Grafton Group plc has announced its final results for the year ended 31 December 2021, presenting figures for its continuing operations following the sale of its Traditional Merchanting business in Great Britain.
In a “transformational year for the business”, the “excellent results” showed a strong performance across all of its businesses, with record contributions from Woodie’s and Selco, whilst the sale of its Traditional Merchanting Business in Great Britain to Huws Gray for £520 million “provides further investment capacity for growth”. For the Group as a whole, the results showed a record adjusted operating profit of £271.2 million and a record Group adjusted operating profit margin of 12.9% (both before property profit).
Concentrating here on the firm’s continuing merchant sector operations (referenced as UK Distribution), the year-end statement noted: “Following the divestment of the Traditional Merchanting Business in Great Britain, the Group’s distribution business in the UK now comprises Selco, Leyland SDM, MacBlair and TG Lynes.
“Trading conditions in the UK residential RMI market were subdued in January and February (2021) before good growth momentum developed during March and continued through to the end of the first half. Revenue growth was sustained in the second half as demand for home improvements was significantly higher than the prior year. This resulted in a very strong operating profit performance for the year and impressive growth of 370 basis points in the operating margin before property profit to a record 12.5%.
“Selco opened three new branches during the year, increasing the estate to 72. We have identified significant opportunities to further grow the business over the coming years and our target is to increase the branch estate to 100 by 2026.”
| UK Distribution (continuing operations) | 2021 | 2020 | 2019 | |
| £’m | £’m | £’m | Change | |
| Revenue | 821.9 | 630.9 | 682.1 | 30.3% |
| Adjusted operating profit before property profit | 102.5 | 55.8 | 80.0 | 83.7% |
| Adjusted operating profit margin before property profit | 12.5% | 8.8% | 11.7% | +370bps |
| Adjusted operating profit | 113.0 | 55.9 | 80.0 | 102.2% |
| Adjusted operating profit margin | 13.7% | 8.9% | 11.7% | +480bps |
In the full report of the results, the statement from Chief Executive Officer Gavin Slark included the following comments:
“Grafton achieved record results in 2021, a year that also marked the completion of a key phase of our strategic development with the divestment of the Traditional Merchanting Business in Great Britain. This development has seen the Group transformed into a portfolio of high quality and high returning businesses with good market positions.
“We continued to progress initiatives to extend the competitive advantages that our businesses have and to grow our market positions. We invested in digital as part of our commitment to providing customers with a seamless omnichannel experience. We are blending our physical branches and stores, which remain at the heart of our business, with the digital environment and we are increasingly interacting with our customers through social media.
“Supply chain disruption resulted in shortages of core building materials, longer lead times, managed allocation for selected products and a sharp increase in product price inflation across a range of categories in the distribution businesses in the UK and Ireland.”
In the introductory statement, he added: “Trading year to date has been encouraging and the outlook for 2022 is positive, supported by strong housing and RMI markets, the inherent strength of our businesses, our strong balance sheet and future investment opportunities.”
To view the full results via the Grafton Group plc website, click the following links:
Recorded video interview with CEO and CFO
| Grafton Group plc Full Group results for Continuing Operations | 2021 | 2020 (restated) | Change |
| Revenue | £2,110m | £1,679m | +25.6% |
| Adjusted operating profit | £288.0m | £170.6m | +68.8% |
| Adjusted operating profit before property profit | £271.2m | £170.7m | +58.9% |
| Adjusted operating profit margin before property profit | 12.9% | 10.2% | +270bps |
| Adjusted profit before tax | £268.6m | £146.4m | +83.5% |
| Adjusted earnings per share | 93.0p | 50.3p | +84.9% |
| Dividend | 30.5p | 14.5p | +110.3% |
| Adjusted return on capital employed (ROCE) | 19.4% | 11.9% | +750bps |
| Net cash (before IFRS 16 leases) | £588.0m | £181.9m | +£406.1m |
| Net cash/(debt) – (including IFRS 16 leases) | £139.0m | (£355.0m) | +£494.0m |
| Statutory Results – Continuing Operations | 2021 | 2020 (restated) | Change |
| Operating profit | £269.2m | £157.8m | +70.6% |
| Profit before tax | £249.8m | £133.6m | +87.0% |
| Basic earnings per share | 86.4p | 45.9p | +88.3% |
