Half Year Results for the period ended 30 June 2022
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Good Trading Performance from Diversified Earnings Base
Grafton Group plc ("Grafton"), the international building materials distributor and DIY retailer is pleased to announce its half year results for the period ended 30 June 2022.
Continuing Operations1 | H1 2022 | H1 2021 | Change |
Revenue | £1,153m | £1,028m | +12.2% |
Adjusted3 operating profit2 | £151.1m | £158.0m | (4.4%) |
Adjusted operating profit before property profit2 | £132.6m | £142.6m | (7.0%) |
Adjusted operating profit margin before property profit | 11.5% | 13.9% | (240bps) |
Adjusted profit before tax2 | £143.4m | £148.8m | (3.6%) |
Adjusted earnings per share2 | 49.5p | 50.5p | (1.9%) |
Dividend per share | 9.25p | 8.50p | +8.8% |
Adjusted return on capital employed (ROCE) 2 | 18.8% | 20.6% | (180bps) |
Net cash (before IFRS 16 leases) | £520.5m | £198.7m | £321.8m |
Net cash/(debt) – (including IFRS 16 leases) | £73.5m | (£246.6m) | £320.1m |
Statutory Results – Continuing Operations | H1 2022 | H1 2021 | Change |
Operating profit | £140.1m | £152.1m | (7.9%) |
Profit before tax | £132.4m | £142.9m | (7.3%) |
Basic earnings per share | 45.8p | 48.5p | (5.5%) |
1 Supplementary financial information in relation to Alternative Performance Measures (APMs) is set out on pages 43 to 47.
2 The adjustment of acquisition related items to the adjusted operating results was a change on previous years and thus the June 2021 comparatives have been restated to conform to current year presentation.
3 The term “Adjusted” means before exceptional items, amortisation of intangible assets arising on acquisitions and acquisition related items in both periods.
Operational Highlights
- Excellent performance in distribution businesses in Ireland and the Netherlands
- Volumes and profitability lower in Selco relative to last year’s exceptional performance
- Normalisation of revenue and profitability in Woodie’s DIY, Home and Garden retail business
- Good profit contribution from IKH in Finland at 13.2% operating margin
- Further progress made on sustainability agenda
Financial Highlights
- Full year adjusted profit expected to be in line with current consensus analysts’ forecasts
- Small decline in first half adjusted operating profit (before property profit) as expected
- Double digit operating profit margin in all segments (before property profit)
- Strong adjusted return on capital employed of 18.8%
- Cashflow of £137.9 million from operations supports strong balance sheet
- Net cash at 30 June 2022 of £520.5 million (before IFRS 16 lease liabilities) providing significant optionality
- Sustainability linked refinancing of revolving loan facilities for £334.5 million completed in August
- Dividend growth of 8.8% in line with guidance for dividend cover
Gavin Slark, Chief Executive Officer Commented:
"Our first half performance saw a significant normalisation of activity levels following exceptional pandemic related spikes in trading in the first half of 2021. While inflation remains a continuing feature in our markets, we saw improved supply chain consistency as trading patterns normalised and building materials shortages eased.
Gavin Slark Group CEO
Though potential macro-economic headwinds remain, Grafton is uniquely placed to outperform given its leading market positions, geographic diversity and the relative resilience of its core repair, maintenance and improvement market. Given the strength of our brands and their market positions together with an exceptionally strong financial position, our focus remains on delivering a strong financial outcome for the year despite the uncertainties in our markets."