Grafton Group (GFTU) H2 2023 earnings summary

Executive summary

• Revenue rose 0.8% to £2,319.2m in 2023, while adjusted operating profit before property profit fell 21.6% to £204.2m amid lower volumes, price deflation and weaker trading conditions in several markets.

• Resilient retail and manufacturing results, strong cash generation and £380m net cash before leases supported £228.3m returned to shareholders through dividends and share buybacks.

Financial highlights

• Adjusted operating profit was £205.5m versus £285.9m; statutory operating profit was £183.1m versus £264.3m, and statutory profit before tax was £183.5m versus £251.7m.

• Adjusted profit before tax was £205.9m versus £273.3m; adjusted profit after tax was £166.5m versus £225.6m, and adjusted EPS was 77.9p versus 96.6p.

• Dividend per share increased 9.1% to 36.0p; dividend cover was 2.2x versus 2.9x.

Outlook and guidance

• 2024 Group like-for-like revenue is expected to be relatively flat; there may be signs of improvement in H2, while cost inflation remains a headwind and efficiency remains a focus.

• 2024 technical guidance: depreciation and amortisation £115m–£120m; gross capex excluding acquisitions and disposals £65m, including £30m replacement and £35m development spend.

• Net finance charge is expected to be ~£3m, including ~£15m of IFRS 16 lease costs, subject to acquisition timing; estimated 2024 tax rate is ~21.0%, rising slightly to ~21.6% in the medium term.

• No significant property profit contribution is expected in 2024.