Grafton looks to further growth in European markets

Grafton looks to further growth in European markets

By Pádraig Hoare

The boss of the Grafton Group has said the building merchants firm is “not constrained by geography” and is looking at further acquisitions in Europe.

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Gavin Slark was speaking as the Dublin-based firm said revenues rose 9% to £2.7bn (€3.04bn) last year.

The owner of Woodie’s DIY said pre-tax profits were £154.5m, an increase of 35%.

Net debt for the London-listed firm fell to just under £63m from £96m in 2016, the lowest it has been for 20 years, according to Mr Slark.

Grafton owns brands such as Selco in the UK as well as Woodie’s DIY in Ireland, while it also has operations in Belgium and Holland.

Its Irish merchanting business saw double digit like-for-like revenue growth for the fourth consecutive year with revenue up almost 9% to £403m and operating profit up 23% to £35.5m, the firm said.

The firm said its UK merchanting business, which is its largest source of revenue, “made good progress” with revenues up almost 5% at £1.8bn and operating profit of more than £100m.

Woodie’s DIY revenues were up almost 15% to over £180m while operating profit was up 53% to £11.2m.

Mr Slark said he was “very pleased” that the dividend for shareholders increased by 13% as it meant the strategy of growth the firm had pursued had paid off.

Further acquisitions were likely and the group could look to expand in more European markets, he said.

“The dividend has increased 120% over five years, which shows good capital growth. We don’t feel constrained by geography and if there are opportunities in good markets, then we will pursue them. We have got a model that is working and there is no desire to change it,” he said.

He ruled out any move into areas such as electronics, saying the group would “stick to what we are good at”.

Mr Slark said it was not in Grafton’s interest to buy troubled firms “on the cheap” looking for a quick turnaround.

While there were enough Woodie’s DIY stores in the Republic, the firm would look to increase job numbers, he said.

“Woodie’s DIY had a super year. We have got most of the country covered in terms of stores but we will be looking for more staff as we grow.”

While the US market was an attractive one especially with a massive infrastructure plan in the pipeline if a deal can be reached in the US Congress, Mr Slark ruled out any move for Grafton in the country for now, saying there was enough to focus on in the UK, Ireland and continental Europe.

Shares were up more than 1%.

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