Covering the period from 1 January to 21 April 2024, Grafton Group plc’s latest Trading Update reveals that Group revenue in the period was £669.2 million, down 5.0% from £704.3 million in the prior year and by 3.3% in constant currency.
A statement from the company noted that “Softer trading in the seasonally less important early months of the year was influenced by prevailing macroeconomic conditions in the Group’s individual markets and exceptionally wet weather in Ireland and the UK which impacted demand. Overall activity in the Group’s businesses remained subdued in the period with average daily like-for-like revenue down by 4.5% on the prior year.”
Looking specifically at the firm’s UK operations, the update continued: “Demand conditions in the UK RMI market remained weak with materials price deflation of circa 3.5% and adverse weather conditions also contributing to the decline in revenue.
“In UK Manufacturing, as expected and previously flagged, CPI Mortars experienced a sharp decline in volumes in line with the fall in house building activity. Volumes were also lower in StairBox as demand for bespoke staircases declined in a weaker residential RMI market.”
Segmental Trading
The table below shows changes in average daily like-for-like revenue and in total revenue compared to the same period last year:
| Segment | Average Daily Like-for-Like Revenue
Change* |
Total Revenue Change | |
| Constant
Currency |
Actual
(Sterling) |
||
| 1 January
to 21 April 2024 v 2023 |
1 January
to 21 April 2024 v 2023 |
1 January
to 21 April 2024 v 2023 |
|
| Merchanting | |||
| – UK | (8.0%) | (6.2%) | (6.2%) |
| – Ireland | 0.6% | 2.5% | (0.6%) |
| – Netherlands | (2.8%) | (4.0%) | (6.9%) |
| – Finland | (8.2%) | (5.7%) | (8.5%) |
| Retailing | 3.2% | 2.3% | (0.7%) |
| Manufacturing | (21.7%) | (17.0%) | (17.2%) |
| Group | (4.5%) | (3.3%) | (5.0%) |
*Constant currency
Share Buybacks
The fourth share buyback programme, launched on 31 August 2023, was extended to 31 May 2024 and the maximum aggregate consideration increased from £50 million to £100 million. This programme completed on 30 April 2024 and involved the repurchase of 11.1 million ordinary shares at an average price of £9.02 per share.
Additional cash of £343.3 million was returned to shareholders through share buybacks completed between 9 May 2022 and 30 April 2024 reflecting the repurchase of 40.27 million ordinary shares at an average price of £8.53 per share. The number of shares bought back amounted to 16.8 per cent of the shares in issue when the first buyback programme commenced on 9 May 2022.
Commenting, CEO Eric Born said: “Trading in the period continued to be challenging in most of our markets and revenue trends were also impacted by price deflation and exceptionally wet weather in Ireland and the UK. Looking ahead, whilst we are not expecting a sustained recovery in our markets in the short term, we do expect profitability to be slightly more weighted than usual to the second half.
“We remain focused on being the providers of choice for our customers, investing in our brands and maintaining tight control of costs. We are confident in the underlying demand fundamentals and the medium-term outlook for our markets and on the opportunities provided by our cash generative business and a healthy balance sheet.”
