Grafton shares jump on the back of its UK asset sale

Sale of merchanting business earns a boost for building materials and DIY group which owns Woodie's

Grafton Group chief executive Gavin Slark. 

Shares in Irish-based building materials and DIY group Grafton jumped nearly 3.6% on its announcement of the sale of part of its traditional merchanting business in the UK.

Grafton’s shares initially jumped by over 5% on the announcement that Huws Gray — one of the largest independent builders’ merchants in the UK — has agreed to buy the business for up to £520m (€605m). That figure is better than expected, with analysts having expected a sale price closer to £400m.

Woodie’s DIY owner Grafton announced a strategic review of some of its core UK merchanting business in April. The sale covers a small number of brands including Buildbase, the Timber Group, and the Bathroom Distribution Group.

'Attractive outcome for Grafton'

The sale is expected to close by the end of the first quarter of 2022.

"This is an attractive outcome for Grafton and is in line with our strategy of deploying our capital resources towards higher growth potential businesses offering superior returns,” said Grafton CEO Gavin Slark.

Last month, Grafton announced it had reached agreement to buy Finland-based company IKH — which makes workwear, tools and personal protective equipment — for nearly €200m. 

That move spreads Grafton’s international presence beyond Ireland, the UK and the Netherlands.