Grafton Group sees no geographical constraints to future acquisitions

Grafton Group sees no geographical constraints to future acquisitions

The chief executive of Irish-based builders' suppliers group Grafton has said management will not be restricted to the countries in which the business already operates when looking for further acquisitions.

Last month Grafton announced a significant expansion to its Dutch operations with the €131m takeover of local ironmongery and ventilation systems specialist Polvo.

Speaking after Grafton's agm in Dublin, Gavin Slark said the group expects that deal to complete during the summer following approval by competition regulators in the Netherlands. Mr Slark said once the deal is completed Grafton may look at bolt-on acquisitions in the Dutch market.

However, he said Grafton is, ultimately, not bound by geography when identifying potential acquisition targets. The group operates builders' merchanting operations in Ireland, the UK, the Netherlands and Belgium. It also owns the Woodie's DIY retail chain here.

Grafton grew its revenues by 6.1%, on a year-on-year basis, to £962m (€1.1bn) in the first four months of this year. Sales in the core UK merchanting arm - which contributes more than 90% of annual group revenues - grew by just under 5%. Overall first quarter growth, however, was driven by the Irish and Dutch merchanting businesses - up 9.3% and 6.7% respectively.

Grafton's shares - up by 15% in the past 12 months and by 40% in the calendar year to date - rose by nearly 4% to more than £9, prompting a 'sell' call from one analyst.

Cantor Fitzgerald's Darren McKinley considers Grafton to be fully-valued against a backdrop of UK construction sector weakness, Brexit uncertainty and global trade concerns.


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