29th Aug 2024 10:12
(Alliance News) - Grafton Group PLC on Thursday announced a new buyback programme and raised its interim dividend, despite posting weaker financial results following challenging conditions in the first half.
The Dublin-based building materials distributor and DIY retailer said pretax profit fell 23% to GBP71.7 million in the first half that ended June 30 from GBP93.6 million a year previous.
Revenue declined 4.4% to GBP1.14 billion from GBP1.19 billion while operating costs were reduced by 2.8% to GBP1.07 billion from GBP1.10 billion.
The company raised its interim dividend by 5.0% to 10.5 pence per share from 10.0p.
Grafton announced its intention to launch a new GBP30 million share buyback programme, run by Goodbody Stockbrokers and Numis Securities. The buyback begins on Thursday and will end no later than December 31.
Chief Executive Officer Eric Born said: "This has been a robust first half performance despite challenging conditions in several of our markets. We are pleased with the performance and outlook of our Irish businesses in particular, and we continue to drive efficiencies and innovations in our other markets to capitalise on what we see as significant positive operating leverage opportunities as these markets turn."
Materials price deflation in steel and timber during the half negatively impacted revenue in the UK and Ireland, although Grafton said this has continued to moderate and improved the businesses affordability outlook.
Additionally, volumes were lower across the UK, Netherlands and Finland, with reduced household discretionary spending particularly hurting the repair, maintenance and improvement market in the UK.
Distribution revenue was down 4.1% to GBP951.8 million. Manufacturing revenue was down 17% to GBP54.6 million. Retail revenue was down 0.4% to GBP130.7 million.
"Whilst uncertainties remain in the short term, our medium-term outlook remains positive, supported by strong demand fundamentals, not least in the demand for new housing as markets normalise and consumer confidence improves. At this point in the year, with the important Autumn trading season yet to come, we continue to anticipate delivering adjusted operating profit for 2024 in line with analysts' expectations," Born said.
Consensus analyst forecasts for 2024 predict an adjusted operating profit of approximately GBP170.9 million, reflecting a 17% decline from GBP205.5 million in 2023.
Grafton shares were down 0.8% at 1,042.50 each in London on Thursday morning.
By Elijah Dale, Alliance News reporter
Comments and questions to [email protected]
Copyright 2024 Alliance News Ltd. All Rights Reserved.