Builders' merchant Grafton (GFTU) sounded an upbeat note at these results, thanks to a combination of self-help measures and improving end markets. On a like-for-like basis revenue rose 3 per cent and the group operating margin ticked up 60 basis points to 4.1 per cent on the back of tight cost control. That helped drive adjusted earnings per share up 48 per cent to 22.3p. Statutory figures (as shown in our table) show even higher growth due to the impact of a pension credit last year and restructuring costs in 2012.
The UK merchanting business was the star performer, with operating profit up 20 per cent to £75.9m as the builders' merchant market returned to growth after five tough years. There was also an encouraging trend in the Irish merchanting business, which the country's recovering housing market restored to growth in the second half. Operating profit in Ireland almost doubled to £5.2m, with branch rationalisation also boosting profitability.
Grafton says the current year has started well, as house price rises and better access to finance drive a pick-up in the housing repair, maintenance and improvement market. Indeed, chief executive Gavin Slark says all the signs are that Grafton is at "the start of the journey from recovery to growth again".
Broker Goodbody expects adjusted earnings per share of 28.5p this year (22.3p in 2013).
RAFTON (GFTU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 685p | MARKET VALUE: | £1.6bn | |
| TOUCH: | 684-685p | 12-MONTH HIGH: | 676p | LOW: 398p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 374p* | NET DEBT: | 15% | |
| Year to 31 Dec | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 1.98 | 13.6 | 5.8 | 5 |
| 2010 | 2.00 | 25.6 | 27.7 | 7 |
| 2011 | 2.05 | 10.3 | 1.1 | 7.5 |
| (£bn) | (£m) | (p) | (p) | |
| 2012 | 1.76 | 25.1 | 13.6 | 7 |
| 2013 | 1.90 | 67.7 | 26.8 | 8.5 |
| % change | +8 | +170 | +96 | +21 |
Ex-div: 12 Mar Payment: 11 Apr *Includes intangible assets of £481m, or a 207p share | ||||
