DIY and building materials distributor Grafton Group has reported higher profits and revenues for the six months to the end of June - meeting expectations.
The owner of Chadwicks and Woodie's said its revenues for the first half of 2025 rose by 10.1% to £1.252 billion from £1.137 billion the same time last year, while its adjusted profit before tax increased by 3.2% to £86.8m from £84.1m.
Grafton said its interim dividend increased by 2.4% and it announced the start of a further £25m share buyback which will be funded by strong free cash flow generated during the year.
The company said its full year adjusted operating profit is expected to be broadly in line with analysts' expectations with the "important" Autumn trading period still to come.
It reported a strong performance in Ireland with the acquisition of HSS Hire Ireland complementing its Chadwicks’ hire business, while it said its Woodie's DIY chain delivered a strong performance in the first half of the year.
It said Chadwicks performed well in the first half as trading activity continued to recover from poor weather in January. Average daily like-for-like revenue was up 3.7% in the first half, largely due to materials price inflation of 3.5%, which accelerated in the second quarter, it said.
Meanwhile, average daily like-for-like sales at Woodie's were up 7.6% in the first half compared to last year as favourable weather conditions underpinned a particularly strong performance in plants and garden related products with some seasonal demand pulled forward into the spring trading months.
It said that revenue growth of 7% was supported by increases of 5.5% in the number of transactions and 1.5% in average transaction value. Online sales increased by 34.6% in the first half of the year, Grafton noted, representing 4.7% of total sales.
The company also noted that its UK Distribution returned to profit growth for the first time since 2021 despite a challenging RMI market.
The Integration of the Salvador Escoda business in Spain is also progressing well and Grafton said it was seeing positive progress in pursuit of further organic and inorganic growth opportunities in Iberia, which it described as an attractive and fragmented growth market.
Meanwhile, activity in the Netherlands remains relatively subdued, while Grafton said a strengthened management team is in place in its Finland operations to maximise opportunities when the market recovers from historical lows there.
Eric Born, Grafton Group's chief executive, said the company delivered a resilient performance in the first half, with revenue and profit approximately 10% higher than the same period last year, driven by strong contributions from Spain and Ireland.
"Following the platform acquisition of Salvador Escoda, non-UK markets now account for approximately 64% of the group’s turnover. Given our ambition to be a leading player in the European building materials distribution market and our exposure to the growing and fragmented Iberian market, we would expect that diversification trend to continue," the CEO said.
He said that while the company we saw an easing of trading momentum towards the end of May and into June, the start of the second half has seen a return to growth of group average daily like-for like revenue.
"Outlook for the full year varies by market, but in the round, and with the important Autumn trading months to come, we expect full year adjusted operating profit to be broadly in line with analysts’ expectations," he said.
"More widely, after having returned over £403m to shareholders by buying back almost one fifth of the group's shares since May 2022, our strong balance sheet and liquidity leaves Grafton in an excellent position to execute our growth strategy," Eric Born said.
"Despite lingering cyclical lows, we continue to invest in the UK, the Netherlands and Finland, given their strong recoverability potential over time. In addition to organic development, we are actively pursuing bolt-on and platform acquisitions in our chosen European markets," he added.
Grafton said it expects to deliver full year adjusted operating profit broadly in line with analysts' expectations recognising the important Autumn trading season has still to come.
It said that positive trading conditions are expected to continue in Ireland and Spain, adding that it anticipates a continuation of similar trading conditions in our other geographies in the second half of 2025.
"Notwithstanding the impact of US imposed tariffs and any associated economic consequences, the medium-term fundamentals remain positive for Grafton, with structural housing shortages across all our geographies and an expected recovery in RMI demand after several consecutive years of low levels of investment by households," the company said.
"In Ireland, the outlook for the economy in the second half remains cautiously optimistic and construction activity in the second half of 2025 is expected to mirror the trends observed in the first half. The prospects for growth in the construction market remain positive, driven by strong government support and the recently announced revised €112 billion National Development Plan aimed at housing and infrastructure," Grafton added.
Grafton said that group average daily like-for-like revenue in the period from July 1 to Aug 24 was 2.3% ahead of the same time last year, supported by strong growth in Ireland and in its manufacturing businesses.
"UK Distribution average daily like-for-like revenue was broadly flat and similar to the trend in the first half whilst showing an improvement in comparison to the weak trading activity experienced from mid-May to the end of June," it said.
"Sales in the Netherlands were impacted by the timing of regional holidays and weaker project related sales. In Finland, performance continues to be below expectations against the backdrop of a weak economy and management are taking active steps to improve performance. Our manufacturing businesses performed well in comparison to a weak trading period in the prior year," Grafton said.
"On a pro-forma basis in comparison to prior year, average daily like-for-like revenue in Spain increased by 9.4% due to a strong air conditioning summer campaign supported by hotter weather conditions," it added.
