Grafton Group shares moved up nearly 5% after it announced the acquisition of The Telford Group in Ireland and Plumbline Supplies in Scotland.
Plumbline is Scotland's leading independent plumbers merchant with 17 branches. The company reported sales of €40m for the year ended July 31 2003. Grafton's plumbing network in the UK trades under the Plumbase brand and this acquisition brings the network into Scotland for the first time. Plumbase will now have a total of 135 branches in the UK.
Telfords has three branches and is based in Portlaoise. The company holds a leading position in the midlands builders merchanting market and the acquisition enhances Grafton's coverage in that area. Telford's sales for the year ended January 31 2003 were €27m.
The cash consideration for both companies totals €40m.
Michael Chadwick, chairman of Grafton said: 'The Plumbline acquisition gives the group an initial but important presence in the Scottish plumbers merchanting market... The Telford acquisition is significant in strengthening our presence in the midlands... We are committed to the continued growth of our branch network in Ireland as well as overseas.' Davy Stockbrokers said the Plumbline and Telford acquisitions will add at least €67m to the group's revenue base on an annual basis and that because of this, the brokers are nudging up their diluted adjusted EPS forecast for 2004 from 49c to a little over 50c, implying forecast earnings growth of almost 15%.
