Grafton eyes more continental acquisitions

Grafton eyes more continental acquisitions

Building materials group Grafton has said it is looking to continental Europe for acquisition opportunities but is not ruling out bolt-on purchases in the UK and Ireland, where it owns the Woodie's DIY retail chain.

Chief executive Gavin Slark was speaking as the company reported adjusted pre-tax profit of £188.4m (€220m) for 2018, a 19% rise from the previous year.

Revenue was up 9% to £2.95bn, with strong Irish growth across its retail and merchanting business. Woodie's had an "excellent performance", Grafton said.

Mr Slark said the group "would not be restricted by geography" when it came to further acquisitions in Europe.

"They need to be good businesses, in strong markets and have good markets positions, have management teams we can work with, and potential for future growth.

"If you look at the balance sheet, we are in a very strong position to make acquisitions going forward, but we are very careful where," he said.

"Probably the next significant acquisitions will be outside of the UK, although I would have said that two years ago before we spent £80m on Leyland SDM, so you can never say never.

"The key is about the quality of the business rather than restricting ourselves by geography," Mr Slark added.

He said the group was particularly pleased with its Irish performance and that the firm was hopeful of further growth.

If you look at Ireland now as the fastest growing economy in Europe and look at our performance out of builders’ merchanting and Woodie’s, which is our exposure to the Irish consumer, we are delighted with the Irish performance. It is a real differentiator for Grafton to be able to be a major player in Ireland.

"I think Ireland has a long way to go. If you look at the amount of new building in the country, you’ve got about 18,000 homes built last year and I think everybody recognises to reach normality, Ireland needs 35,000 to 40,000 homes a year.

"One of the really good things is the pace of the recovery -- at this steady pace, it feels more sustainable in the medium-to-long term rather than the Celtic Tiger years. That bodes well for years to come."

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