Strong Performance in Challenging Markets
Grafton Group plc ("Grafton"), the international building materials distributor and DIY retailer is pleased to
announce its final results for the year ended 31 December 2023.
Financial Highlights
• Full year adjusted operating profit of £205.5 million, above
the top end of Analysts’ forecasts1
• Strong free cashflow of £205.6 million (2022: £163.3 million)
• £228.3 million (2022: £208.9 million) returned to shareholders in dividend payments and share
buybacks during the year
• Fourth share buyback programme increased from £50 million to £100 million in December 2023
• Dividend growth for the full year of 9.1% per share, benefitting from lower number of shares in issue
following buybacks
• Net cash at 31 December 2023 of £379.7 million (before IFRS 16 lease liabilities) remains very healthy
(31 December 2022: £458.2 million) after returning £228.3 million to shareholders
Operational Highlights
• Underlying demand fundamentals for the Group’s RMI and new housing markets remain strong
• Benefited from the Group’s geographic diversification and cost reduction measures
• Resilient performance despite lower volumes in challenging Distribution markets
• Woodie’s DIY, Home and Garden retail business performed well
• Strong performance by UK Manufacturing businesses despite volume declines
• Invested £49.3 million on acquisitions and development capital expenditure
• Significant progress advancing the Group’s sustainability agenda including submission of net zero
targets to SBTi and completion of Double Materiality Exercise
Total Operations 2 | 2023 | 2022 | Change |
---|---|---|---|
Revenue | £2,319m | £2,301m | +0.8% |
Adjusted 3 operating profit | £205.5m | £285.9m | (28.1%) |
Adjusted 3 operating profit before property profit | £204.2m | £260.5m | (21.6%) |
Adjusted operating profit margin before property profit | 8.8% | 11.3% | (250bps) |
Adjusted 3 profit before tax | £205.9m | £273.3m | (24.6%) |
Adjusted 3 earnings per share | 77.9p | 96.6p | (19.4%) |
Final dividend | 36.0p | 33.0p | +9.1% |
Adjusted 3 return on capital employed (ROCE) | 11.9% | 17.2% | (530bps) |
Net (debt)/cash (including IFRS 16 leases) | (£49.3m) | £8.9m | (£58.2m) |
Net cash (before IFRS 16 leases) | £379.7m | £458.2m | (£78.5m) |
Statutory Results |
2023 | 2022 | Change |
Operating profit | £183.1m | £264.3m | (30.7%) |
Profit before tax | £183.5m | £251.7m | (27.1%) |
Basic earnings per share | 69.6p | 89.3p | (22.1%) |
1 Grafton compiled consensus Analysts’ forecasts for 2023 show operating profit of circa
£200.7 million and a range of £194.0 million to £203.9 million.
2 Supplementary financial information in relation to Alternative Performance Measures (APMs) is set out
on pages 45 to 51.
3 The term “Adjusted” means before exceptional items, amortisation of intangible assets
arising on acquisitions and acquisition related items in both years.
“Despite challenging market conditions, Grafton has succeeded in delivering full year adjusted operating profit above the top end of Analysts’ forecasts. This is testament to our resilient market leading positions, responsive management teams and portfolio of high-returning businesses.
“We generated excellent free cashflow of £205.6 million from operations and returned £228.3 million to shareholders during the year in the form of share buybacks and dividends, making a total of £437.2 million which we have returned to shareholders over the past two years.
“Looking ahead, we expect to continue to benefit from the spread of the Group’s operations across four geographies and exposure to a broad range of end-markets. Our strong balance sheet and record of cash generation will stand us in good stead. We will allocate capital as required to ensure that the Group’s brands continue to support their customers and strengthen their market positions. In parallel, we will continue to evaluate opportunities in existing markets and new geographies, building on the progress we have made, with a view to progressing possible growth opportunities that can create enduring value for our shareholders.
“While trading conditions are expected to remain challenging, demand fundamentals are supported by a structural under supply of new homes and an aging housing stock that requires upgrading including energy conservation measures. With a somewhat improving economic backdrop, we are confident that Grafton is exceptionally well positioned to benefit as the cycle turns, markets normalise and consumer confidence improves.”