2020 Final Results

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Resilient performance – progressing strategic initiatives

 

Grafton Group plc ("Grafton"), the building materials distributor and DIY retailer with operations in the UK,

Ireland and the Netherlands, is pleased to announce its final results for the year ended 31 December 2020.

Continuing Operations

2020

2019

Change

Revenue

£2,509m 

£2,672m

-6.1%

Adjusted operating profit

£193.3m 

£204.8m

-5.6%

Adjusted operating profit before property profit

£190.7m 

£197.9m

-3.6%

Adjusted profit before tax

£166.4m 

£179.6m

-7.4%

Adjusted earnings per share

56.7p

62.8p

-9.8%

Dividend

14.5p

19.0p

-23.7%

Net cash (before IFRS 16 leases)

£181.9m 

£7.8m

+£174.1m

Net (debt) - reported

(£355.0m)

(£533.8m)

+£178.8m

Statutory Results – Continuing Operations

2020

2019

Change

Operating profit

£159.7m 

£197.8m

-19.3%

Profit before tax

£132.7m 

£172.6m

-23.1%

Basic earnings per share

45.1p

60.5p

-25.4%

1 Supplementary financial information in relation to Alternative Performance Measures (APMs) is set out on pages 39 to 49.

2 A bridge between the pre IFRS 16 and the related IFRS impact is set out within the APM’s.

3 The term “Adjusted” means before exceptional items and amortisation of intangible assets arising on acquisitions in both years.

Financial Highlights           

  • Revenue in continuing operations down 6% to £2.5 billion, reflecting the impact of first half branch closures in response to the pandemic
  • Operating profit in continuing operations down 6% to £193.3 million and 4% before property profit, exceeding management expectations outlined in January trading update
  • Strong recovery in profitability in second half with adjusted operating profit up 47%, reflecting robust residential repair, maintenance and improvement markets in the UK and Ireland:
    • Exceptional performance by Woodie’s DIY, Home and Garden business in Ireland
    • Particularly strong second half recovery by Chadwicks in Ireland and Selco in the UK
    • Strong second half recovery in Buildbase aided by increased margin and cost control
  • Netherlands business traded successfully through the pandemic and Polvo acquisition increased scale and profitability
  • Over 90% of Group profit derived from businesses with reported operating margin in excess of Group’s 7% target
  • Record cash generated from operations of £377.7 million included the benefit of strong day-to-day management of working capital

Operational Highlights

  • Safe trading environment maintained in branches and stores for customers and colleagues
  • Accelerated our investment into e-commerce capabilities
  • Three acquisitions completed in the second half of 2020 and another two this year, in line with our strategy of acquiring specialist high quality businesses with attractive returns
  • Good progress advancing sustainability agenda

"2019 saw growth in revenue, profitability and earnings per share alongside continuing progress in evolving and re-shaping our businesses to enhance our value proposition to our customers and drive sustainable growth for our shareholders. Strong organic growth in our Merchanting and Retailing operations in Ireland and in the profitability of our Netherlands operations helped offset a challenging year in the UK due to political and economic uncertainty. The outlook for 2020 is of continuing but moderating growth in Ireland and the Netherlands and while reduced uncertainty may lead to some uplift in the UK RMI market, we remain cautious about the speed of any recovery. Given the strength of our brands we look forward to another year of progress for Grafton and with a strong balance sheet and rigorous financial discipline we are well placed to capitalise on growth opportunities."

Gavin Slark Chief Executive Officer