March 30, 2023

Selco owner Grafton announces £100m share buyback and remains bullish on outlook for the year

  • Share buy-backs of up to £100 million will end no later than 30 April 2023
  • Grafton shares rose over 11% today as the group publishes its latest update


Moving on: Eric Born will succeed Gavin Slark, pictured, as Grafton’s Chief Executive on Nov. 28

Building materials distributor and DIY retailer Grafton has announced a new share repurchase program as it maintained its full-year operating profit guidance and revenue growth.

Following the completion of the £100 million share buy-back program between 9 May and 12 September, the group now said it plans to launch a further buy-back of up to £100 million, which will end by 30 April 2023.

Grafton shares rose sharply today and rose 11.61 percent or 84.40p to 811.30p this afternoon, after falling more than 37 percent in the past year.

In an update for the period from July 1 to October 31, the owners of Woodie’s and Chadwicks said the group’s average daily comparable sales were up 1.8 percent from the same period a year earlier and by 17.3 percent over the same period. compared to the same period. back in 2019.

In the 10 months to the end of October, group sales from continuing operations rose 9.5 percent to £1.93 billion.

Grafton said it continued to benefit from the geographic diversity of its markets, with more than half of its sales coming from Ireland, the Netherlands and Finland.

It said favorable first half sales trends in the distribution business in Ireland and the Netherlands continue amid solid underlying demand and inflation in building materials prices.

But in the UK distribution business, trading conditions remained weak as households reduced discretionary spending on home improvements.

Selco Builders Warehouse’s average daily comparable store sales fell 6.1 percent over the period and building materials sales price inflation “moderated” from its high double-digit level in the first half, the company said.

It added: “Households reduced discretionary and non-essential spending on their homes in response to the sharp decline in real disposable income, interest rate hikes and a decline in consumer confidence.”

Turnover in the Finnish distribution activities was higher than last year. Grafton said that trade in the DIY, home and garden business in Ireland had normalized in line with the previous year, while the UK manufacturing business continued to perform strongly.

Grafton said it still expected to deliver full-year adjusted operating income in line with current market forecasts of around £266 million.

Boss Gavin Slark said: “Grafton has delivered a solid performance over the period, demonstrating the benefit of its balanced spread of operations across geographic markets and sectors.

“Despite macroeconomic challenges, particularly in the UK, the Group is confident that it will deliver on its expectations for the year.

Grafton is in a very strong financial position, enabling the Group to increase shareholder returns through a new share buy-back program announced today, which is our second buy-back program of 2022, while also improving the financial maintain flexibility to finance suitable acquisition opportunities.’

Eric Born will succeed Gavin Slark as the group’s chief executive on November 28.


See also  Fashion chain Next to develop Christmas sales