branch network in Ireland as well as overseas."

    Ends

    Enquiries:

    Michael Chadwick
    Executive Chairman
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Colm Ó Nualláin
    Finance Director
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Charles Rinn
    Group Financial Controller
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Joe Murray
    Murray Consultants
    Telephone: (+353) (01) 498 0300

    Ginny Pulbrook
    Citigate
    Telephone:(+44) (0207) 282 2945

    Grafton Group plc Interim Results for the six months

    Released: 08/09/2003

    • Pretax profits up 32 per cent to €41.7m (€31.6m)
    • Adjusted EPS increased 25 per cent to 19.63c (15.68c)
    • Operating profit before goodwill up 40 per cent to €53.4m (€38.2m)
    • Increase of 27 per cent in redemption of Redeemable Shares
    • Operating cash flow 45 per cent higher at €45.8m
    • Acquisition spend of €148m in first half
    • EBITA interest cover 6.3 times and debt equity ratio 75 per cent
    • UK contributes 67 per cent of operating profit and 74 per cent of turnover
    • Jacksons acquisition performs ahead of expectations
    • Five additional UK acquisitions completed since 1st January
    • 7 New merchanting stores takes UK network to 254
    • Irish operating profit up 19 per cent
    • Woodie's DIY to increase network to twenty stores

    Commenting on the interim results, Michael Chadwick, Chairman said:

    "We are confident of continued profitable growth through organic development and acquisition and expect profitability and earnings in the second half to be ahead of last year. The Group is well funded to continue its acquisition programme and has a healthy pipeline of attractive acquisition and development opportunities going forward. The major Jackson acquisition has already proved successful and has performed ahead of expectations since acquisition."

    GRAFTON GROUP PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE

    Grafton Group plc is pleased to report on a period of significant progress for the Group and the achievement of record sales, profits and earnings for the six months to 30 June 2003.

    Sales for the six months were up 32 per cent to €706.5 million (2002: €534.8 million).

    Profit before tax increased by 32 per cent to €41.7 million (2002: €31.6 million).

    Earnings per share before goodwill amortisation (adjusted earnings per share) increased by 25 per cent to 19.63c (2002: 15.68c).

    Operating profit before goodwill amortisation was up 40 per cent to €53.4 million (2002: €38.2 million) at an improved margin of 7.6 per cent (2002: 7.1 per cent).

    The Board has decided to redeem one redeemable share per Grafton Unit for a cash consideration of 4.50 cent. This represents an increase of 27 per cent on the equivalent share redemption paid in September 2002.

    Following the one for five rights issue in March 2003, the weighted average number of shares in issue increased by 14 per cent to 201.0 million (2002: 175.6 million). The comparative interim and full year earnings per share and redemption per share amounts for 2002 have been adjusted for the bonus element of the rights issue (see note 3).

    In the UK, the Group's most important market, turnover grew by 41 per cent to €523 million and represented 74 per cent of Group turnover (2002: 69 per cent). UK operating profit, before goodwill amortisation, increased by 54 per cent to €35.6 million contributing 67 per cent of Group operating profit (2002: 61 per cent). The strategy of growing the Group's earnings base by developing a profitable business of scale in the UK is proving successful. The acquisition of Jacksons in March 2003 was a significant milestone for the Group and strengthened its position as the UK's fourth largest merchant with a market share of circa 8 per cent.

    In addition to Jacksons, the Group acquired three single branch merchanting businesses during the half year and opened seven greenfield merchanting branches in the UK. Since June, the acquisition of a further two merchanting businesses was completed increasing the number of UK builders merchanting branches to 137. EuroMix, the Group's dry mortar business, had an excellent half year and opened its sixth plant at Harlow, Essex in May.

    A continuation of the strong trading performance of the Group's Irish businesses experienced in the second half of 2002 is reflected in a 12 per cent increase in Irish turnover to €184 million with operating profit increasing by 19 per cent to €17.8 million.

    While the macro economic environment in Ireland continued to weaken, strong residential housing and RMI activity continued for the first half of 2003. Irish merchanting sales were up 10 per cent on a like for like business base when compared to a slower first half experienced last year. The Irish retail environment showed only modest volume growth in the half year however Woodie's DIY increased sales by 16 per cent including strong like for like growth of 6 per cent.

    Turnover and Operating Profit - UK & Ireland

    Six months to
    30 June 2003
    (unaudited)
    Six months to
    30 June 2002
    (unaudited)
    Increase
    €'000 €'000
    Turnover
    Great Britain and Northern Ireland 522.5 370.6 41%
    Republic of Ireland 184.0 164.2 12%
    Total 706.5 534.8 32%
    Operating Profit
    Great Britain and Northern Ireland 35.6 23.2 54%
    Republic of Ireland 17.8 15.0 19%
    Total 53.4 38.2 40%

    The UK results are converted at the average Euro / Sterling rate of exchange for the half year. Sterling was on average 9 per cent weaker in the first half of 2003 compared to the first half of 2002 and accordingly the underlying increase in Grafton's UK activities was better when expressed in Sterling.

    OPERATIONS REVIEW

    United Kingdom

    UK sales increased by 41 per cent to €522.5 million (2002: €370.6 million) and operating profit increased by 54 per cent to €35.6 million (2002: €23.2 million). The operating margin increased to 6.81 per cent from 6.25 per cent. All divisions reported good sales and profit growth. Excluding acquisitions, merchanting sales grew by 6 per cent.

    The repair, maintenance and improvement market, to which the Group's merchanting business is primarily exposed, was strong in the half year against a positive background of low interest rates and high employment. The results benefited from like for like sales growth and a strong performance by the Jacksons business in the four months since acquisition. The profitable integration and ongoing development of prior year acquisitions boosted the effect of an active acquisition programme in 2002, which involved the completion of fifteen transactions and added forty one branches to the UK network.

    The acquisition of Jacksons and the completion of a further five acquisitions, including two since the end of June, increased the UK merchanting network by twenty four branches. Greenfield developments added a further seven branches and the Group now trades from two hundred and fifty four merchanting locations in the UK. These developments further underline the Group's ability to successfully integrate acquisition opportunities and enhance its regional presence in the UK merchanting market.

    UK Builders Merchanting

    The Group's UK builders merchanting division, trading principally under the Buildbase and Jackson brands had a very good half year substantially increasing sales and operating profit, both in total and like for like businesses.

    The acquisition of Jacksons, the UK's largest regional independent merchanting business previously ranked seventh in the BMF's league table of merchants, was completed on 3 March 2003. Jacksons has materially increased the size of the UK Builders Merchanting division, enabling the Group to widen its geographic coverage and gain a valuable presence in the East Midlands market. The business trades from eighteen branches and turnover was £133.8 million in 2002 (€212.8 million). The trading performance since acquisition has been ahead of expectations. It is anticipated that the annual synergies and cost saving for the enlarged Group will be comfortably ahead of the acquisition announcement time frame. Jacksons is a well managed and reputable merchanting business with high visibility branding and a quality branch network which enjoys a leading market position in the East Midlands. It is an ideal geographic fit with the Group's strong builders merchanting presence in the South East, Midlands and North of England.

    Buildbase, now an established brand and leading business in the UK merchanting market, increased sales and profits strongly in the half year. The results benefited from like for like sales growth, integration benefits from prior year acquisitions and the incremental effect of acquisitions made during 2002.

    In Northern Ireland, Macnaughton Blair, the Group's ten branch merchanting business, had a successful half year. Increased profitability was derived from good like for like sales growth, the re-development of two branches carried out during 2002 and the first half contribution from the acquisition in October 2002 of Peter Woods, a significant single branch business in Belfast.

    UK Plumbers Merchanting

    Plumbase, one of the UK's largest plumbers merchanting chains with a strong presence in the South and Midlands, continued to perform strongly increasing both sales and operating profit. Good like for like branch sales growth was achieved and the overall growth of the division was enhanced by the incremental effect of the JKS and B J White acquisitions made at the end of 2002. Both businesses were integrated into the Plumbase network and traded successfully in the half year. Plumbase continued to expand its branch network with the opening of four branches.

    UK Mortar

    EuroMix, a provider of a range of factory produced mortars for use in blocklaying and bricklaying, traded successfully in the half year increasing sales and operating profits strongly. The division, which has developed a quality product offering of dry mortar based products in the UK, has gained a strong market position and continues to grow volumes and consolidate its market leadership. In May, a new plant was opened in Harlow, Essex bringing the number of dry mortar plants operated by EuroMix in the UK to six.

    Republic of Ireland

    The strong performance reported by the Group's Irish businesses for the second half of 2002 continued during the half year despite a slowing economy. Solid growth in sales and operating profit was achieved in the half year. Sales increased by 12 per cent to €184 million (2002: €164.2 million) and operating profit rose by 19 per cent to €17.8 million (2002: €15 million) resulting in an increase in Irish margins to 9.7 per cent from 9.1 per cent in 2002.

    Irish Merchanting

    Following a continuation of high levels of new build activity in the residential housing market and a strong RMI market, the Group's Irish merchanting business increased sales by 10 per cent to €114.1 million (2002: €103.5 million). The division achieved good operating profit growth in the half year, benefiting from volume growth, cost control and tight credit management. During the half year, Chadwicks opened a new Plumb Centre in Galway and work commenced on the construction of a new branch premises in Wexford to provide for the re-location from the existing town centre branch to a high profile purpose built out of town site in early 2004.

    Irish Retailing

    Woodie's enhanced its market leadership in the Irish DIY market with turnover growth of 16 per cent to €53.1 million (2002: €45.8 million). Like for like sales increased 6 per cent. Woodie's turnover during the period benefited from the contribution of new stores opened in Tralee and Newbridge during 2002. Both stores traded successfully. Underlying profit levels continued to improve on the back of better buying terms and tight cost control.

    In August 2003, Woodie's opened its fifteenth store in Cavan and has announced plans to open a further five stores over the next two years in Carlow, Clonmel, Limerick, Kilkenny and the Naas Road, Dublin to take its network of DIY stores in Ireland to twenty.

    Irish Manufacturing

    Manufacturing turnover increased by 12 per cent to €16.8 million (2002: €15 million) benefiting in particular from strong growth in EuroMix silo mortar turnover in the Greater Dublin area.

    Finance

    The Group produced strong cashflows in the half year generating €45.8 million (2002: €31.6 million) from operating activities. Cash outflow on acquisitions including acquired debt was €148 million (2002: €19.9 million). Capital expenditure amounted to €37.9 million (2002: €35.6 million) including a spend of €22.0 million on development initiatives. The total cash outflow in the half year on acquisitions and capital expenditure was €185.9 million (2002: €55.5 million).

    The Group raised €68.4 million net of expenses in a one for five Rights Issue completed in March 2003 to part fund the acquisition of Jacksons and to enable the Group to continue to finance its acquisition and development programme.

    EBITA interest cover was 6.3 times (2002: 6.8 times). Earlier this year, the Group took advantage of historically low long term Sterling interest rates to increase its fixed interest rate debt to half of total debt.

    Shareholders' funds were €410.8 million (30 June 2002: €288.5 million) and net debt amounted to €307.3 million (30 June 2002: €212 million) giving a debt to equity ratio of 75 per cent (30 June 2002: 73 per cent).

    The Rights Issue and strong operating cash flow has enabled Grafton to fund a major capital programme in the half year and leaves the Group with the balance sheet strength and high levels of interest cover to pursue a healthy pipeline of attractive acquisition and development opportunities going forward.

    Outlook

    The Board expects that the Group's strategy of diversifying its earnings base across the UK and Ireland by building strong brands and market positions through organic development and acquisitions will continue to provide a sound basis for profitable growth.

    In the UK, the Group anticipates benefits from the integration of prior year acquisitions, further bolt-on acquisitions in a consolidating market and like for like sales growth.

    Although in Ireland current trading continues to show like for like sales growth, the Group expects the weakening macro economic background to be reflected in an eventual slowdown in the level of new house building. The effects of this slow down should be offset to some extent by stronger performance from the more resilient RMI sector and the continuation of sales growth in the Woodie's DIY business.

    Overall, the Group remains optimistic about its trading prospects and expects profitability and earnings in the second half to be ahead of last year.

    Ends

    Enquiries:

    Michael Chadwick
    Executive Chairman
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Joe Murray
    Murray Consultants
    Telephone: (+353) (01) 498 0300

    Colm Ó Nualláin
    Finance Director
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Ginny Pulbrook
    Citigate
    Telephone: (+44) (0207) 282 2945

    View the full Press Release in PDF format.

    Development Update

    Released: 02/07/2003

    Grafton Group plc is pleased to announce that the Jackson Building Centres' acquisition completed by the Group on 3 March 2003 is achieving good like for like sales growth. Jackson's trading performance and profitability are ahead of initial expectations.

    In addition, the Group has completed the acquisition of three single branch merchanting businesses and opened seven greenfield merchanting branches to date this year in the U.K.

    EuroMix, the Group's silo mortar division, commenced production and sales from its sixth plant in Harlow, Essex.

    Woodies DIY is actively progressing the opening of five new stores in Ireland with two likely to open before Christmas 2003.

    Group profits in the first half of 2003 are expected to be slightly ahead of market forecasts.

    Ends

    Equiries:

    Michael Chadwick
    Executive Chairman
    Grafton Group plc
    Telephone: (++353)(01) 216 0600

    Colm Ó Nualláin
    Finance Director
    Grafton Group plc
    Telephone: (++353) (01) 216 0600

    Joe Murray
    Murray Consultants
    Telephone: (++353) (01) 498 0300

    Ginny Pulbrook
    Citigate
    Telephone:(++44)(0207) 282 2945

    AGM Statement

    Released: 09/05/2003

    Grafton's strategy is focused on building strong market positions and brands in the U.K. and Ireland to create a diversified earnings base. This strategy has led to continued success with a good start to the current year in both the U.K. and Ireland.

    The U.K. merchanting businesses have shown strong acquisition led growth together with increases in like for like sales in a favourable trading environment. Jackson Building Centres, which joined the Group in March this year, is trading ahead of expectations and acquisitions made last year are contributing to increased profitability. The Group now trades from 247 merchanting locations in the U.K. EuroMix, the Group's silo mortar division, continues to grow sales and profitability. Its sixth plant, in Harlow, Essex, is due to open later this month.

    The Group's Irish businesses have also shown good growth in the period. Chadwicks, the Irish merchanting business, has improved sales and profitability helped by an increased level of new housebuilding. Woodie's DIY continues to show like for like sales growth and has announced a further 5 new stores as part of its expansion program which will bring to 19 the number of Woodie's DIY stores in Ireland.

    Overall the Group remains confident of further growth in profits and earnings per share in 2003.

    The Group also announced that Mr. Norman Kilroy, Managing Director, will be retiring in April 2004 at age 65. Mr. Kilroy has already delayed his retirement at the company's request and will progressively relinquish his responsibilities during the coming year. The Chairman paid tribute to his outstanding contribution as Managing Director to the success of the Group over the last 13 years.

    Ends

    Enquiries:

    Michael Chadwick
    Executive Chairman
    Grafton Group plc
    Telephone: (+353)(01)216 0600

    Joe Murray / Grainne O'Brien
    Murray Consultants
    Telephone: (+353) (01)498 0300

    Ginny Pulbrook
    Citigate
    Telephone:(+44)(0207)282 2945

    Preliminary Announcement of Results for the Year ended 31 December 2002

    Released: 10/03/2003

    Highlights

    • Pre-tax profits up 19 per cent to €80 million
    • Earnings per share before goodwill and property profit up 15 per cent to 39.3c
    • UK the key contributor to increased profitability
    • UK operating profits up 34 per cent to €54 million
    • Woodie's DIY grows strongly in Ireland
    • Strong recovery in second half for Irish merchanting and manufacturing
    • Share redemption / dividend per share increased by 13 per cent to 9c
    • Acquisition programme to continue
    • Critical mass achieved to bring significant benefits

    Commenting on the results today, Michael Chadwick, Chairman said:

    "Our UK operations were the key contributors to increased profitability in 2002. Grafton now holds an 8 per cent share of the UK market and is the fastest growing merchant in that market. UK operating profits grew by 34 per cent in 2002. In Ireland, merchanting strengthened in the second half and Woodie's DIY continued its strong growth. For the current year, global economic uncertainties remain, but the underlying growth potential for the Group across its diversified earnings base is positive and Group results to date this year have been good".

    GRAFTON GROUP plc Preliminary Announcement of Results For Year Ended 31 December 2002

    Following the announcement of estimated results on 4 February 2003, the Group is pleased to confirm that 2002 has been yet again another year of strong operational performance and record financial results for the Group. Pre-tax profits increased by 19 per cent to €80.2 million (2001: €67.2 million). Earnings per share, before goodwill and property profit grew by 15 per cent to 39.26 cent (2001: 34.09 cent).

    The Group has already announced the Board's decision to redeem one redeemable share per Grafton Unit on 14 February 2003 for a cash consideration of 5.25 cent per share. Accordingly, no final dividend will be declared. Total redemption proceeds amount to nine cent per Grafton Unit, which is equivalent to an increase of 12.5 per cent on the total dividend of eight cent paid for the previous year.

    The Group's consistent focus has created a balanced diversified earnings base, and strong brands and market positions in the UK and Ireland. This is reflected in substantial growth in profit before tax and earnings per share, and an increase in Group turnover of 16.5 per cent to €1,152.4 million, the first time the Group's annual turnover has exceeded one billion euro (2001: €988.8 million). Group operating profit grew by 16.6 per cent to €92.3 million (2001: €79.1 million).

    In the UK market, accounting for 70 per cent of the Group's operations, strong profitable growth continued. UK turnover increased by 23 per cent to €808.5 million (2001: €657.2 million), while operating profit before goodwill amortisation and property profit increased by 34.4 per cent to €53.7 million (2001: €40.0 million). Operating margins improved for the fourth consecutive year to 6.6 per cent (2001: 6.1 per cent). The Group's UK merchanting business performed well in a consolidating market, accelerating its expansion programme in the second half. Fifteen acquisitions in 2002, together with greenfield start-ups added 50 trading locations, and increased the Group's UK merchanting network at the end of 2002 to 227. EuroMix, the Group's dry mortar business, continued to penetrate the UK market with strong growth in turnover and profits.

    In Ireland, against the background of a slowdown in the economy and the construction sector, turnover in the Group's merchanting and manufacturing businesses improved in the second half, enabling the Group's Irish turnover to exceed 2001 levels for the full year. Woodie's DIY turnover grew as a result of the opening of two new stores, and strong like-for-like growth from existing stores. All the Irish divisions generated strong cash flows, high margins, and good returns on capital employed. Irish turnover increased by 3.7 per cent to €343.8 million (2001: €331.6 million). Operating profit declined by 1.5 per cent to €38.6 million (2001: €39.2 million) at an operating margin of 11.2 per cent (2001: 11.8 per cent).

    The Group's strong balance sheet and cash flows from its operations funded expenditure of €88.8 million on acquisitions, and a further €68.0 million on capital projects.

    Year end shareholders' funds were €322.0 million (2001: €264.5 million) and net debt amounted to €240.6 million (2001: €194.9 million), giving a debt to equity ratio of 75 per cent (2001: 74 per cent).

    EBITDA for 2002 amounted to €120.1 million (2001: €101.5 million), an increase of 18.3 per cent.

    Operations Review - United Kingdom

    This is now the Group's most important market. During 2002 the Group strengthened its UK position and market presence with 15 acquisitions, making 37 acquisitions in all over the last three years. These, together with strong like-for-like sales growth resulted in UK turnover growing by 23.0 per cent to €808.5 million. Scale benefits and strong management resulted in operating margins improving to 6.6 per cent from 6.1 per cent in 2001 for the fourth consecutive year. Strong turnover and margin management resulted in UK operating profit growing significantly by 34.4 per cent to €53.7 million.

    All UK divisions reported a strong improvement in sales and operating profit. The Group's strategic diversification has created a UK business platform accounting for 70 per cent of Group sales (2001: 66 per cent) and 58 per cent of Group operating profit (2001: 50 per cent). These strong results confirm UK managements' ability to successfully complete and integrate acquisitions in a consolidating market and to generate synergies from its expanding business base.

    UK Builders Merchanting

    The UK Builders merchanting division, which trades mainly under the Buildbase brand, continued its rapid growth in 2002 with record results and significant development activity. The division had an excellent year increasing sales and operating profit due to like-for-like growth, integration benefits from prior year acquisitions, the incremental effect of acquisitions made during 2001 and acquisitions completed during 2002. Integration benefits were reflected principally in improved buying terms, and operational efficiencies.

    The UK builders merchanting division increased its branch network by 31 during 2002 and traded from 114 locations at the year end. The division completed 13 acquisitions during 2002. These deals underpinned the divisions development strategy and demonstrate the Group's success in securing bolt-on acquisitions which complement the existing network through wider market coverage. The businesses acquired were long established builders merchants, trading from well located branches with strong positions in their local market place. Four builders merchanting chains acquired were BMB, a Barnsley based merchant trading from four builders merchanting branches principally in Yorkshire; Lakes, which trades from seven branches mainly in Derbyshire; PDM, a Scottish heavyside merchant trading from seven branches and Aizlewoods which is based in Rotherham and trades from three builders merchanting branches. Nine mainly infill single branch acquisitions strengthened the divisions' regional coverage.

    Buildbase, now firmly established as a key player in the UK merchanting industry, extended its regional market presence beyond the South and Midlands during 2002 with acquisitions in the North of England which provide scope for adding value through cost benefits and offers the potential for future bolt-on development activity. Integration of prior year acquisitions into the Buildbase network continued during 2002 yielding significant purchasing and cost saving benefits.

    In Northern Ireland, Macnaughton Blair increased sales and operating profit in a competitive market. The acquisition in October 2002 of Peter Woods, a single branch builders merchant, strengthens the Group's presence in the Belfast area and takes the number of branches in the province to ten. The branches at Antrim and Duncrue, Belfast, were redeveloped during 2002.

    Plumbers Merchanting

    Plumbase, one of the UK's largest Plumbers Merchanting chains, increased its branch network by 20 during 2002 and traded from 113 branches at the year-end. The business consolidated its strong market positions in the South East, Midlands, East Anglia and West Country with the opening of nine new branches and the acquisition of B J White, which trades from branches in Yeovil and Bridport. Plumbase gained an initial but significant presence in the North West as a result of the acquisition in late November 2002 of JKS, a seven branch plumbers merchant trading in the Greater Manchester area. Plumbase is now well placed to take advantage of other acquisition opportunities which may arise in this region. Plumbase also gained a further two branches as a result of the BMB and Aizlewoods acquisitions.

    This was another year of strong growth in sales and operating profit due primarily to like for like sales growth, margin improvement and the profitable development of prior year branch openings.

    UK Mortar

    EuroMix, a range of mortars produced using the latest factory and onsite technology trades from five plants in the London, Birmingham, Manchester and Glasgow areas. EuroMix, the market leader in the supply of silo based mortars, had an outstanding year growing sales and operating profit strongly. The five mortar plants increased volumes and traded ahead of expectations. EuroMix has been strongly endorsed in its marketplace as a value-added product and is now used by UK national and regional contractors on a broad range of construction projects.

    Operations Review – Republic of Ireland

    In Ireland, the construction sector, which had seen eight years of continuous growth from 1994 to 2001, showed an overall decline of 2 per cent in 2002. The housing sector continued to grow following the restoration of mortgage interest deductibility for rental purposes and changes to stamp duty in Budget 2002. Growth in the DIY and RMI market (Repair Maintenance and Improvements) was positive. A strong second half performance by the Group's Irish operations resulted in turnover growth of 8.8 per cent and operating profit increasing by 7.7 per cent in the final six months of the year. Turnover for the full year was €343.8 million, an increase of 3.7 per cent and operating profit for the year was €38.6 million, down just 1.5 per cent on 2001.

    Irish Merchanting

    Led by Chadwicks, Irish merchanting operations traded very successfully in the second half, growing turnover by 4.4 per cent following a first half decline of 5.6 per cent. Margins also improved considerably on the first half, as management focused on cost control and profitable trading. Turnover for the year was €215.0 million, down just 0.7 per cent on 2001. Chadwicks' Clonmel and Kilkenny branches were relocated to custom built high profile premises during the year and are trading successfully. The sale of Chadwicks Wexford, prior to its planned relocation in 2004, together with the disposal of an unused property in Clonmel, has resulted in property profits of €3.7 million.

    Irish Retailing

    Woodie's market leadership was strengthened with the opening of two new stores in Tralee and Newbridge during the year. Both are trading successfully. Turnover grew by 15.2 per cent to €98.1 million, compared to €85.2 million in 2001, with strong like-for-like growth of 6.0 per cent. Woodie's has also acquired a high profile prime location on the Naas Road, Dublin, as part of its expansion plans, and continued its programme of store development.

    Irish Manufacturing

    Manufacturing turnover, which had declined by 1.8 per cent in the first half, recovered strongly in the second half with growth of 7.3 per cent. Turnover for the year was €30.7 million, 2.7 per cent ahead of 2001. CPI's EuroMix business strengthened its position in the dry mortar market.

    Strategy

    The Group's consistent strategy of broadening its earnings base and creating strong market positions and brands, while growing its earnings per share, has continued in 2002. In the five year period from 1997, the Group made 52 acquisitions, increasing its UK merchanting network from 38 outlets to 227, increasing its UK turnover six-fold and its UK profits ten-fold. UK margins have also increased over that period from 4.2 per cent to 6.6 per cent.

    Finance

    The Group reported its eleventh year of uninterrupted profit growth in 2002 and a doubling of profit before tax in the last three years. The established businesses in the UK were the key contributor to increased profitability in 2002. The Irish business experienced a resumption of profitable growth in the second half and almost reversed the operating profit decline reported in the first half to end the year marginally down on 2001.

    The Group's interest charge of €13.2 million (2001: €12.4) benefited from lower interest rates on borrowings and interest cover increased to 7.4 from 6.7 in 2001.

    Shareholders' funds increased by €57.5 million (22%) to €322.0 million (2001: €264.5 million). Net debt at 31 December 2002 was €240.6 million (2001: €194.9 million), giving a debt to equity ratio of 75 per cent (2001: 74 per cent). The redemption of redeemable shares on 14 February 2003 reduced shareholders' funds by €9.3 million.

    The Group produced very strong cash flows in 2002 generating €109.3 million from operating activities (2001: €82.4 million).

    The Group's active acquisition programme continued in 2002 with the completion of 15 small and medium sized transactions at an overall cost of €88.8 million (2001: €47.2 million).

    Capital expenditure increased to €68.0 million in 2002 (2001: €42.0 million). Development initiatives in Ireland included the purchase of freehold property on the Naas Road, Dublin for Woodie's, the opening of two new Woodie's stores and the relocation of two Chadwicks branches. In the UK, the Group expanded its merchanting network with the opening of ten branches and also redeveloped a number of branches. Capital expenditure was also incurred to support the rapid expansion of the UK mortar business.

    The Group's acquisition spend over the five years to 31 December 2002 of almost €300 million and capital expenditure of just over €200 million over the same period was funded from internal cash flow and utilisation of the Group's debt capacity, other than a 5 per cent placing in 1999 which raised €15.5 million. The rights issue announced on 4 February 2003, to supplement the Group's strong cash flow in funding the Jacksons acquisition, will leave the Group well placed to finance attractive acquisition opportunities which will arise, while maintaining acceptable levels of gearing and interest cover.

    Group Outlook

    Global economic uncertainties remain, but the underlying growth potential for the Group across its diversified earnings base is positive. In Ireland the construction sector is unlikely to return to growth overall, but the Group will benefit from its exposure to the RMI and DIY markets, and the full year turnover from its two new Woodie's DIY stores opened in mid 2002. Further Woodie's store openings are planned. Strong trading in Ireland in January and February has resulted in increased operating profit in all divisions.

    The Group's UK merchanting operations in a large and consolidating market should experience further acquisition opportunities and growth in 2003. Buildbase and Plumbase merchanting operations will benefit from the 50 new trading locations acquired or opened in 2002, which will contribute to profitability. EuroMix dry mortar is expected to continue to penetrate the market and experience growth and will shortly open its sixth manufacturing plant. UK operating profits have continued to grow in the first two months of this year.

    Since year end, Grafton has acquired Jackson Building Centres Limited, the largest regional builders merchant in the UK, adding a further 18 branches and increasing its overall merchanting network to 245 trading locations. The acquisition of Jacksons increases the Group's market share of the UK merchanting market to 8 per cent. This profitable and well managed business in the East Midlands, with a turnover of circa €207 million and profits of circa €10 million in 2002, is an excellent strategic and geographic fit for Grafton's UK operations.

    The recent Rights Issue provides Grafton with the balance sheet strength to continue to make bolt-on acquisitions in a consolidating UK merchanting market.

    Group results to date this year have been good and the Board looks forward to a year of further development and growth in earnings per share for the enlarged Group.

    Ends

    Enquiries:

    Michael Chadwick
    Executive Chairman
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Colm Ó Nualláin
    Finance Director
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Murray / Grainne O'Brien
    Murray Consultants
    Telephone: (+353) (01) 498 0300

    Ginny Pulbrook
    Citigate
    Telephone: (+44) (0207) 282 2945

    View the full Press Release in PDF format.

    Grafton Group Announces Completion of Jackson Acquisition

    Released: 03/03/2003

    Grafton Group plc is pleased to announce that the acquisition of Jackson Building Centres Ltd was completed this afternoon.

    Ends

    Enquiries:

    Michael Chadwick
    Executive Chairman
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Joe Murray
    Murray Consultants
    Telephone: (+353) (01) 498 0300

    Ginny Pulbrook
    Citigate Dewe Rogerson
    Telephone: (+44) (0207) 282 2945

    Grafton Group plc Result Of Extraordinary General Meeting

    Released: 28/02/2003

    Grafton Group plc announces that, at the Extraordinary General Meeting held today, all the proposed Resolutions, in particular resolutions to, inter alia, approve the acquisition of Jackson Building Centres Limited and facilitate the Rights Issue, were passed.

    Speaking at the meeting, Michael Chadwick Chairman said:

    "The acquisition of Jacksons will considerably strengthen Grafton's market position in the UK. Jacksons has a quality branch network with regional strength, and offers clear and deliverable future growth opportunities. The synergies to be derived from the purchase are considerable and will contribute significantly to future profits growth," he said.

    "The acquisition increases our UK turnover to more than €1 billion and means that over 75% of our Group sales will be generated in that market in 2003. With Jacksons we will have 245 branches covering key areas of the UK market and will have re-enforced our position as the fourth largest builders merchant in the UK. The growth potential in that market remains strong and we continue to evaluate further acquisition opportunities. We are confident that we can continue to generate superior returns on the capital that shareholders are investing in Grafton," he added.

    Following the passing of the Resolutions at today's Extraordinary General Meeting, Provisional Allotment Letters in respect of entitlements to New Grafton Units pursuant to the Rights Issue will be posted to Qualifying non-CREST Shareholders (other than certain Overseas Shareholders) today. It is expected that Nil Paid Rights credited to the stock accounts of Qualifying CREST Shareholders (other than certain Overseas Shareholders) will be enabled with effect from 8.00 am on 3 March 2003.

    It is expected that dealings in the New Grafton Units, nil paid, will commence at 8.00 am on 3 March 2003.

    The latest time and date for acceptance and payment in full in respect of New Grafton Units pursuant to the Rights Issue is 9.30 am on 21 March 2003.

    Ends

    Enquiries:

    Michael Chadwick
    Executive Chairman
    Tel. +353 (0)1 216 0600

    Colm Ó Nualláin
    Finance Director
    Tel. +353 (0)1 216 0600

    Additional information:

    This announcement should be read in conjunction with the full text of the Listing Particulars dated 5 February 2003. Words and expressions defined in the Listing Particulars shall bear the same meanings in this announcement.

    Not for release, publication or distribution in or into the United States, Canada, Australia, South Africa or Japan.

    Estimated Trading Results for 2002 Proposed Acquisition of Jackson Building Centres Limited and Rights Issue

    Released: 04/02/2003
    • Trading update estimates 2002 Pretax Profits to be no less than €80 million
    • EPS estimated at no less than 39.1 cent, an increase of 14.7 per cent
    • Principle driver of growth is the UK. 50 new locations in 2002
    • Healthy pipeline of potential UK acquisitions
    • Further profitable growth expected in current year
    • Acquisition of Jackson Building Centres Ltd, UK's 7th largest builders merchant
    • Consideration €135.4 million (Stg£88.75 million)
    • Deep Discount Rights Issue to raise €70.55 million. 1 for 5 at €2.00 per share

    Michael Chadwick, Chairman, Grafton Group plc:

    "The Jacksons acquisition strengthens Grafton's position as the 4th largest UK builders merchant with circa 8 per cent of the market. It provides a strong platform for further acquisitions. We are seeking new funds from shareholders to supplement our strong cash flow in funding the Jacksons acquisition, to ensure we have resources for further acquisitions and to maintain acceptable levels of gearing and interest cover. Our UK business is now the principle driver of growth in the Group. UK turnover and profits grew strongly in 2002. In Ireland our builders merchanting and manufacturing operations have performed well and Woodie's profitable growth and expansion continues. We look forward to another year of development and profitable growth in 2003."

    Ends

    Enquiries:

    Michael Chadwick
    Executive Chairman
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Colm O'Nuallain
    Finance Director
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Joe Murray
    Murray Consultants
    Telephone: (+353) (01) 632 6400

    View the full Press Release in PDF format.

    2002
    Date Title
    11 December 2002 Acquisition Update
    28 August 2002 Grafton Group plc Interim Results for the Six Months

    Acquisition Update

    Released: 11/12/2002

    Grafton Group plc has continued to acquire businesses since its interim announcement on 28 August as part of its ongoing expansion programme. To date Grafton has made a further five acquisitions, adding 15 branches to its UK merchanting network, comprising nine plumbers merchanting and six builders merchanting branches.

    Since the beginning of the year, the Group's 14 acquisitions costing over €90 million, together with new greenfield locations, have added 50 locations to its UK merchanting network, bringing its total trading locations to 280, with 237 in the UK and 43 in Ireland.

    New acquisitions and greenfield additions are expected to be earnings neutral in 2002 and to contribute to Group profitability in 2003.

    The Group's consistent strategic focus on creating a strong merchanting network in the UK with emphasis on the RMI market provides continuing organic and acquisition growth opportunities going forward.

    We are pleased that Group profits for 2002 remain in line with expectations.

    Ends

    Enquiries:

    Michael Chadwick
    Executive Chairman
    Grafton Group plc
    Telephone: (+353) (01) 216 0600

    Joe Murray
    Murray Consultants
    Telephone: (+353) (01) 632 6400

    Ginny Pulbrook
    Citigate Dewe Rogerson
    Telephone: (+44) (0207) 282 2945

    Grafton Group plc Interim Results for the Six Months

    Released: 28/08/2002

    Highlights:

    • Pre-tax profits increased by 16 per cent to €31.6 million
    • Adjusted EPS up 17 per cent to 16.6 cent
    • Group turnover grows by 14 per cent to €534.8 million
    • UK operating profit increased by 40 per cent to €23.2 million – now 61 per cent of Group operating profit
    • Recent acquisitions bring UK trading outlets to over 200
    • Irish DIY retailing turnover up 10 per cent

    Commenting on the results, Michael Chadwick, Executive Chairman said:

    "Our successful development strategy in the UK continues to deliver, with the UK market now accounting for 69 per cent of Group turnover and 61 per cent of Group operating profit. In a less favourable economic climate the Group's Irish operations traded well. The Group remains positive about its future prospects. "

    Grafton Group plc Interim Results Six months ended 30 June 2002

    Grafton Group plc reports an increase in pre-tax profits of 16 per cent to €31.6 million for the half year ended 30th June 2002 compared with €27.1 million in the first half of 2001. Adjusted EPS was up 17 per cent to 16.6 cent, before goodwill amortisation, against 14.3 cent previously. The comparative figures exclude a profit from the sale of surplus property of €2.3 million in first half 2001.

    The Board has decided to redeem one redeemable share, per Grafton Unit for a cash consideration of 3.75 cent per share. Accordingly, no interim dividend has been declared. This is equivalent to an increase of 15 per cent on last year's interim dividend of 3.25 cent per share.

    The Group's strategy of creating a balanced and diversified earnings base across the UK and Ireland has enabled Group turnover in the half year to grow by 14 per cent to €534.8 million (2001: €470 million). Group operating profit before goodwill amortisation and property profit grew by 13 per cent to €38.2 million at a maintained margin of 7.1 per cent. The Group's strong cash flow has supported its ongoing acquisition and investment programme, providing the impetus for continuing growth.

    In the UK, the Group's most important market, the strong development momentum continued with turnover up 22 per cent to €370.6 million. This now represents 69 per cent of total Group turnover. UK operating profit before goodwill amortisation increased by 40 per cent to €23.2 million, contributing 61 per cent of the Group's operating profit. Six businesses were acquired in the first half, adding ten merchanting branches to the network. Five greenfield branches were also opened.

    Since June, the Group has made a further three acquisitions: Lakes, a seven branch builders merchant based in Derbyshire, PDM, a seven branch heavyside merchant based in Scotland and Noel Clay which trades from a single branch in Nottinghamshire. The Group now trades from more than 200 merchanting locations in the U.K.

    Against the background of a slowdown in the Republic of Ireland's economy, a decline in the construction sector and increases in costs, the Group's Irish turnover fell by 1 per cent to €164.2 million and operating profit before goodwill amortisation declined by 13 per cent to €15.0 million. Woodie's, the Group's DIY chain, maintained its strong growth record with turnover up 10 per cent. Woodie's opened two further DIY stores in Tralee and Newbridge in May and June respectively, and Chadwicks relocated its Clonmel branch to a larger purpose built property in a more favourable location. Turnover in builders merchanting declined in a weaker market.

    Geographic Breakdown of Financial Results

    Six months to
    30 June 2002
    unaudited)
    Six months to
    30 June 2001
    (unaudited)
    Increase
    €'000 €'000
    Turnover
    Great Britain and Northern Ireland 164.2 166.5 (1%)
    Republic of Ireland 370.6 303.5 22%
    Total 534.8 470.0 14%
    Operating Profit
    Great Britain and Northern Ireland 15.0 17.3 (13%)
    Republic of Ireland 23.2 16.5 40%
    Total 38.2 33.8 13%

    REVIEW OF OPERATIONS

    United Kingdom

    The Group's UK businesses produced 69 per cent (2001: 65 per cent) of Group turnover and 61 per cent (2001: 49 per cent) of Group operating profit. UK sales increased by 22 per cent to €370.6 million and UK operating profit increased by 40 per cent to €23.2 million. Operating profit margins increased to 6.3 per cent from 5.5 per cent. Like for like sales grew in all divisions, with overall like for like sales increasing by 5 per cent.

    UK market conditions were generally favourable during the period and the strong results achieved reflect good like for like sales growth, the continued improvement in performance from the integration of acquisitions made in prior years and scale benefits flowing from the Group's increased market presence.

    Grafton's strategy of diversifying its earnings base geographically involved laying the foundation for the development of the Group's UK builders merchanting, plumbers merchanting and mortar businesses. The builders and plumbers merchanting divisions, trading principally under the Buildbase and Plumbase brands, have leading regional market positions and, trading from over 200 locations, place the Group in 4th place nationally in the UK merchanting market. The Group's EuroMix mortar business has achieved market leadership in its sector.

    Development initiatives during the period involved six bolt-on acquisitions trading from 10 locations and the greenfield development of a further five branches. Since the period end the Group acquired a further three merchanting businesses trading from fifteen branches. The total consideration payable for all nine acquisitions, including net debt acquired, was €53 million. The acquired businesses are expected to be marginally earnings enhancing this year with further improvement in the first full year of trading in 2003.

    These acquisitions are in line with the Group's strategy of actively participating in the sector's consolidation through infill geographic coverage in regions where the Group already has strong market positions and developing a strong and profitable presence in other regions which complement the existing branch network.

    These developments further demonstrate Grafton's track record in successfully completing acquisition transactions and broadening the Group's regional spread in the UK merchanting market. The integration of these businesses into the Group will enhance profitability in future years.

    Builders Merchanting

    The Group's UK builders merchanting division, trading mainly under the Buildbase brand, had a good half year increasing sales and operating profit with contributions from the integration of prior year acquisitions and synergies across the branch network including buying benefits. The division improved its geographic reach with the acquisition during the half year of six businesses trading from nine branches including BMB, a Barnsley based merchant trading from four builders merchanting branches, principally in Yorkshire. In July 2002, the division acquired Lakes which trades from seven branches mainly in Derbyshire, and Noel Clay, a single branch merchant based in Nottinghamshire. Earlier this month, PDM a Scottish based heavyside merchant trading from seven locations was acquired. In Northern Ireland, the Group's nine branch builders merchanting business increased sales and operating profit.

    The Group's UK builders merchanting division currently trades from over 100 branches.

    Plumbers Merchanting

    The Group's UK plumbers merchanting division, trading under the Plumbase brand, had a strong half year increasing operating profit due to like for like sales growth, purchasing benefits and cost control. Plumbase added five branches during the half year including four greenfield branches and one branch through the BMB acquisition, taking the current divisional total to 100, including two greenfield branches opened since the half year.

    Mortar Manufacturing

    EuroMix, producing a range of mortars and other products trading from five plants, grew its volumes and consolidated its leadership position in the silo based mortar market. The division, which supplies UK leading building and construction companies, had a strong half year, increasing sales and operating profit.

    Republic of Ireland

    Trading conditions have been less favourable in the Irish construction sector as it adjusts to the slow down in the Irish economy. In a competitive market, turnover declined by 1 per cent to €164.2 million. Lower turnover and increasing costs led to a fall in operating profit of 13 per cent to €15.0 million, resulting in a drop in Irish margins from 10.4 per cent to 9.1 per cent.

    Merchanting

    The Group's Irish merchanting turnover declined by 5.6 per cent to €103.5 million, in a weaker market. Chadwicks continues to focus on the RMI market and gross margin management. During the period Chadwicks successfully relocated its Clonmel branch to a higher profile location on the ring road. Plans are well advanced for the relocation of the Kilkenny branch to a more favourable location in the second half of the year.

    Retailing

    Woodie's market leadership continued with strong turnover growth of 10 per cent to €45.8 million. Like for like sales growth was 7 per cent. Two new stores were opened in Tralee and Newbridge. Both are trading well. Woodie's development programme included the refurbishment of its Sandyford and Coolock stores with significant extensions to their garden centres. During the period Woodie's also acquired a prime property on the Naas Road, Dublin for future development as part of its expansion plans.

    Manufacturing

    While turnover in the manufacturing division showed a decline of 2 per cent to €15.0 million, EuroMix mortar enjoyed modest growth.

    Finance

    The Group continued to generate strong cashflows in the half year to support its active development programme. Consideration payable for acquisitions, including acquired debt, was €19.9 million (2001: €35 million). Expenditure on capital projects was €35.6 million (2001: €22 million) including a capital spend of €22.2 million (2001: €12 million) on development initiatives, the most significant of which was the purchase of freehold property on the Naas Road, Dublin for Woodie's. Development capex in Ireland also included expenditure on the relocation of two Chadwicks branches, and the opening of two new Woodie's stores. In the UK, the Group continued its capital programme with the opening of five greenfield branches, and the re-development of a number of branches. All pre-opening costs of new branches are charged in arriving at operating profit in keeping with the Group's conservative accounting policies.

    The Group's depreciation charge increased to €10.4 million from €8.9 million in 2001. EBITDA interest cover of 8.6 times (2001: 7.7 times) reflects the Group's strong cashflows which are capable of internally funding ongoing acquisition and capital expenditure initiatives. Shareholders' funds were up 21 per cent to €288.5 million at 30 June 2002, and net debt amounted to €212 million, giving a debt to equity ratio of 73 per cent (30 June 2001: 87 per cent). The redemption of redeemable shares on 20 September 2002 will reduce shareholders' funds by €6.6 million. The results and cashflows of the Group's UK subsidiaries have been translated at the average rate of exchange for the period of Stg62.17p (six months to 30 June 2001: Stg62.37p).

    Outlook

    The UK will be the principal driver of the Group's growth. The Group's UK merchanting businesses will benefit from opportunities in the RMI market for continuing organic growth and acquisition activity. The 32 branches added to the network so far this year will provide opportunities for increasing future profitability and confirms Grafton's ability to continue to grow in the UK.

    The outlook to the year end for the Irish market is similar to the first half. The construction sector is unlikely to return to growth this year, while Woodie's turnover will benefit from two new stores opened in May and June.

    Overall the Group remains positive about its future prospects, and in the absence of unforeseen events, expects profitability in the second half to be ahead of last year.

    Ends

    Enquiries:

    Michael Chadwick
    Executive Chairman
    Grafton Group plc
    Telephone: (++353) (01) 2160600

    Joe Murray / Grainne O'Brien
    Murray Consultants
    Telephone: (++353) (01) 6326400

    Ginny Pulbrook
    Citigate Dewe Rogerson
    Telephone: (++44) (0207) 282 2945


    View the full Press Release in PDF format.






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THE MATERIALS CONTAINED HEREIN ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, INTO OR WITHIN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA, OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THE MATERIALS CONTAINED HEREIN.


The information to which this gatepost gives access (the “Materials”) is intended exclusively for persons who are residents of the United Kingdom, Ireland, Jersey, Guernsey or the Isle of Man, are not residents of the United States and who are not physically located in the United States. Materials do not constitute an offer of securities for sale or a solicitation of an offer to purchase securities in the United States or in any jurisdiction in which such an offer or solicitation would be unlawful and nothing contained herein shall form the basis of any contract or commitment whatsoever. The Materials (other than the Prospectus dated 24 June 2013 (the “Prospectus”)), have not been approved by the UK Financial Conduct Authority and neither the Materials nor the Prospectus have been approved by the regulatory authorities in Ireland, Guernsey, Jersey or the Isle of Man.


The securities referred to herein and on the pages that follow have not been and will not be registered under the US Securities Act of 1933, as amended, (the “Securities Act”), or with any securities regulatory authority of any State or other jurisdiction of the United States, and may not be offered, sold, resold, pledged, delivered, distributed or transferred, directly or indirectly, into or within the United States or to or for the account or benefit of U.S. Persons (as defined in Regulation S of the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any State or other jurisdiction of the United States. The securities referred to herein are being offered and sold outside the United States in offshore transactions, as defined in, and in reliance on, Regulation S under the Securities Act.


There will be no public offer of the securities referred to herein and on the pages that follow in the United States, Australia, Canada, Japan, South Africa or any other jurisdiction where it is unlawful to offer the securities. The securities referred to herein and on the pages that follow may not be offered, sold, resold, pledged, delivered, distributed or transferred, directly or indirectly, in Australia, Canada, Japan, South Africa or any other jurisdiction where it is unlawful to do so or to any resident or citizen of Australia, Canada, Japan, South Africa or any other jurisdiction where it is unlawful to do so.


The offer and sale of the securities referred to herein and on the pages that follow have not been and will not be registered under the applicable securities laws of Australia, Canada, Japan or South Africa. Potential users of this information are requested to inform themselves about and to observe any such restrictions. The securities may only be offered in Jersey in compliance with the provisions of the Control of Borrowing (Jersey) Order 1958 and in accordance with all other applicable regulatory requirements. The securities may only be promoted in or from within Guernsey in compliance with the provisions of the Protection of Investors (Bailiwick of Guernsey) Law, 1987 and in accordance with all other applicable regulatory requirements.


No reliance may be placed for any purposes whatsoever on the information contained in the Materials, other than in respect of the Prospectus, or on their accuracy or completeness. The contents of the Materials, other than the Prospectus, have not been verified by Grafton Group plc or its affiliates, and none of the Materials have been verified by any other person. The information in the Materials is subject to completion and change. Any potential investor should determine for itself the relevance of the information contained in the Materials and any investment in the securities should be based upon such investigation as it deems necessary. None of Grafton Group plc, its affiliates or of any of their advisers and/or agents provide legal, tax, accounting or investment advice in relation to the securities and they are not responsible for any advice you may receive from any third party. You should seek independent advice if you are in any doubt as to the suitability of an investment in the securities for your circumstances.


By clicking “I understand and agree” below, you represent, warrant, and agree that you (1) have read and understood the information set out above; (2) agree to be bound by its terms; (3) are resident in the United Kingdom, Ireland, Jersey, Guernsey or the Isle of Man and DO NOT have a registered address in, and are NOT resident or physically located in, the United States, Australia, Canada, Japan, South Africa or any other jurisdiction where it is unlawful to distribute the Materials and are not a U.S. Person (as defined in Regulation S of the Securities Act); (4) are permitted under applicable laws and regulations to receive the information contained in the pages that follow; and (5) agree that you will not transmit or otherwise send any information contained in this website, in any way, to any person in the United States or to publications with a general circulation in the United States nor participate in the offer, in any way, if you are physically located in the United States.