REG - Grafton Group PLC - Final Results
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RNS Number : 3976V Grafton Group PLC 05 March 2026
Final Results
For the Year Ended 31 December 2025
Grafton Group plc
Final Results for Year Ended 31 December 2025
Good year of progress despite challenging market conditions
Grafton Group plc ("Grafton" or "the Group"), the European multinational
distributor of construction related products and solutions is pleased to
announce its final results for the year ended 31 December 2025.
Financial Highlights
§ Full year adjusted operating profit was ahead of expectations(1), increasing
by 7.1% to £190.2m (2024: £177.5m) mostly driven by the first full year
contribution of Salvador Escoda in Spain
§ Strong margin discipline delivered a 50bps improvement in gross margin,
helping to maintain a resilient Group operating margin of 7.3% (2024: 7.6%)
despite ongoing operating cost pressures
§ Return on capital employed up 60bps to 10.9% (2024: 10.3%)
§ Adjusted earnings per share grew by 5.1% to 75.4p (2024: 71.8p)
§ Strength of balance sheet with £274.0m net cash (before lease liabilities)
(2024: £272.1m) provides significant firepower to capitalise on organic and
inorganic development opportunities
§ Another year of strong free cash flow generation contributing to more than
£700m of free cash flow generated over the last four years
§ A new £25.0m share buyback programme, following £129.2m (2024: £154.1m)
returned to shareholders in share buybacks and dividend payments in 2025
§ Full year dividend of 37.75p (up 2.0%) with dividend cover (2025: 2.0 times)
at the lower end of the medium‑term target range of two to three times
adjusted earnings
Operational Highlights
§ Experienced senior leadership team in place to execute strategy across our
geographies, Mario Ballarín appointed to the new role of CEO Grafton Iberia
§ Continuing investment to strengthen and consolidate market positions
notwithstanding current market weakness in some of our geographies
§ Strong performance in Island of Ireland
§ Profit growth in Great Britain despite a weakening RMI market and slow
housebuilding recovery
§ In Iberia, Salvador Escoda has been successfully integrated and performed in
line with our pre-acquisition expectations recording profit growth(4) in 2025
§ Northern Europe remains challenging but macro indicators improving
Total Operations(2) 2025 2024 Change
Revenue £2,520m £2,282m 10.4%
Adjusted(3) operating profit £190.2m £177.5m 7.1%
Adjusted operating profit before property profit £184.3m £173.5m 6.2%
Adjusted operating profit margin before property profit 7.3% 7.6% (30bps)
Adjusted profit before tax £180.1m £178.9m 0.7%
Adjusted earnings per share 75.4p 71.8p 5.1%
Full year dividend 37.75p 37.00p 2.0%
Adjusted return on capital employed (ROCE) 10.9% 10.3% 60bps
Net (debt) (including IFRS 16 lease liabilities) (£123.4m) (£131.7m) £8.3m
Net cash (before IFRS 16 lease liabilities) £274.0m £272.1m £1.9m
Statutory Results 2025 2024 Change
Operating profit £174.8m £152.6m 14.6%
Profit before tax £165.1m £152.5m 8.3%
Basic earnings per share 70.3p 60.9p 15.4%
(1) Grafton compiled consensus Analysts' forecasts for 2025 show adjusted
operating profit of circa £181.8m and a range of £180.0m to £183.0m.
(2) Supplementary financial information in relation to Alternative Performance
Measures (APMs) is set out on pages 40 to 45.
(3) The term "Adjusted" means before exceptional items, amortisation of
intangible assets arising on acquisitions and acquisition related items in
both periods, which are defined on page 40.
(4)Like-for-like results are presented on a proforma basis to reflect the
performance of Salvador Escoda, which was acquired by the Group on 30 October
2024, as though it had been part of the Group for the entire comparative
period.
( )
Outlook
Positive trading conditions are expected to continue in the Republic of
Ireland ("ROI") and Spain, however, in our other geographies, markets are
anticipated to remain challenging in 2026. Whilst the Island of Ireland and
Iberia segments performed strongly, meaningful recovery in Great Britain and
Northern Europe did not materialise as anticipated in 2025 and the exit rate
of activity from 2025 was weaker than expected; consequently, the timing of
any improvement in these two segments in the year ahead remains uncertain.
Our experienced management teams will continue to maintain a tight focus on
efficiency, cost control and delivering value to customers. Despite moderating
momentum through the second half, the outlook for Grafton remains favourable,
supported by structural growth drivers, strong market positions across all
regions, the recovery potential in Great Britain and Northern Europe, a robust
balance sheet and a healthy acquisitions pipeline.
In our Island of Ireland segment, we expect the construction market in the ROI
to continue to deliver solid growth, supported by increased public‑sector
capital investment and a favourable economic backdrop, while no significant
volume uplift is anticipated in Northern Ireland due to ongoing weakness in
the local economy. We remain vigilant that retail consumer sentiment in the
ROI has turned slightly more cautious, with ongoing cost‑of‑living
concerns contributing to weaker confidence.
In Great Britain, the near‑term outlook for the construction market remains
subdued following the loss of momentum in the latter part of 2025. While
easing inflation and supportive interest rates should help, growth in 2026 is
likely to be modest and weighted towards the second half.
In Northern Europe, the Dutch construction market is expected to recover
gradually in 2026 after growth slowed significantly in the second half of
2025, while in Finland any meaningful construction volume improvement is
likely to be delayed until the second half of 2026.
In Iberia, the Spanish construction market is expected to maintain its
recovery in 2026, with growth of around 3-4%, supported by sustained housing
demand, substantial investment in renewable energy and transport
infrastructure, and the accelerating shift toward energy‑efficient and
sustainable building practices.
Group average daily like-for-like revenue in the period from 1 January 2026 to
28 February 2026 was 0.2% ahead of the same period last year. Trading in the
early part of the year was impacted by prolonged wet weather across our
businesses in the Island of Ireland and Great Britain. However, the Island of
Ireland remained ahead of the prior year, supported by softer comparators,
following the impact of Storm Éowyn in 2025. Notwithstanding unfavourable
weather conditions, the market environment in Great Britain remained
challenging. In Northern Europe, the return of winter weather conditions
supported strong trading activity in Finland, while trading in the Netherlands
was negatively affected by the timing of public holidays. Our business in
Iberia performed strongly, with the momentum achieved in 2025 carrying into
the new year.
Average Daily Like-for-Like Revenue Change in Constant Currency
Q4 2025 1 Jan 2026 - 28 Feb 2026
Island of Ireland +0.9% +3.1%
Great Britain 0.0% (5.7%)
Northern Europe (2.3%) +0.8%
Iberia +4.4% +4.8%
Total Group +0.2% +0.2%
Iberia pro forma(4) +2.6%
( )
Eric Born, Chief Executive Officer Commented:
"Delivering profitability ahead of analysts' consensus, despite inflationary
pressures and challenging conditions in some of our markets, reflects the
successful execution of our strategy of scaling positions across multiple
geographies combined with a strong operational focus. We've sustained our
focus on margin management, whilst also using our robust balance sheet to
invest in strengthening our market positions and our customer proposition.
Grafton's resilience in 2025 points to substantial profitability upside as
demand recovers in weaker markets and as we scale our presence organically and
through complementary acquisitions.
"We are very encouraged by our strong acquisition pipeline, supported by our
highly cash generative business that retained £274m net cash at year-end, and
which has supported the return of over £428m to shareholders by way of share
buybacks since May 2022.
"We expect continued growth in the Island of Ireland and Iberia however
elsewhere market conditions remain mixed. Though market improvement in Great
Britain and Northern Europe is expected to be gradual, we remain upbeat on
outlook over the medium term based on structural demand tail winds, positive
operating leverage and the scalability and efficiency of our businesses as
markets normalise."
Webcast and Conference Call Details
A copy of the results presentation document will be available at 7:00am on 5
March 2026 via the home page of the Company's website www.graftonplc.com
(http://www.graftonplc.com) .
A presentation for analysts and investors will be hosted by Eric Born and
David Arnold at 9:45am on 5 March 2026. A live webcast of the presentation
including Q&A will be available to view via the Company's website at
www.graftonplc.com (https://www.graftonplc.com/) or by clicking here
(https://stream.brrmedia.co.uk/broadcast/6960e5b321449c0013b3b501) .
Analysts will be invited to raise questions during the presentation. Should
investors wish to submit a question in advance, they can do so before 9.00am
on 5 March 2026 by sending an email to ir@graftonplc.com
(mailto:ir@graftonplc.com) . A recording of the webcast will be made
available on the Company's website.
Investors Media
Grafton Group plc +353 1 216 0600 Murray pwalsh@murraygroup.ie (mailto:pwalsh@murraygroup.ie)
Eric Born Chief Executive Officer Pat Walsh +353 1 498 0300/+353 87 226 9345
David Arnold Chief Financial Officer
Burson GraftonGroup@buchanancomms.co.uk
Buchanan
Helen Tarbet +44 (0) 7872 604 453
Simon Compton +44 (0) 7979 497 324
Toto Berger +44 (0) 7880 680 403
Forward-looking statements
This announcement may include forward-looking statements. These
forward-looking statements can be identified by the use of forward-looking
terminology, including the terms "outlook," "believe(s),"expect(s),"
"potential," "continue(s)," "may," "will," "should," "could," "would,"
"seek(s)," "predict(s)," "intend(s)," "trends," "plan(s)," "estimate(s),"
"anticipates," "projection," "goal," "target," "aspire," "will likely result"
and other words and terms of similar meaning or the negative versions of such
words or other comparable words of a future or forward-looking nature. These
forward-looking statements include all matters that are not historical facts
and include statements regarding Grafton's or its affiliates' intentions,
beliefs or current expectations concerning, among other things, Grafton's or
its affiliates' results of operations, financial condition, liquidity,
prospects, growth, strategies and the industries in which they operate. By
their nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that may or may not
occur in the future. Readers are cautioned that forward-looking statements are
not guarantees of future performance and that Grafton's or its affiliates'
actual results of operations, financial condition and liquidity, and the
development of the industries in which they operate may differ materially from
those made in or suggested by the forward-looking statements contained in this
press release. In addition, even if Grafton's or its affiliates' results of
operations, financial condition and liquidity, and the development of the
industries in which they operate are consistent with the forward-looking
statements contained in this press release, those results or developments may
not be indicative of results or developments in subsequent periods. The
directors do not undertake any obligation to update or revise any
forward-looking statements, whether because of new information, future
developments or otherwise.
Group Strategy
Grafton's long-term growth ambition is to be the leading European
multinational distributor of construction related products and solutions. Our
customers are predominantly trade customers and whilst we operate in different
geographies and serve many product segments, our customers share many common
characteristics and needs, not least the certainty and trust of getting the
products and solutions they want, when they want them.
Our objective is to create value for our shareholders by deploying capital and
seeking to build our presence in markets and formats in geographies which have
long-term growth characteristics which are likely to exceed the rate of growth
of their underlying economies based on the expected long-term spend on
residential and commercial property improvement, maintenance and development.
We recognise that construction markets are cyclical and we try to look beyond
the short term to create long-term, enduring value. Our geographic diversity
provides greater resilience than a focus on a single country.
We operate a federated structure with clear local accountability overseen by a
performance led management regime, using our core operational skills and
knowledge to drive optimal outcomes from each of our operating businesses.
Where we look to add value as a Group is in the shared knowledge and expertise
which we have in serving our trade customer base. We retain a small number of
subject matter experts in key functional areas at the centre of the Group and
augment this team with cross-business resources and a programme of knowledge
sharing and best practice. This helps to support key initiatives in existing
businesses and to assist the development of newly acquired businesses.
We operate in four geographical areas: Island of Ireland, Great Britain,
Northern Europe and Iberia and our near-term focus is to strengthen our
presence in these existing geographies while building a pipeline of new
geographic opportunities for longer-term development. While we remain open to
value-creating opportunities, capital deployment will primarily focus on
reinforcing existing market positions in the near term.
Capital allocation remains a key priority for the Board. Given the cyclical
nature of our industry, we aim to maintain our investment grade credit rating
with a maximum financial leverage of around 2 times EBITDA when compared to
lease adjusted net debt. The ceiling for financial leverage is considered
with due regard to the position in the economic cycle with higher levels of
leverage sustainable during an upswing.
Grafton is in a financially strong position; at the end of December 2025 our
net cash position was £274.0m and net debt position inclusive of leases was
£123.4m, equating to financial leverage of 0.39 times. This strength enables
the Group to take advantage of the continuing opportunities to deploy capital
to generate future value for shareholders. Furthermore, an underlying strength
of Grafton is its capacity to turn its profits into free cash flow. We
calculate our free cash flow after we have paid our finance costs, made the
lease payments on our property, invested in the replacement capital
expenditure we need to make and paid our taxes. Judged against this benchmark,
Grafton has generated more than £700m in free cash flow over the last four
years.
Within the framework of limiting financial leverage to around 2 times, we
allocate capital over the longer term based on the following order of
priority:
1. Strengthening our current business and investing capital to fund organic
growth;
2. Core dividend at a target coverage ratio of between 2 and 3 times earnings;
3. Funding inorganic growth to generate long-term value for shareholders with
such investments assessed against the potential benefits to shareholders of a
return of surplus capital; and
4. Returning surplus capital to shareholders through share buybacks or special
dividends depending upon the Board's view of their respective relative value
to shareholders.
Over the years, the Group has been consistently disciplined in its capital
allocation. In 2021, it disposed of a material part of the Group with the sale
of the traditional GB merchanting business because the Board did not believe
it would deliver either the financial returns or growth prospects to meet
Grafton's objectives. Since May 2022, Grafton has reduced its share count by
over 20% through share buybacks, deploying £428m of capital to achieve this.
Following extensive market review, Grafton entered the fast-growing Spanish
air conditioning market in late 2024 with the acquisition of Salvador Escoda.
When deciding to make acquisitions, the Board always considers the alternative
returns afforded by way of share buybacks and vice versa. With the current
financial position of the Group and its underlying cash generation ability, it
retains the capacity to both make acquisitions and return capital to
shareholders.
Final Results for the Year Ended 31 December 2025
Business Review
Grafton's performance in 2025 highlights the resilience and strength of its
cash generative diversified operations, its sustained focus on margin
management, and its continued investment in strengthening its market
positions, despite weak trading conditions outside the Island of Ireland and
Iberia. Trading activity reflected a marked slowdown in the second‑half in
several markets, partially mitigated by tight cost control and the benefit of
self-help actions in all geographies.
The Group's cost discipline and investment in its market position over recent
years has paved the way for a very positive operating leverage effect as
weaker markets recover and incremental sales contribute disproportionately to
profitability. We continue to see opportunities for consolidation across our
markets and, consistent with our long -term ambition to be the leading
multinational distributor of products and solutions to the European
construction market, we remain focused on identifying and executing
acquisitions to reinforce and increase our market presence.
The Group's gross margin increased by 50 basis points during 2025, driven by a
strong focus on margin management across all businesses. This improvement was
supported by targeted pricing actions, a strong focus on customer value,
procurement efficiencies, and strengthened supplier support.
Grafton has established an experienced senior leadership team to execute the
Group's strategy across our geographies. Mario Ballarin was appointed to the
new role of CEO Grafton Iberia to lead the advancement of the Group's growth
ambitions in the region. Our management teams continue to take decisive
actions to mitigate labour and property cost pressures by focusing on
productivity improvements, streamlining processes, and implementing efficiency
initiatives. The Group is also investing in technology that enables greater
operational efficiency, including successful implementations of new ERP
systems in both Woodie's and Leyland SDM.
Adjusted operating profit before property profit increased to £184.3m (2024:
£173.5m) with the increase driven in large part from the first full year of
contribution from Salvador Escoda in Spain. Adjusted operating profit of
£190.2m (2024: £177.5m) included property related profits of £5.9m (2024:
£4.0m).
We are pleased with the results of our Island of Ireland business which
achieved good growth in profitability in 2025 underpinned by year-on-year
sales growth across all businesses. Growth in profits was driven by strong
performances in both Woodie's and Chadwicks.
Despite a continuing weak RMI market backdrop, especially in the greater
London area and slow recovery in the housebuilding sector, our Great Britain
business delivered profit growth in the year, albeit from a cyclical low.
Targeted commercial actions improved gross margin, offsetting high labour and
property costs, despite subdued demand.
Northern Europe saw lower profits due to reduced sales in Finland and
inflation‑driven overhead pressure in both the Netherlands and Finland. The
Netherlands started the year strongly but softened in the second half, while
Finland continued to face economic and construction‑sector weakness.
In Iberia, Salvador Escoda has been successfully integrated into the Group
during its first full year of ownership. Trading in the year, which was in
line with pre-acquisition expectations, contributed revenue of £212.9m and
adjusted operating profit of £13.6m. This region provides a strong platform
for Grafton to substantially scale our operations there over the next five
years, through a combination of organic growth and market consolidation
opportunities.
Change to Operating Segments
During the financial year ended 31 December 2025, the Group has adopted a new
reporting structure which better reflects the Group's strategy - the
distribution of construction related products and solutions serving geographic
markets with scalable formats that can deliver long-term growth for
shareholders.
The Group is now organised into four geographical areas: Island of Ireland,
Great Britain, Northern Europe and Iberia. Previously Grafton was organised on
the basis of: five distribution segments, one retailing segment and one
manufacturing segment.
The operating segments are now aligned with these geographical areas and
better align with how the Board manages the business, assesses performance and
allocates capital and resources for organic and inorganic growth:
Island of Ireland - comprising Chadwicks, Woodie's, MacBlair and MFP (divested 31 May 2025)
Great Britain - comprising Selco, Leyland SDM, TG Lynes, CPI EuroMix and StairBox
Northern Europe - comprising Isero and Polvo in the Netherlands and IKH in Finland
Iberia - comprising Salvador Escoda in Spain
Comparative figures for 2024 have been restated to reflect the new structure.
The realignment has no impact on the Group's consolidated financial results.
Returns to Shareholders
Dividends and Share Buybacks
The Board is recommending a full year dividend of 37.75 pence per share, an
increase of 2.0% on dividends of 37.00 pence paid for 2024. The final dividend
for 2025 is 27.00 pence (2024: 26.50 pence) per ordinary share, an increase of
1.9%. An interim dividend of 10.75 pence per share (2024: 10.50 pence) was
paid on 10 October 2025.
The final dividend has been increased at a lower level than the rate of growth
in adjusted earnings per share, consistent with the Board's intention to
re‑establish full‑year dividend cover more firmly within its medium‑term
target range of two to three times adjusted earnings. The total dividend for
2025 of 37.75 pence is covered 2.0 times by adjusted earnings per share of
75.43 pence (2024: 71.78 pence and 1.9 times cover).
The Group's cash outflow on dividends paid during the year was £72.6m (2024:
£73.2m). A liability for the final dividend has not been recognised at 31
December 2025 as there was no payment obligation at that date.
The final dividend will be paid on 21 May 2026 to shareholders on the Register
of Members at the close of business on 24 April 2026, the record date. The
ex-dividend date is 23 April 2026. The final dividend is subject to approval
by shareholders at the Annual General Meeting to be held on 15 May 2026.
Reflecting its disciplined approach to capital deployment and supported by its
resilient balance sheet and strong cash conversion, Grafton has completed
seven share buyback programmes since May 2022. This has returned cash of
£428.3m to shareholders through share buybacks reflecting the repurchase of
49.28m ordinary shares at an average price of £8.69 per share. In total, the
Group has reduced its share count by 20.5% since the first buyback programme
commenced.
Capital allocation decisions remain under the ongoing oversight of the Board,
which is committed to a disciplined and balanced approach to the deployment of
capital. Reflecting the Group's continuing strong cash‑generative
performance, a new share buyback programme of up to £25.0m is announced
today, commencing on 5 March 2026. The Group's robust cash generation provides
the flexibility to return capital to shareholders through dividends and share
buybacks, while simultaneously maintaining the capacity to pursue an active
and growing pipeline of acquisition opportunities.
Progress on Sustainability
In our 2025 Annual Report and Accounts, released today, we have published
our sustainability progress and performance for 2025. This covers the five
areas of our strategy: Planet, Customer and Product, People, Community and
Ethics.
2025 saw the legislative landscape relating to sustainability change
rapidly. Our governance committees including the Board and Executive
Sustainability Committee stayed up to date on these developments and have
reaffirmed the businesses commitment to sustainability.
We are pleased to demonstrate progress in the following key areas:
§ Health and Safety
§ Since 2021, lost time injury frequency rate has reduced by 16.3% and
severity rate has reduced by 38.6%. In 2025, we developed an all-colleague
reporting system to log safety hazards and concerns in addition
to our established incident reporting systems.
§ HR
§ Senior leadership appointments to strengthen the management of our businesses
and execution of our strategy as follows:
§ Carmen Lothian appointed as Group Chief Human Resources Officer following the
retirement of Paula Harvey
§ Nathan Bishop appointed to a new role of Group Chief Information Officer to
lead our Technology, AI and Digital strategy
§ Frank Elkins appointed as CEO to lead our businesses in Great Britain
§ Anu Ora appointed as Managing Director to lead our business in Finland
§ Mario Ballarín appointed to the newly created position of Grafton Iberia CEO
to lead our expansion in Spain
§ Selected a Group-wide talent system which is being rolled out across the Group
to support our performance management culture
§ Over 750 colleagues participating in government funded training schemes across
the Group
§ Climate Change
§ 40.3% reduction in absolute market-based Greenhouse Gas emissions in
2025 vs the 2021 base year for scope 1 and 2
§ Supply Chain Due Diligence
§ Launched our EcoVadis supply chain due diligence programme
§ 89.5% of suppliers by spend have had the initial risk assessment*
§ Operational Waste
§ 99.2% diversion of operational waste from landfill
§ Community investment
§ Over £1.7m donated to charities and good causes through cash, in kind or
volunteering, which equates to 0.93% of our adjusted operating profit before
property profit for the year, significantly higher than our target of
0.8%.
§ Human Rights
§ Completed a human rights risk assessment and published
our Human Rights Policy
* Spend excludes Salvador Escoda. These suppliers will be uploaded in phase 2
of the programme in 2026 as their sustainability onboarding is completed.
Segmental Review
The Group's businesses in the Island of Ireland contributed 42.5% (2024:
44.5%) of Group revenue, Great Britain 30.4% (2024: 33.6%), Northern Europe
18.6% (2024: 20.6%) and Iberia 8.5% (2024: 1.3%).
Our geographies broadly had one fewer trading day compared to the same period
in the prior year, except for the Netherlands, which had two fewer trading
days and Spain which has one day more for the period under ownership.
Island of Ireland (42.5% of Group Revenue, 2024: 44.5%)
2025 2024 Constant
Restated Currency
£'m £'m Change* Change*
Revenue 1,071.6 1,016.2 5.4% 4.3%
Adjusted operating profit before property profit 111.0 107.5 3.2% 1.8%
Adjusted operating profit margin before property profit 10.4% 10.6% (20bps) -
*Change represents the movement between 2025 v 2024 and is based on unrounded
numbers
Our Island of Ireland segment includes the Chadwicks and Woodie's businesses
in the ROI, along with our MacBlair business in Northern Ireland. Chadwicks is
a leading distributor of building materials, operating from 64 locations.
Woodie's is the market‑leading DIY, Home and Garden retailer, supported by a
network of 35 stores and a growing online platform. Both are complementary
businesses that enable the Group to serve the broadest range of customers with
construction related products in the ROI. In Northern Ireland, MacBlair is a
leading distributor of building materials, operating across 23 branches.
Average daily like-for-like revenue increased by 3.5% in the year underpinned
by year-on-year growth across all businesses. Woodie's delivered another year
of strong growth, supported by a particularly strong performance in plants and
garden products. Growth was driven predominantly by increased transaction
volumes, alongside incremental gains in average transaction values. Continued
investment in our digital offering, including the successful rollout of a new
ERP system in 2025, drove a 30.2% year‑on‑year increase in online sales
(61% above 2022 levels), with online channels representing almost 5% of total
sales for the year. Despite modest growth in the segments of the Irish
construction market served by Chadwicks, the business delivered a positive
sales performance with particularly strong performance across the hardware,
heating and plumbing categories.
ROI's economy provided a supportive backdrop in 2025, with full employment and
relatively modest inflation, including energy deflation in the first half of
the year, helping to sustain resilient consumer spending. While overall
housing completions of just over 36,000 surpassed expectations, this increase
was largely driven by apartment construction, and the share of smaller units
in the affordable and social housing segments continues to rise. In contrast,
smaller-scale developments and medium to large-sized housing schemes, markets
that offer a more attractive customer profile for Chadwicks, have continued to
decline as a proportion of Ireland's total housing activity. Activity in the
commercial sector has begun to recover after several years of decline, and
government‑supported investment in infrastructure continues to grow.
However, the ramp‑up in housing supply remains slower than market demand,
constrained by external factors including planning delays, challenges in
securing utility connections, and ongoing labour shortages. RMI activity
remains subdued as affordability concerns continue to weigh on demand. In
Northern Ireland, market conditions remain challenging, with the construction
sector delivering modest growth in 2025, primarily due to growth in new
housing, from a low base.
Gross margin increased by 20 basis points in the year, driven primarily by the
strong performance of Chadwicks, where active commercial management maintained
disciplined pricing, secured improved supplier support, and delivered
additional supply‑chain efficiencies.
Overheads were higher than 2024 due to inflationary pressures, led by
government‑mandated wage increases in both jurisdictions and higher national
insurance costs in Northern Ireland, alongside broader general cost inflation.
All our businesses have continued to focus on productivity improvements by
streamlining processes, leveraging technology and proactively managing
rostering to help offset the impact of wage inflation.
Adjusted operating profit before property profit increased to £111.0m (2024:
£107.5m) and adjusted operating profit margin before property profit was 20
basis points below 2024 at 10.4% reflecting the continued impact of
inflationary pressure on overheads.
While consumer sentiment in the ROI has turned a little more cautious, the
medium‑term growth outlook for the construction sector remains positive
supported by consistent government policy and increased investment in housing
and infrastructure under the revised €112bn National Development Plan
(2026-2030). Solid growth is expected in the overall construction market in
the ROI in 2026 supported by a step-up in investment in the public sector
capital programme and a generally favourable economic environment. In Northern
Ireland, a significant uplift in volumes is not anticipated in 2026 due to the
underlying weakness in the local economy.
The integration of HSS Hire Ireland, acquired on 31 May 2025, into Chadwicks
continues to progress with the short-term focus on systems integration. HSS
Hire Ireland is a tool and equipment hire specialist operating from four
branches and four customer distribution centres in the ROI. It offers an
extensive range of conventional hire products as well as specialist equipment
with a particular focus on powered access machinery. This acquisition aligns
with Chadwicks' strategy of consolidating its market position and enhancing
its value proposition by broadening its offering to support its long-term
growth objectives.
We continue to explore organic and inorganic growth opportunities in the
Island of Ireland to complement and strengthen our existing footprint, while
also investing in the expansion of our product range and digital platforms to
better meet the evolving needs of customers.
The consolidated results for 2025 include five months of trading, representing
adjusted operating profit of £1.0m, from the Group's MFP piping business in
Ireland prior to its divestment on 31 May 2025 to Wienerberger AG which mainly
operates through Pipelife Ireland Solutions Limited. The net profit on the
disposal of the MFP business was £8.1m in the year which is reported under
'Exceptional items'. As part of the agreement to sell MFP, Grafton will
continue an ongoing trading relationship for the supply of products with
Pipelife Ireland Solutions Limited.
Great Britain (30.4% of Group Revenue, 2024: 33.6%)
2025 2024
Restated
£'m £'m Change*
Revenue 765.4 767.0 (0.2%)
Adjusted operating profit before property profit 49.2 46.4 6.2%
Adjusted operating profit margin before property profit 6.4% 6.0% 40bps
*Change represents the movement between 2025 v 2024 and is based on unrounded
numbers
Our Great Britain segment comprises both distribution and manufacturing
businesses with a predominant geographical exposure to London and the
Southeast. Our distribution operations include Selco, the leading trade‑only
builders' merchant focused on the RMI market and operating 74 branches;
Leyland SDM, a well‑known decorating and DIY retailer with 36 London stores;
and TG Lynes, a specialist distributor of commercial pipes and fittings based
in London. Our manufacturing operations include CPI EuroMix, which supplies
dry mortar to national, regional and local housebuilders across Great Britain
from ten plants, and StairBox, the market‑leading manufacturer of bespoke
timber staircases as well as wooden windows and doors.
Average daily like‑for‑like revenue in Great Britain increased by 0.4%
year-on-year, with strong growth in our manufacturing businesses, which
benefited from softer comparators, largely offset by a modest decline in our
distribution businesses, which represent a greater share of overall sales.
The UK economy began the year with stronger‑than‑expected growth but lost
momentum in the second quarter as the temporary boost from housing and exports
faded and wider uncertainties weighed on confidence. Although the construction
market initially showed signs of improvement, conditions weakened from late Q2
and remained subdued into the second half, with the Autumn budget further
dampening consumer sentiment. Overall, RMI demand has remained soft,
particularly in London and the Southeast, which accounted for 60% of Grafton's
Great Britain revenue in the year reflecting persistent weakness in household
confidence and finances. With housing starts in London at just 6,000 units in
2025, the weakest level in over 40 years, muted new‑build activity
translated into lower transaction volumes and, consequently, softer RMI
demand. The recovery in housebuilding has progressed more slowly than
anticipated, as persistent affordability challenges and ongoing macro-economic
uncertainty, continued to constrain sales momentum.
Despite subdued volumes and increasing competitive pressures, gross margin in
Great Britain increased by 120 basis points during the year, reflecting the
effectiveness of our commercial strategy and consistent margin progression
across all businesses. Targeted commercial actions, including securing
enhanced supplier support and, for example, introducing delivery charges in
Selco, more than offset significant cost pressures, particularly those arising
from higher labour and property‑related expenses. Towards the end of the
year, Selco initiated headline price cuts across 357 of its most frequently
purchased building materials to improve its value proposition which has been
well received by our customer base.
Although overheads increased year‑on‑year due to inflationary pressures
across the cost base, the increase was contained by our tight management of
costs. On a like‑for‑like basis, overheads rose by 1.8%, reflecting
cost‑reduction initiatives implemented across the businesses and strict
controls on discretionary expenditure.
Although still well below the returns we would expect in a normal market,
adjusted operating profit before property profit increased to £49.2m (2024:
£46.4m) and adjusted operating profit margin before property profit was 40
basis points higher at 6.4% as the improvement in gross margin more than
offset higher overheads.
Looking ahead to 2026, the near‑term outlook for the UK construction market
remains subdued following the marked loss of momentum in the latter part of
2025. While inflation is expected to moderate over the year and interest rates
are projected to remain supportive, overall growth in the construction market
is likely to be modest and weighted towards the second half. Despite current
softness in the market, significant pent‑up demand persists, with industry
volumes still well below historical norms. The medium‑term outlook remains
positive, underpinned by Government plans to materially increase new housing
delivery in response to population growth and an enduring supply shortfall.
Despite the difficult market environment in recent years, the Group has
continued to expand its branch network and invest in refurbishing existing
locations, while broadening our product range to better support customers. The
UK remains one of Europe's largest construction markets and a region where we
have a long track record of successful operations. We remain committed to
growing our presence there, pursuing new organic growth opportunities across
our existing businesses alongside potential acquisition targets.
Leyland SDM opened a new store on Tower Bridge Road in December 2025 and
successfully implemented a new ERP in the second half of the year positioning
the business to accelerate its investment in its digital offering for
customers.
Frank Elkins, appointed CEO of Selco and Great Britain Distribution in August
2024, assumed operational responsibility for all our businesses, including
manufacturing, in Great Britain from December 2025.
Northern Europe (18.6% of Group Revenue, 2024: 20.6%)
2025 2024 Constant Currency Change*
Restated
£'m £'m Change*
Revenue 469.7 469.3 0.1% (1.1%)
Adjusted operating profit 29.6 35.3 (16.2%) (17.2%)
Adjusted operating profit margin 6.3% 7.5% (120bps) -
*Change represents the movement between 2025 v 2024 and is based on unrounded
numbers
Our Northern Europe segment comprises our businesses in the Netherlands and
Finland. Our business in the Netherlands, which trades under the Isero and
Polvo brands across 121 branches, is the market leader in the distribution of
ironmongery, personal protective equipment ("PPE"), tools and fixings
products. IKH is a leading distributor, based in Finland, of workwear, PPE,
tools, and spare parts, with a number two market position in its core tools
and PPE segments.
Average daily like-for-like revenue declined by 0.5% in the year, with
moderate growth in the Netherlands more than offset by a pronounced decline in
Finland. Sales increased in the Netherlands, driven primarily by strong branch
sales and growth in national key accounts, in addition to increases in project
related sales and modest price increases of circa 1%. After a strong start to
the year, momentum in the Netherlands eased as several major construction
projects reached completion and the start of new projects was delayed. Sales
in Finland declined sharply due to persistently difficult market conditions,
unfavourable weather that reduced demand for seasonal products both at the
start and end of the year, and temporary operational issues that disrupted the
internal supply chain. These internal challenges gradually eased in the second
half of the year following decisive management actions.
The market in the Netherlands showed a strong start to 2025, supported by
continued signs of recovery; however, momentum slowed in the second half.
Despite robust growth in housing transaction volumes, the recovery in
annualised housing permits did not materialise, and housing completions in
2025 are expected to show a slight decline relative to 2024. Political
uncertainty, stemming from the collapse of the Dutch coalition government and
the inconclusive election outcome, continued to weigh on market activity in
2025. In Finland, the economy continues to experience ongoing weakness where
the government has implemented austerity measures to address its fiscal
deficit. Furthermore, the expected recovery of the construction sector failed
to materialise in 2025 as the market continued to decline.
Gross margin increased by 90 basis points in the year, reflecting strong
performances in both the Netherlands and Finland. In the Netherlands, active
commercial management actions more than offset the adverse mix effect of large
construction projects and key accounts accounting for a higher proportion of
sales, while gross margin in Finland improved primarily through optimisation
of rebates and procurement efficiencies.
Overheads increased year-on-year, reflecting general inflationary pressures,
wage inflation arising from industry‑wide collective labour agreements in
the Netherlands and strategic investment to strengthen the management team,
and one‑off costs associated with business improvement projects in Finland.
Adjusted operating profit declined to £29.6m (2024: £35.3m) and adjusted
operating profit margin was 120 basis points lower at 6.3% largely reflecting
lower sales in Finland and the continued impact of inflationary pressure on
overheads across both geographies.
Market conditions in the Netherlands are expected to recover gradually in 2026
after a relatively subdued second half of 2025. The formation of a new
minority coalition government is a positive development; however,
cross‑party support will be essential to advance the policy measures
required to support the construction sector in the near term. The medium-term
outlook in the Netherlands remains positive, supported by a strong project
pipeline among major construction contractors and a persistent structural
housing shortage, underpinned by continued population growth. The recovery of
the construction market in Finland is expected to be further delayed with any
meaningful improvement in volumes in 2026 likely to be weighted towards the
second half.
A new branch was opened in Harderwijk in 2025, advancing our strategy of
targeted expansion into the eastern Netherlands and complementing our strong
existing footprint across the west, central, north, and south of the country.
Good progress was achieved in the Netherlands in 2025 on a multi‑year
business improvement initiative focused on the operating model and supporting
systems, which, once fully implemented, will enhance customer experience,
increase efficiency, and reduce cost to serve.
Anu Ora was appointed as the new CEO of IKH with effect from June 2025. Anu is
a highly experienced business leader with extensive experience in the food
retail sector and the automotive parts distribution industry in Finland.
Anu, together with recent appointments strengthening the senior management
team, will be focused on further reinforcing and developing IKH's proposition
in the marketplace.
Iberia (8.5% of Group Revenue, 2024: 1.3%)
2025 2024*
£'m £'m
Revenue 212.9 29.7
Adjusted operating profit 13.6 0.3
Adjusted operating profit margin 6.4% 1.1%
*Salvador Escoda was acquired on 30 October 2024
Our Iberia segment comprises Salvador Escoda, a Spanish distributor of
Heating, Ventilation and Air Conditioning ("HVAC"), water, and renewable
energy solutions serving professional installers across the residential,
commercial, and industrial markets, which the Group acquired on 30 October
2024. The business offers a portfolio of more than 100,000 products focused on
the HVAC sector, over 90% of which are specialised technical installation
items serving installation companies, technicians and small distributors. The
business stands out for its extensive private‑label offering with
high‑quality own brands accounting for approximately 60% of sales in 2025.
Salvador Escoda's operations span 93 branches positioned across Spain,
supported by four key distribution centres located in Barcelona, Madrid,
Seville and Valencia. Although its network reaches most parts of the country,
Salvador Escoda has a particularly strong footprint in Spain's warmer regions,
including Catalonia, Valencia, Andalusia and Madrid underpinned by favourable
demand dynamics for energy efficient HVAC solutions.
Salvador Escoda reported revenue of £212.9m (2024: £29.7m) and delivered an
adjusted operating profit of £13.6m (2024: £0.3m) in 2025 representing an
adjusted operating profit margin of 6.4%. The year‑on‑year increase
reflects the benefit of an additional ten months of trading in 2025 compared
with the prior year. Trading to date, under the Group's ownership of the
business, has been in line with pre-acquisition expectations.
On a pro‑forma basis in comparison to prior year, average daily
like‑for‑like revenue increased by 6.1% compared with 2024, driven by
strong growth in the air conditioning, ventilation and refrigeration
categories, as well as generally favourable market conditions. Gross margin
declined slightly in comparison to prior year, primarily due to competitive
pressure across certain product categories and discounting to sell through
aged inventory. Overheads were higher, reflecting inflationary pressures, the
opening of new branches and additional recruitment to strengthen the
management team. Taking all factors together, adjusted operating profit for
2025 was higher than prior year, largely due to the improved sales
performance.
The Spanish economy delivered another year of strong expansion in 2025, with
GDP expected to grow by approximately 3%, driven by rapid population growth,
strong private investment, and continued strength in the tourism sector. The
Spanish construction market is forecast to continue its recovery momentum,
with growth of around 3-4% anticipated in both 2025 and 2026, supported by
sustained housing demand, substantial investment in renewable energy and
transport infrastructure, and the accelerating shift towards
energy‑efficient and sustainable building practices. The HVAC sector is set
for robust growth, driven by tighter energy‑efficiency regulations, rising
consumer focus on efficiency, the adoption of advanced technologies in
retrofit projects, and the impact of climate change increasing temperatures
across the Iberian Peninsula.
Salvador Escoda has been successfully integrated into the Group during its
first full year of ownership. A comprehensive due diligence process enabled a
well‑structured integration programme, which was positively embraced by
local management and strengthened through active collaboration with Group
functions and sister businesses. Despite navigating significant change in
2025, the business delivered a stronger trading performance, outperforming the
prior year on both a reported and pro forma basis. The investments made in
2025 to strengthen the management team have created a strong foundation for
the business to accelerate both organic and inorganic growth in the coming
years.
The Group continues to support the local management team in driving organic
growth, with new branches opened in Vic in Catalonia and Plasencia in
Extremadura in the year. We continued to advance our pipeline of acquisition
opportunities across the HVAC sector and adjacent sectors within the highly
attractive and fragmented Iberian market. This region provides a strong
platform for us to act both as a consolidator and a long‑term compounding
growth business, supporting our ambition to substantially scale our operations
over the next five years.
Effective from early January 2026, Mario Ballarín stepped into the role of
CEO for our Iberia business, where he will lead the advancement of the Group's
growth ambitions in the region. Mario brings extensive experience in driving
business performance, acquisitions, and integrations, gained during his time
at Bunzl plc, where he most recently served as Managing Director for South and
Eastern Europe, the Middle East, and the Nordics.
Financial Review
Revenue
Group revenue was up 10.4% to £2.52bn from £2.28bn in 2024. Group revenue in
the like-for-like business increased by 1.3% (£30.1m) on the prior year.
The growth in average daily like-for-like revenue was 1.7% compared to prior
year.
Incremental revenue from the Salvador Escoda acquisition, which was completed
in 2024, increased revenue by £180.1m. The HSS Hire Ireland acquisition,
which completed on 31 May 2025, increased revenue by £14.5m.
New branches opened in 2024 and 2025 in The Netherlands (five), Great Britain
(three) and Spain (two) contributed incremental revenue of £3.0m in 2025.
Business disposals and closed branches reduced revenue by £8.0m in 2025.
Currency translation of revenue in the euro denominated businesses to sterling
increased revenue by £17.6m as a stronger euro slightly increased the level
of reported results as compared to the prior year. The average Sterling/Euro
rate of exchange for the year ended 31 December 2025 was Stg85.68p compared to
Stg84.66p for the year ended 31 December 2024.
Adjusted Operating Profit
Adjusted operating profit of £190.2m was up from £177.5m last year, an
increase of £12.7m (7.1%). This result for the year included property profit
of £5.9m (2024: £4.0m) which relates to profit on property disposals of
£2.8m, a fair value gain of £1.0m on two investment properties in Ireland
and an additional fair value gain of £2.1m on one investment property in
Great Britain.
Adjusted operating profit before property profit of £184.3m was up from
£173.5m last year, an increase of 6.2%. The adjusted operating profit
margin before property profit declined by 30 basis points to 7.3%.
Net Finance Income and Expense
The net finance expense was £9.7m which compares to a net finance expense of
£0.1m for the year ended 31 December 2024. This incorporates an interest
charge of £15.2m (2024: £15.0m) on lease liabilities recognised under IFRS
16. Interest income on cash deposits amounted to £16.0m (2024: £23.4m).
Returns on deposits and account balances decreased in the full year and
reflected lower Bank of England and European Central Bank base rates compared
to the prior year and lower cash balances following share buybacks, the
Group's Spanish acquisition in 2024 and the acquisition of HSS Hire Ireland in
2025.
Interest payable on bank borrowings denominated in euro and US Private
Placement Senior Unsecured Notes was £8.5m (2024: £8.3m). This reflects a
combination of weaker sterling offset by lower interest rates payable on bank
debt as the European Central Bank rates reduced in 2025.
The net finance expense included a foreign exchange translation loss of £2.4m
which compares to a gain of £1.6m in the prior year. The average
sterling/euro rate of exchange for the year ended 31 December 2025 was
Stg85.68p (31 December 2024: Stg84.66p). The sterling/euro exchange rate at 31
December 2025 was Stg87.26p (31 December 2024: Stg82.92p).
Taxation
The income tax expense of £28.6m (2024: £30.5m) is equivalent to an
effective tax rate (before the exceptional profit on disposal) of 18.2% of
profit before tax (2024: 20.0%). The rate after including the exceptional
profit on disposal is lower at 17.3% (2024: 20.0%). The rate is lower than
anticipated at the start of the financial year and reflects the blend of the
Group's corporation tax on profits in the five countries where the Group
operates and a credit relating to updated estimates of amounts relating to
prior years.
Certain items of expenditure charged in arriving at profit before tax,
including depreciation on buildings, are not eligible for a tax deduction.
This factor increased the rate of tax payable on profits above the headline
rates.
Cash flow
Cash generated from operations for the year of £310.3m (2024: £298.3m) was
strong and benefitted from a reduction in working capital of £12.0m (2024:
reduction of £14.9m). Working capital and inventory is a critical component
of our customer proposition; maintaining high levels of stock availability is
a key focus for all Grafton's businesses. The reduction in working capital was
achieved without compromising availability.
Interest paid in the year amounted to £24.3m (2024: £22.5m) which included
interest of £15.2m on IFRS 16 lease liabilities (2024: £15.0m). Taxation
paid was £34.2m (2024: £29.0m). Cash flow from operations after the
payment of interest and taxation was £251.8m (2024: £246.8m).
The cash outflow on the dividend payment was £72.6m (2024: £73.2m) and
£56.6m (2024: £80.9m) was spent on the buyback of shares, excluding
transaction costs. The total cash outflow on the dividend payment and
buyback of shares was £129.2m (2024: £154.1m), excluding transaction costs.
Free cash flow of £168.3m (2024: £178.2m) was generated in the year which
represents a 88% conversion to cash of adjusted operating profit (2024:
100%). The definition of free cash flow is set out in the Alternative
Performance Measures but it can be seen that it includes the payment of
interest, lease costs, tax and replacement capital expenditure. Over the last
four years, the Group has generated £709m of free cash flow which is
equivalent to almost 40% of Grafton's market capitalisation as at 31 December
2025 and is a demonstration of the strength of the Group's businesses to turn
adjusted operating profit into free cash flow.
Capital Expenditure and Investment in Intangible Assets
The Group continued to maintain appropriate control over capital expenditure
which amounted to £37.0m (2024: £39.6m). There was also expenditure of
£9.2m (2024: £7.3m) on software that is classified as intangible assets.
Asset replacement capital expenditure of £21.5m (2024: £23.9m) compares to
the depreciation charge (before IFRS 16) on property, plant and equipment
("PP&E") of £47.1m (2024: £42.8m) and related principally to the
replacement of distribution vehicles, replacements/upgrades to plant and
machinery, roof repairs, hire assets, forklifts, racking and other assets
required to operate the Group's branch network.
The Group incurred development capital expenditure of £15.5m (2024: £15.7m)
on a range of organic development initiatives including new branches and
branch upgrades and extensions in Woodie's, Chadwicks and also in the
Netherlands.
The proceeds received from the disposal of PP&E, properties held for sale
and investment properties was £5.3m (2024: £5.7m). The amount spent on
capital expenditure and software development, net of the proceeds received on
asset disposals, was £40.9m (2024: £41.1m).
Pensions
The Group operates four legacy defined benefit schemes (one in the UK and
three in Ireland), all of which are now closed to future accrual. The
defined benefit pension schemes had an accounting surplus of £7.6m at the
year end, an improvement of £6.3m from a surplus of £1.3m at 31 December
2024.
The deficit on the UK scheme reduced by £5.5m to £3.3m and the surplus on
the schemes in Ireland increased by £0.7m to £11.6m.
There was a scheme deficit of £0.7m (31 December 2024: £0.8m) related to the
Netherlands business.
Net Debt/Cash
Net debt (including lease obligations) at 31 December 2025 was £123.4m (31
Dec 2024: £131.7m). Our net cash position, before recognising lease
liabilities, was £274.0m (31 Dec 2024: £272.1m).
The Group's policy is to maintain its investment grade credit rating while
investing in organic developments and acquisition opportunities. The Group's
dividend policy is to maintain cover at between two and three-times earnings.
Liquidity
Grafton was in a very strong financial position at the end of the year with
excellent liquidity, net cash before IFRS 16 lease liabilities and a robust
balance sheet.
The Group had liquidity of £776.8m at 31 December 2025 (31 December 2024:
£776.2m). As shown in the analysis of liquidity on page 45, accessible cash
and deposits amounted to £491.8m (31 December 2024: £505.4m) and there were
undrawn revolving bank facilities of £285.0m (31 December 2024: £270.8m).
At 31 December 2025, the Group had bilateral loan facilities of £337.6m
(2024: £328.3m) with four relationship banks, which all mature in August 2029
and debt obligations of £139.3m (31 December 2024: £132.3m) from the issue
of unsecured senior notes in the US Private Placement market.
The revolving loan facilities of £337.6m were originally put in place in
August 2022 for a term of five years to August 2027. The arrangements
included two one-year extension options exercisable at the discretion of the
Group and the four banks. The second one-year extension option was agreed in
July 2024 and these facilities are now repayable in August 2029. This is
sustainability linked debt funding and includes an interest rate incentive
connected to the achievement of carbon emissions, workforce diversity and
community support targets that are fully aligned to the Group's sustainability
strategy.
The average maturity of the committed bank facilities and unsecured senior
notes was 3.6 years at 31 December 2025 (2024: 4.6 years).
The Group's key financing objective continues to be to ensure that it has the
necessary liquidity and resources to support the short, medium and long-term
funding requirements of the business. These resources, together with strong
cash flow from operations, provide good liquidity and the capacity to fund
investment in working capital, routine capital expenditure and development
activity including acquisitions.
The Group's gross debt is drawn in euro and provides a hedge against exchange
rate risk on euro assets in the businesses in Ireland, the Netherlands,
Finland and Spain.
Shareholders' Equity
Shareholders' equity increased by £52.5m to £1.65bn at 31 December 2025 from
£1.60bn at 31 December 2024. Profit after tax increased shareholders'
equity by £136.6m. There was a gain of £40.5m on retranslation of euro
denominated net assets to sterling at the year-end rate of exchange.
Shareholders' equity was increased for a remeasurement gain (net of tax) of
£2.3m on the pension schemes and was reduced for dividends paid of £72.6m
and by £56.7m for the buyback of shares. Other changes increased equity by
£2.4m.
Return on Capital Employed
Adjusted Return on Capital Employed increased by 60 basis points to 10.9%
(2024: 10.3%).
Principal Risks and Uncertainties
The principal risks affecting the Group are set out on pages 33 to 38 of the
2025 Annual Report and Accounts.
Grafton Group plc
Group Condensed Income Statement
For the year ended 31 December 2025
Notes 2025 2024
£'000 £'000
Revenue 2 2,519,603 2,282,252
Operating costs (2,358,758) (2,133,626)
Property profit 3 5,881 3,999
Operating profit before exceptional items 166,726 152,625
Exceptional items 3,16 8,118 -
Operating profit 174,844 152,625
Finance expense 4 (26,313) (25,077)
Finance income 4 16,618 24,968
Profit before tax 165,149 152,516
Income tax expense 17 (28,581) (30,503)
Profit after tax for the financial year 136,568 122,013
Profit attributable to:
Owners of the Company 136,568 122,013
Earnings per ordinary share - basic 6 70.28p 60.89p
Earnings per ordinary share - diluted 6 70.23p 60.86p
Grafton Group plc
Group Condensed Statement of Comprehensive Income
For the year ended 31 December 2025
Notes 2025 2024
£'000 £'000
Profit after tax for the financial year 136,568 122,013
Other comprehensive income
Items that are or may be reclassified subsequently to the income statement
Currency translation effects:
- on foreign currency net investments 40,478 (33,099)
Fair value movement on cash flow hedges:
- effective portion of changes in fair value of cash flow hedges 3 -
40,481 (33,099)
Items that will not be reclassified to the income statement
Remeasurement gain on Group defined benefit pension schemes 15 3,321 5,439
Deferred tax on Group defined benefit pension schemes (1,006) (1,081)
2,315 4,358
Total other comprehensive income/(expense) 42,796 (28,741)
Total comprehensive income for the financial year 179,364 93,272
Total comprehensive income attributable to:
Owners of the Company 179,364 93,272
Total comprehensive income for the financial year 179,364 93,272
Grafton Group plc - Group Condensed Balance Sheet as at 31 December 2025
Notes 31 Dec 2025 31 Dec 2024
ASSETS £'000 £'000
Non-current assets
Goodwill 8 659,107 634,301
Intangible assets 9 131,285 134,911
Property, plant and equipment 10 371,756 367,354
Right-of-use asset 11 366,279 377,726
Investment properties 10 36,589 27,325
Deferred tax assets 17 7,320 7,453
Other receivables 12,16 10,210 -
Retirement benefit assets 15 11,574 10,932
Other financial assets 128 125
Total non-current assets 1,594,248 1,560,127
Current assets
Properties held for sale 10 2,581 763
Inventories 12 395,182 381,803
Trade and other receivables 12 332,467 300,020
Lease receivable - 98
Derivative financial instruments 13 3 -
Fixed-term cash deposits 13 100,000 150,000
Cash and cash equivalents (excluding bank overdrafts) 13 395,764 359,430
Total current assets 1,225,997 1,192,114
Total assets 2,820,245 2,752,241
EQUITY
Equity share capital 6,488 6,744
Share premium account 225,813 224,141
Capital redemption reserve 2,814 2,548
Revaluation reserve 11,861 12,037
Shares to be issued reserve 6,405 6,802
Cash flow hedge reserve (3) (6)
Foreign currency translation reserve 82,661 42,183
Retained earnings 1,316,572 1,305,649
Treasury shares held (3,897) (3,897)
Equity attributable to owners of the Parent 1,648,714 1,596,201
LIABILITIES
Non-current liabilities
Interest-bearing loans and borrowings 13 190,810 188,372
Lease liabilities 13 320,223 331,572
Provisions 12 12,769 13,042
Retirement benefit obligations 15 4,020 9,591
Deferred tax liabilities 17 62,879 62,040
Deferred consideration payable 16 - 599
Total non-current liabilities 590,701 605,216
Current liabilities
Interest-bearing loans and borrowings 13 30,929 49,000
Lease liabilities 13 77,185 72,156
Derivative financial instruments 13 - 5
Trade and other payables 12 448,388 401,142
Current income tax liabilities 18,840 20,138
Deferred consideration payable 16 1,398 3,537
Provisions 12 4,090 4,846
Total current liabilities 580,830 550,824
Total liabilities 1,171,531 1,156,040
Total equity and liabilities 2,820,245 2,752,241
Grafton Group plc - Group Condensed Cash Flow Statement
For the year ended 31 December 2025
Notes 31 Dec 2025 31 Dec 2024
£'000 £'000
Profit before taxation 165,149 152,516
Finance income 4 (16,618) (24,968)
Finance expense 4 26,313 25,077
Operating profit 174,844 152,625
Depreciation 10,11 125,842 112,416
Amortisation of intangible assets 9 25,115 22,322
Other non-cash items (2,406) 1,308
Share-based payments charge 813 1,162
Movement in provisions (2,649) (677)
Fair value gains recognised as property profit 3 (3,087) (3,191)
Loss on sale of property, plant and equipment 65 570
Property profit 3 (2,794) (808)
Profit on disposal of Group businesses, before disposal costs 16 (15,077) -
Profit/(loss) on derecognition of leases (3) 186
Contributions to pension schemes in excess of IAS 19 charge (2,389) (2,476)
Decrease in working capital 12 12,030 14,868
Cash generated from operations 310,304 298,305
Interest paid (24,284) (22,462)
Income taxes paid (34,193) (29,027)
Cash flows from operating activities 251,827 246,816
Investing activities
Inflows
Proceeds from sale of property, plant and equipment 1,716 1,273
Proceeds from sale of properties held for sale 3,557 4,120
Proceeds from sale of investment properties - 305
Proceeds from sale of Group businesses (net of cash disposed) 16 6,600 -
Maturity of fixed-term cash deposits 13 350,000 400,000
Interest received 17,407 23,441
379,280 429,139
Outflows
Acquisition of subsidiary undertakings (net of cash/overdraft acquired) 16 (20,862) (67,245)
Investment in fixed-term cash deposits 13 (300,000) (350,000)
Deferred acquisition consideration paid 16 (2,992) (2,145)
Investment in intangible assets - computer software 9 (9,226) (7,275)
Purchase of property, plant and equipment 10 (36,981) (39,571)
(370,061) (466,236)
Cash flows from investing activities 9,219 (37,097)
Financing activities
Inflows
Proceeds from the issue of share capital 1,682 283
1,682 283
Outflows
Repayment of borrowings (19,603) (8,156)
Dividends paid 5 (72,594) (73,190)
Treasury shares purchased (share buyback) 20 (56,725) (81,085)
Payment on lease liabilities (81,682) (71,640)
(230,604) (234,071)
Cash flows from financing activities (228,922) (233,788)
Net increase/(decrease) in cash and cash equivalents 32,124 (24,069)
Cash and cash equivalents at 1 January 351,055 383,939
Effect of exchange rate fluctuations on cash held 12,585 (8,815)
Cash and cash equivalents at the end of the year 395,764 351,055
Cash and cash equivalents are broken down as follows:
Cash at bank and short-term deposits 13 395,764 359,430
Bank overdrafts 13 - (8,375)
Cash and cash equivalents at the end of the year 395,764 351,055
Grafton Group plc
Group Condensed Statement of Changes in Equity
Equity share capital Share premium account Capital redemption reserve Revaluation reserve Shares to be issued reserve Cash flow hedge reserve Foreign currency translation reserve Retained earnings Treasury shares Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Year to 31 December 2025
At 1 January 2025 6,744 224,141 2,548 12,037 6,802 (6) 42,183 1,305,649 (3,897) 1,596,201
Profit after tax for the financial year - - - - - - - 136,568 - 136,568
Total other comprehensive income
Remeasurement gain on pensions (net of tax) - - - - - - - 2,315 - 2,315
Movement in cash flow hedge reserve (net of tax) - - - - - 3 - - - 3
Currency translation effect on foreign currency net investments - - - - - - 40,478 - - 40,478
Total other comprehensive income - - - - - 3 40,478 2,315 - 42,796
Total comprehensive income - - - - - 3 40,478 138,883 - 179,364
Transactions with owners of the Company recognised directly in equity
Dividends paid - - - - - - - (72,594) - (72,594)
Issue of Grafton Units 10 1,672 - - - - - - - 1,682
Purchase of treasury shares (Note 20) - - - - - - - - (56,725) (56,725)
Cancellation of treasury shares (Note 20) (266) - 266 - - - - (56,612) 56,612 -
Transfer from treasury shares (Note 20) - - - - - - - (113) 113 -
Share-based payments charge - - - - 813 - - - - 813
Tax on share-based payments - - - - (27) - - - - (27)
Transfer from shares to be issued reserve - - - - (1,183) - - 1,183 - -
Transfer from revaluation reserve - - - (176) - - - 176 - -
(256) 1,672 266 (176) (397) - - (127,960) - (126,851)
At 31 December 2025 6,488 225,813 2,814 11,861 6,405 (3) 82,661 1,316,572 (3,897) 1,648,714
Equity share capital Share premium account Capital redemption reserve Revaluation reserve Shares to be issued reserve Cash flow hedge reserve Foreign currency translation reserve Retained earnings Treasury shares Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Year to 31 December 2024
At 1 January 2024 7,094 223,861 2,195 12,186 6,562 (6) 75,282 1,332,992 (4,365) 1,655,801
Profit after tax for the financial year - - - - - - - 122,013 - 122,013
Total other comprehensive (expense)/income
Remeasurement gain on pensions (net of tax) - - - - - - - 4,358 - 4,358
Movement in cash flow hedge reserve (net of tax) - - - - - - - - - -
Currency translation effect on foreign currency net investments - - - - - - (33,099) - - (33,099)
Total other comprehensive expense - - - - - - (33,099) 4,358 - (28,741)
Total comprehensive income - - - - - - (33,099) 126,371 - 93,272
Transactions with owners of the Company recognised directly in equity
Dividends paid - - - - - - - (73,190) - (73,190)
Issue of Grafton Units 3 280 - - - - - - - 283
Purchase of treasury shares (Note 20) - - - - - - - - (81,085) (81,085)
Cancellation of treasury shares (Note 20) (353) - 353 - - - - (81,391) 81,391 -
Transfer from treasury shares (Note 20) - - - - - - - (162) 162 -
Share-based payments charge - - - - 1,162 - - - - 1,162
Tax on share-based payments - - - - (42) - - - - (42)
Transfer from shares to be issued reserve - - - - (880) - - 880 - -
Transfer from revaluation reserve - - - (149) - - - 149 - -
(350) 280 353 (149) 240 - - (153,714) 468 (152,872)
At 31 December 2024 6,744 224,141 2,548 12,037 6,802 (6) 42,183 1,305,649 (3,897) 1,596,201
Grafton Group plc
Notes to Final Results for the Year Ended 31 December 2025
1. General Information
Grafton Group plc ("Grafton" or "the Group") is a European multinational
distributor of construction related products and solutions comprising four
geographic segments serving the Island of Ireland, Great Britain, Northern
Europe and Iberia. In our home Irish market, we also operate the leading
home improvement retailer.
Trading from c. 470 branches with c. 10,000 colleagues, the Group's portfolio
of brands includes:
· Island of Ireland: Chadwicks, Woodie's and MacBlair
· Great Britain: Selco, Leyland SDM, TG Lynes, CPI EuroMix and
StairBox
· Northern Europe: Isero / Polvo (Netherlands) and IKH (Finland)
· Iberia: Salvador Escoda (Spain) and the broader Iberian
peninsula.
The Group's origins are in Ireland where it is headquartered, managed and
controlled. It has been a publicly quoted company since 1965 and its Units
(shares) are quoted on the London Stock Exchange where it is a constituent of
the FTSE 250 Index and the FTSE All-Share Index.
Basis of Preparation, Accounting Policies and Estimates
(a) Basis of Preparation and Accounting Policies
The financial information presented in this Final Results Announcement has
been extracted from the audited Annual Report and Accounts of Grafton Group
plc for the financial year ended 31 December 2025. The financial information
set out in this document does not constitute full statutory financial
statements for the financial years ended 31 December 2025, but it is derived
from same. The Final Results Announcement was approved by the Board of
Directors. The Annual Report and Accounts has been approved by the Board of
Directors and reported on by the auditors. The auditors' report was
unqualified. The Annual Report and Accounts for the year ended 31 December
2025 is available on the Group's website and will be filed with the Irish
Registrar of Companies in due course.
The consolidated financial information of the Group has been prepared in
accordance with the Transparency Rules of the Financial Conduct Authority
('FCA') and in accordance with International Financial Reporting Standards
('IFRS') issued by the International Accounting Standards Board ('IASB') as
adopted by the European Union ('EU'); and those parts of the Companies Act
2014 applicable to companies reporting under IFRS. They do not include all
the information and disclosures necessary for a complete set of financial
statements prepared in accordance with IFRS.
The financial information in this report has been prepared in accordance with
the Group's accounting policies. Full details of the accounting policies
adopted by the Group are contained in the consolidated financial statements
included in the Group's Annual Report and Accounts for the year ended 31
December 2025 which is available on the Group's website; www.graftonplc.com
(http://www.graftonplc.com) . Certain tables in the financial information may
not add precisely due to rounding.
Going Concern
The Group's net cash position, before recognising lease liabilities, was
£274.0m at 31 December 2025 (31 December 2024: £272.1m). Net debt including
lease obligations was £123.4m at 31 December 2025 (2024: £131.7m). The
Group had liquidity of £776.8m at 31 December 2025 (2024: £776.2m) of which
£491.8m (2024: £505.4m) was held in accessible cash and deposits and
£285.0m (2024: £270.8m) in undrawn revolving bank facilities.
No refinancing of debt is due until September 2028, the Group does not have a
leverage (net debt/EBITDA) covenant in its financing arrangements and its
assets (other than right-of-use assets) are unsecured.
Having made appropriate enquiries, the Directors have a reasonable expectation
that Grafton Group plc, and the Group as a whole, have adequate resources to
continue in operational existence for the foreseeable future, being at least
12 months from the date of approval of these financial statements. Having
reassessed the principal risks, as set out on pages 33 to 38 of the 2025
Annual Report and Accounts, and based on expected cash flows and the strong
liquidity position of the Group, the directors considered it appropriate to
adopt the going concern basis of accounting in preparing its financial
statements.
1. General Information (continued)
Basis of Preparation, Accounting Policies and Estimates (continued)
The consolidated financial information is presented in sterling. Items
included in the financial information of each of the Group's entities are
measured using its functional currency, being the currency of the primary
economic environment in which the entity operates, which is primarily euro and
sterling.
Climate Change
In preparing the financial information, the Directors have considered the
impact of climate change. These considerations did not have a material
impact on the financial reporting judgements and estimates in the current
period. The Group's analysis of the impact of climate change continues to
evolve with Grafton committed to delivering net zero carbon emissions no later
than the end of 2050.
(b) Critical accounting estimate and judgements
The preparation of the Group consolidated financial statements requires
management to make certain estimations, assumptions and judgements that affect
the reported profits, assets and liabilities. Estimates and underlying
assumptions are reviewed on an ongoing basis. Changes in accounting estimates
may be necessary if there are changes in the circumstances on which the
estimate was based or because of new information or more experience. Such
changes are recognised in the period in which the estimate is revised.
Information about significant areas of estimation and judgement that have the
most significant effect on the amounts recognised in the consolidated
financial statements are described in the respective notes to the consolidated
financial statements.
Revised Standards and Interpretations
Certain new and revised accounting standards and interpretations have been
issued. The Group intends to adopt the relevant new and revised standards when
they become effective and the Group's assessment of the impact of these
standards and interpretations is set out below:
The following Standards and Interpretations were effective for the Group for
periods beginning on or after 1 January 2025 but did not have a material
effect on the results or financial position of the Group:
· IAS 21 (Amendments) - The Effects of Changes in Foreign Exchange
Rates (Effective 1 January 2025)
The following Standards and Interpretations are effective for the Group for
periods beginning after 1 January 2026:
· IFRS 9 / IFRS 7 (Amendments) - Classification and Measurement of
Financial Instruments (Effective 1 January 2026)
· Annual improvements to IFRS - Volume 11 (effective 1 January 2026)
· Amendment to IFRS 9 and IFRS 7 - Contracts Referencing
Nature-dependent Electricity (effective 1 January 2026)
· IFRS 18 Presentation and Disclosure in Financial Statements
(Effective 1 January 2027)
The Group is currently assessing how the application of IFRS 18 Presentation
and Disclosure in Financial Statements, effective for accounting periods on or
after 1 January 2027, will affect the future presentation of the Group's
financial statements. While the adoption of IFRS 18 will not affect the totals
of the Group's assets, liabilities, equity, income and expenses, there will
likely be changes as to how the make-up of these principal categories are
presented both in the primary statements and the notes together with
additional disclosures around management performance measures. Otherwise, the
standards outlined above are not expected to result in a net material change
to the Group's financial statements.
2. Segmental Analysis
As outlined above, the Group has adopted a new reporting structure which
better reflects the Group's strategy. The operating segments are now aligned
with these geographical areas and align with how the Board now manages the
business, assesses performance and allocates capital and resources for organic
and inorganic growth. Comparative figures for 2024 have been restated to
reflect the new structure. The realignment has no impact on the Group's
consolidated financial results.
The amount of revenue and operating profit under the Group's operating
segments is shown below. Segment profit measure is operating profit before
exceptional items, amortisation of intangible assets arising on acquisitions
and acquisition related items.
2025 2024
Restated
£'000 £'000
Revenue
Island of Ireland 1,071,601 1,016,230
Great Britain 765,443 767,019
Northern Europe 469,698 469,339
Iberia 212,861 29,664
Total revenue 2,519,603 2,282,252
Segmental operating profit before intangible amortisation arising on
acquisitions and acquisition related items
Island of Ireland 110,968 107,518
Great Britain 49,232 46,359
Northern Europe 29,625 35,342
Iberia 13,592 322
203,417 189,541
Reconciliation to consolidated operating profit
Central activities* (19,107) (16,011)
184,310 173,530
Property profit 5,881 3,999
Operating profit before exceptional items, intangible amortisation arising on 190,191 177,529
acquisitions and acquisition related items
Exceptional items (Note 3) 8,118 -
Operating profit before intangible amortisation arising on acquisitions and 198,309 177,529
acquisition related items
Acquisition related items** (1,492) (4,633)
Amortisation of intangible assets arising on acquisitions (21,973) (20,271)
Operating profit 174,844 152,625
Finance expense (26,313) (25,077)
Finance income 16,618 24,968
Profit before tax 165,149 152,516
Income tax expense (28,581) (30,503)
Profit after tax for the financial year 136,568 122,013
*The increase reflects a combination of continued, planned investment in
strengthening capabilities and expertise within the Group's head office centre
of excellence to support the Group's strategic priorities as well as
inflationary pressures and higher employee incentive costs.
** Acquisition related items comprise deferred consideration payments relating
to the retention of former owners of businesses acquired, transaction costs
and expenses, professional fees for new and target acquisitions, adjustments
to previously estimated earn outs and customer relationships asset impairment
charges.
2. Segmental Analysis (continued)
The amount of revenue by geographic area is as follows:
2025 2024
£'000 £'000
Revenue*
Ireland** 953,778 901,342
United Kingdom 883,266 881,907
Netherlands 345,987 337,581
Finland 123,711 131,758
Spain 212,861 29,664
Total revenue 2,519,603 2,282,252
*Service revenue, which relates to plant and equipment hire and is recognised
over time, amounted to £26.8m for the year (2024: £12.3m).
** Grafton Group plc is domiciled in the Republic of Ireland and the revenues
from external customers in the Republic of Ireland were £953.8m (2024:
£901.3m).
31 Dec 2025 31 Dec 2024
Restated
£'000 £'000
Segment assets
Island of Ireland 845,536 749,660
Great Britain 795,344 824,929
Northern Europe 499,285 492,245
Iberia 165,291 157,467
2,305,456 2,224,301
Unallocated assets
Deferred tax assets 7,320 7,453
Retirement benefit assets 11,574 10,932
Other financial assets 128 125
Derivative financial instruments (current) 3 -
Fixed-term cash deposits 100,000 150,000
Cash and cash equivalents 395,764 359,430
Total assets 2,820,245 2,752,241
31 Dec 2025 31 Dec 2024
Restated
£'000 £'000
Segment liabilities
Island of Ireland 376,764 354,661
Great Britain 304,864 319,059
Northern Europe 131,636 110,469
Iberia 50,789 42,705
864,053 826,894
Unallocated liabilities
Interest bearing loans and borrowings (current and non-current) 221,739 237,372
Retirement benefit obligations 4,020 9,591
Deferred tax liabilities 62,879 62,040
Current income tax liabilities 18,840 20,138
Derivative financial instruments (current) - 5
Total liabilities 1,171,531 1,156,040
3. Property Profit & Exceptional Items
Property Profit
The property profit in 2025 of £5.9m relates to profit on property disposals
of £2.8m of one UK property, a fair value gain of £1.0m on two investment
properties in Ireland and an additional fair value gain of £2.1m on one
investment property in Great Britain.
The property profit in 2024 of £4.0m relates to profit on property disposals
of two Irish properties of £0.8m and a fair value gain of £0.5m on one
investment property in Ireland and an additional fair value gain of £2.7m on
one investment property in the UK.
Exceptional Items
On 13 February 2025, the Group entered into an agreement, which was subject to
approval from the Competition and Consumer Protection Commission (CCPC), for
the sale of the MFP business to a subsidiary of Wienerberger AG which mainly
operates through Pipelife Ireland Solutions Limited in Ireland. This
transaction completed on 31 May 2025. The net profit on the disposal of the
MFP business was £8.1m with further details outlined in Note 16.
4. Finance Expense and Finance Income
2025 2024
£'000 £'000
Finance expense
Interest on bank loans, US senior notes and overdrafts** 8,531 * 8,270 *
Interest on lease liabilities 15,209 * 15,026 *
Net finance cost on pension scheme obligations 32 305
Unwinding of discount applicable to deferred consideration payable (Note 16) 167 1,476
Foreign exchange loss 2,374 -
26,313 25,077
Finance income
Interest income on bank deposits (16,046) * (23,355) *
Unwinding of discount applicable to contingent consideration receivable (Note (572) -
16)
Foreign exchange gain - (1,613)
(16,618) (24,968)
Net finance expense 9,695 109
* Net bank and US senior note interest income of £7.5m (2024: £15.1m
interest income). Including interest on lease liabilities, net interest
expense was £7.7m (2024: £0.1m net interest income).
**Where overdrafts exist and there is a master netting agreement in place that
grants the Group the legal right to set-off and management has intention to
settle on a net basis with each bank, bank overdrafts are off-set against cash
and cash equivalents.
5. Dividends
The payment in 2025 of a final dividend for 2024 of 26.50 pence amounted to
£51.8m (2024: final dividend for 2023 of 26.00 pence amounted to £52.2m).
An interim dividend for 2025 of 10.75 pence per share was paid on 10 October
2025 in the amount of £20.8m.
A final dividend for 2025 of 27.00 pence per share will be paid on 21 May 2026
by Grafton Group plc to shareholders on the Register of Members at the close
of business on 24 April 2026 (the 'Record Date'). The ex-dividend date is 23
April 2026.
A liability in respect of the final dividend has not been recognised in the
balance sheet at 31 December 2025, as there was no present obligation to pay
the dividend at the end of the year.
6. Earnings per Share
The computation of basic, diluted and underlying earnings per share is set out
below:
Year ended 31 Year ended 31
Dec 2025 Dec 2024
£'000 £'000
Numerator for basic, adjusted and diluted earnings per share:
Profit after tax for the financial year 136,568 122,013
Numerator for basic and diluted earnings per share 136,568 122,013
Profit after tax for the financial year 136,568 122,013
Exceptional items (8,118) -
Amortisation of intangible assets arising on acquisitions 21,973 20,271
Tax relating to amortisation of intangible assets arising on acquisitions (4,942) (4,573)
Acquisition related items 1,492 4,633
Unwinding of discount applicable to deferred consideration payable 167 1,476
Unwinding of discount applicable to contingent consideration receivable (572) -
Numerator for adjusted earnings per share 146,568 143,820
Number of Grafton Units Number of Grafton Units
Denominator for basic and adjusted earnings per share:
Weighted average number of Grafton Units in issue 194,316,609 200,367,922
Dilutive effect of options and awards 149,206 101,676
Denominator for diluted earnings per share 194,465,815 200,469,598
Earnings per share (pence)
- Basic 70.28 60.89
- Diluted 70.23 60.86
Adjusted earnings per share (pence)*
- Basic 75.43 71.78
- Diluted 75.37 71.74
* The term "Adjusted" means before exceptional items, amortisation of
intangible assets arising on acquisitions, the impact of unwinding acquisition
related deferred consideration payable and receivable to present value and
acquisition related items.
7. Exchange Rates
The results and cash flows of subsidiaries with euro functional currencies
have been translated into sterling using the average exchange rate for the
year. The balance sheets of subsidiaries with euro functional currencies have
been translated into sterling at the rate of exchange ruling at the balance
sheet date.
The average sterling/euro rate of exchange for the year ended 31 December 2025
was Stg85.68p (2024: Stg84.66p). The sterling/euro exchange rate at 31
December 2025 was Stg87.26p (2024: Stg82.92p).
8. Goodwill
Goodwill is subject to impairment testing on an annual basis at 31 December
and additionally during the year if an indicator of impairment is considered
to exist.
At the 30 June 2025 interim reporting date, there were impairment indicators
in two of the Group's markets which prompted an impairment test to be carried
out on two of the former groups of CGUs - UK Distribution and Finland
Distribution. No impairments were noted.
The Group's operating segments and groups of Cash Generating Units ("CGUs")
were revised in 2025, where it has now been determined that there are four
operating segments: Island of Ireland, Great Britain, Iberia and Northern
Europe. There were impairment indicators in two of the former groups of CGUs -
UK Distribution and Finland Distribution at 30 September 2025, the point at
which goodwill was reallocated from the former UK Distribution group of CGUs
to the enlarged Great Britain group of CGUs and from the former Finland
Distribution group of CGUs to the enlarged Northern Europe CGU. This prompted
a further impairment test to be carried out. No impairments were noted.
The annual impairment test was completed as at 31 December 2025 to determine
the recoverable amounts of the revised groups of CGUs. No impairments were
noted.
The recoverable amount of each cash generating unit is determined based on
value-in-use calculations. The carrying value of each cash generating unit was
compared to its estimated value-in-use. There were no impairments during the
year (2024: £Nil).
Goodwill
£'000
Net Book Value
As at 1 January 2025 634,301
Arising on acquisition (Note 16) 8,405
Currency translation adjustment 16,401
As at 31 December 2025 659,107
9. Intangible Assets
Computer Software Trade Names Customer Relationships & Technology Total
£'000 £'000 £'000 £'000
Net Book Value
As at 1 January 2025 13,080 30,747 91,084 134,911
Additions 9,226 - - 9,226
Reclassification from property, plant and 1,716 - - 1,716
equipment (Note 10)
Arising on acquisition (Note 16) 16 1,514 3,616 5,146
Amortisation (3,142) (4,764) (17,209) (25,115)
Currency translation adjustment 499 1,275 3,627 5,401
As at 31 December 2025 21,395 28,772 81,118 131,285
The amortisation expense of £25.1m (2024: £22.3m) has been charged in
'operating costs' in the income statement. Amortisation of intangible assets
arising on acquisitions in prior periods amounted to £22.0m (2024: £20.3m).
10. Property, Plant and Equipment, Properties Held for Sale and Investment
Properties
Property, plant and equipment Properties Investment properties
held for sale
Net Book Value £'000 £'000 £'000
As at 1 January 2025 367,354 763 27,325
Additions 36,981 - -
Depreciation (47,098) - -
Disposals (1,781) (763) -
Disposal of Group businesses (Note 16) (1,400) - -
Reclassification to intangible assets* (Note 9) (1,716) - -
Reclassification from right-of-use asset (Note 11) - - 7,774
Transfers (729) 2,581 (1,852)
Fair value gains - - 3,087
Arising on acquisition (Note 16) 9,286 - -
Currency translation adjustment 10,859 - 255
As at 31 December 2025 371,756 2,581 36,589
* Computer software amounting to £1.7m have been transferred from Property,
Plant and Equipment to Intangible Assets to reflect the most appropriate asset
class for these assets.
11. Right-Of-Use Asset
Right-of-use asset
£'000
As at 1 January 2025 377,726
Additions* 25,888
Arising on acquisition (Note 16) 4,045
Reclassification to investment properties** (Note 10) (7,774)
Disposals (2,255)
Depreciation (78,744)
Remeasurements* 37,887
Currency translation adjustment 9,506
As at 31 December 2025 366,279
* Right-of-use asset additions relate to new lease contracts entered into
during the year and mainly arise due to leases entered into for new store
locations, new lease contracts agreed for existing stores and replacement
vehicle leases. Right-of-use asset remeasurements have mainly arisen due to
the finalisation of rent reviews and the reassessment of extension options
available to the Group on a number of property leases that will now be
exercised.
** Right-of-use assets amounting to £7.8m have been transferred from right-of
-use assets to investment properties to reflect the most appropriate asset
class for these assets (relate to right-of-use assets sublet to third parties
under operating leases).
12. Movement in Working Capital & Provisions
Movement in Working Capital
Trade Trade and other
and other receivables payables
Inventories Total
Current £'000 £'000 £'000 £'000
As at 1 January 2025 381,803 300,020 (401,142) 280,681
Currency translation adjustment 14,251 10,827 (14,485) 10,593
Interest accruals* - (789) 544 (245)
Arising on acquisition (Note 16) (605) 6,777 (5,648) 524
Disposal of Group businesses (Note 16) (1,313) (3,593) 3,605 (1,301)
Contingent consideration receivable - 1,039 - 1,039
(Note 16) - current
Working capital movement in 2025 1,046 18,186 (31,262) (12,030)
As at 31 December 2025 (current) 395,182 332,467 (448,388) 279,261
Contingent consideration receivable - 10,210 - 10,210
(Note 16) - non-current
As at 31 December 2025
(current and non-current) 395,182 342,677 (448,388) 289,471
* Interest accruals on long-term borrowings are included separately in other
payables as accrued interest is paid within 12 months.
The working capital movement for the year ended 31 December 2024 is shown
below:
Trade Trade and other
and other receivables payables
Inventories Total
£'000 £'000 £'000 £'000
Working capital movement in 2024 (28,574) 5,754 7,952 (14,868)
Provisions
Total
Provisions
£'000
As at 1 January 2025 17,888
Charged in year 3,639
Arising on acquisition (Note 16) 919
Utilised (691)
Released (2,854)
Paid during the year (2,743)
Currency translation adjustment 701
As at 31 December 2025 16,859
The total provisions of £16.9m (31 December 2024: £17.9m) are shown in the
Group balance sheet as (i) non-current liabilities of £12.8m (31 December
2024: £13.0m) and (ii) current liabilities of £4.1m (31 December 2024:
£4.9m).
13. Interest-Bearing Loans, Borrowings and Net Debt
31 Dec 31 Dec
2025 2024
£'000 £'000
Interest-bearing loans and borrowings
Bank overdrafts* - 8,375
Bank credit facilities (current)* 30,929 40,625
Bank loans (non-current) 51,499 56,053
US senior notes (non-current) 139,311 132,319
Total interest-bearing loans and borrowings 221,739 237,372
Leases
Included in non-current liabilities 320,223 331,572
Included in current liabilities 77,185 72,156
Total leases 397,408 403,728
Derivatives
Included in current assets (3) -
Included in current liabilities - 5
Total derivatives (3) 5
Fixed-term cash deposits**
Included in current assets (100,000) (150,000)
Total fixed-term cash deposits (100,000) (150,000)
Cash at bank and short-term deposits*** (395,764) (359,430)
Net debt 123,380 131,675
Net (cash) before leases (274,028) (272,053)
*The bank overdrafts of £Nil (31 December 2024: £8.4m) and euro bank credit
facilities of £30.9m at 31 December 2024 (31 December 2024: £40.6m) relate
to short-term debt in Salvador Escoda in Spain which the Group acquired on 30
October 2024. The Salvador Escoda bank credit facilities of £30.9m include
debt related to discounting effects on debtors and credit facilities covering
import lines of credit with five Spanish banking partners. The bank overdraft
was cleared in 2025.
** Fixed-term cash deposits have a maturity date greater than three months at
inception but less than three months at the balance sheet date.
*** At 31 December 2024, cash and cash equivalents in the cash flow statement
of £351.1m consisted of cash at bank and short-term deposits of £359.4m, net
of bank overdrafts of £8.4m.
At 31 December 2025, the Group had bilateral loan facilities of £337.6m
(2024: £328.3m) with four relationship banks, which all mature in August
2029.
The revolving loan facilities of £337.6m were put in place in August 2022 for
a term of five years to August 2027. The arrangements included two one-year
extension options exercisable at the discretion of the Group and the four
banks. The second one-year extension option was agreed in July 2024 and these
facilities are now repayable in August 2029. This is sustainability linked
debt funding and includes an incentive connected to the achievement of carbon
emissions, workforce diversity and community support targets that are fully
aligned to the Group's sustainability strategy.
The following table shows the fair value of financial assets and liabilities,
all of which are within level 2 of the fair value hierarchy. It does not
include fair value information for financial assets and liabilities not
measured at fair value if the carrying amount is a reasonable approximation of
fair value.
13. Interest-Bearing Loans, Borrowings and Net Debt (continued)
31 Dec 2024 31 Dec
2025 2024
£'000 £'000
Assets/(liabilities) measured and recognised at fair value
Designated as hedging instruments
Other derivative instruments 3 (5)
Fair value measurement of liabilities carried at amortised cost
US senior notes (133,644) (125,397)
The following table shows the fair value of financial assets and liabilities,
all of which are within level 3 of the fair value hierarchy.
31 Dec 31 Dec
2025 2024
£'000 £'000
Assets/(liabilities) measured and recognised at fair value
Contingent consideration receivable on disposal of businesses (Note 16) 12,251 -
Deferred consideration payable on acquisition of businesses (Note 16) (1,398) (4,136)
The fair value of financial assets and liabilities recognised at amortised
cost
It is considered that the carrying amounts of other financial assets and
liabilities including trade payables (excluding deferred consideration), cash
and cash equivalents, fixed-term deposits, trade receivables and bank loans,
which are recognised at amortised cost in the financial information
approximate to fair value. The fixed rate US senior notes denominated in
euro are disclosed above at fair value and reflect the differential between
the fixed interest rates on these notes and market rates at 31 December 2025.
Financial assets and liabilities carried at fair value
The Group's financial assets and liabilities which are carried at fair value
are classified as Level 2 in the fair value hierarchy and deferred
consideration payable and receivable is classified as Level 3. There have been
no transfers between levels in the current period. Fair value measurements are
categorised into different levels in the fair value hierarchy based on the
inputs to valuation techniques used.
The fair values of other derivatives are calculated as the present value of
the estimated future cash flows based on the terms and maturity of each
contract and using forward currency rates and market interest rates as
applicable for a similar instrument at the measurement date.
Fair values reflect the credit risk of the instrument and include adjustments
to take account of the credit risk of the Group entity and counterparty where
appropriate.
The fair value of deferred consideration payable is calculated assuming a
probability of payout, which will be based on achievement of EBITA/EBITDA
targets and discounted to present value using market derived discount rates.
The fair value assumes achievement of targets but is sensitive to change in
the assessed probability of achieving targets.
Contingent consideration receivable relates to a variable earn-out component
following the disposal of a Group business and is based on future purchases by
the Group. The fair value is calculated based on historical trading volumes
and is discounted to present value using market derived discount rates. The
fair value is sensitive to change in the future trading volumes with the
former Group business. The derived discount rates and future trading volumes
are significant unobservable inputs.
14. Reconciliation of Net Cash Flow to Movement in Net (Debt)
31 Dec 2025 31 Dec 2024
£'000 £'000
Net increase/(decrease) in cash and cash equivalents 32,124 (24,069)
Net movement in fixed-term cash deposits (50,000) (50,000)
Net movement in derivative financial instruments 8 -
Bank loans acquired with subsidiaries - (42,330)
Lease liabilities acquired (Note 16) (4,045) (24,413)
Movement in debt and lease financing 40,250 49,531
Change in net (debt) resulting from cash flows 18,337 (91,281)
Currency translation adjustment (10,042) 8,869
Movement in net (debt) in the period 8,295 (82,412)
Net (debt) at 1 January (131,675) (49,263)
Net (debt) at end of the period (123,380) (131,675)
15. Retirement Benefits
The principal financial assumptions employed in the valuation of the Group's
defined benefit scheme liabilities for the current year and prior year were as
follows:
Irish Schemes UK Schemes
At 31 Dec 2025 At 31 Dec 2024 At 31 Dec 2025 At 31 Dec 2024
Rate of increase in salaries* N/A N/A N/A N/A
Rate of increase of pensions in payment - - 2.70% 3.00%
Discount rate 4.20% 3.45% 5.50% 5.50%
Inflation rate increase 1.80% 1.85% 2.30%/2.80% ** 2.60%/3.10% **
* Following the closure to accrual of the Irish schemes and the UK scheme,
benefits in those schemes are no longer linked to final salary. Instead,
accrued benefits up to the date of closure revalue in line with inflation,
subject to certain caps.
** The inflation assumption shown for the UK is based on both the Consumer
Price Index (CPI) and the Retail Price Index (RPI)
15. Retirement Benefits (continued)
The following table provides a reconciliation of the scheme assets (at bid
value) and the actuarial value of scheme liabilities:
Assets Liabilities Net asset/(deficit)
Year to Year to 31 Dec 2024 Year to Year to 31 Dec Year to Year to 31 Dec
31 Dec 31 Dec 2024 31 Dec 2024
2025 2025 2025
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 178,375 195,104 (177,034) (200,931) 1,341 (5,827)
Interest income on plan assets 7,827 7,151 - - 7,827 7,151
Contributions by employer 2,629 2,604 - - 2,629 2,604
Benefit payments (12,653) (11,976) 12,653 11,976 - -
Administration costs (194) (37) - - (194) (37)
Other long-term benefit (expense) - - (46) (91) (46) (91)
Interest cost on scheme liabilities - - (7,859) (7,456) (7,859) (7,456)
Remeasurements
Actuarial (loss)/gains from:
-experience variations - - (1,095) 1,369 (1,095) 1,369
-financial assumptions - - 10,495 14,637 10,495 14,637
-demographic assumptions - - 331 (814) 331 (814)
Return on plan assets excluding interest income (6,410) (9,753) - - (6,410) (9,753)
Translation adjustment 4,746 (4,718) (4,211) 4,276 535 (442)
At 31 December 174,320 178,375 (166,766) (177,034) 7,554 1,341
Related deferred tax (net) (436) 1,037
Net pension asset 7,118 2,378
The net pension scheme asset before tax of £7.6m (31 December 2024: £1.3m)
is shown in the Group balance sheet as (i) retirement benefit obligations
(non-current liabilities) of £4.0m (31 December 2024: £9.6m) and (ii)
retirement benefit assets (non-current assets) of £11.6m (31 December 2024:
£10.9m).
At 31 December 2025, the retirement benefit asset of £11.6m (Dec 2024:
£10.9m) relates to three schemes in Ireland. The surplus has been recognised
in accordance with IFRIC 14 'The Limit on a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction' as it has been determined that the
Group has an unconditional right to a refund of the surplus assets if the
schemes are run off until the last member has left the scheme. The retirement
benefit obligation of £4.0m (Dec 2024: £9.6m) relates to one scheme in the
UK (£3.3m, Dec 2024: £8.8m) and one scheme in the Netherlands (£0.7m, Dec
2024: £0.8m).
The gain on plan assets was £1.4m (31 December 2024: loss on plan assets of
£2.6m).
16. Acquisitions, Acquisition Related Liabilities & Disposal of
Group Businesses
Acquisitions
On 31 May 2025, the Group acquired 100% of the issued share capital of HSS
Hire Ireland Limited ("HSS Hire Ireland") from HSS Hire Group. HSS Hire
Ireland is a tool and equipment hire specialist operating from four branches
and four customer distribution centres in the Republic of Ireland, offering an
extensive range of conventional hire products as well as specialist equipment
with a particular focus on powered access. Grafton plans to operate the HSS
Hire Ireland business as part of Chadwicks, its market-leading distribution
business in the Republic of Ireland. This transaction is in line with our
strategy to strengthen our market positions in existing and adjacent markets
and broaden the offering of our Chadwicks business. This acquisition is
incorporated in the Island of Ireland segment.
16. Acquisitions, Acquisition Related Liabilities & Disposal of
Group Businesses (continued)
The fair value of assets and liabilities acquired in 2025, and adjustments to
provisional fair value of assets and liabilities from previous acquisitions,
are set out below:
HSS Other* Total
£'000 £'000 £'000
Property, plant and equipment 9,286 - 9,286
Right-of-use asset 4,045 - 4,045
Intangible assets - computer software 16 - 16
Intangible assets - trade names 1,514 - 1,514
Intangible assets - customer relationships 3,616 - 3,616
Inventories 162 (767) (605)
Trade and other receivables 6,777 - 6,777
Trade and other payables (5,648) - (5,648)
Provisions (753) (166) (919)
Lease liability (4,045) - (4,045)
Corporation tax liability (939) - (939)
Deferred tax liability (641) - (641)
Cash acquired 3,528 - 3,528
Net assets acquired 16,918 (933) 15,985
Goodwill 7,472 933 8,405
Consideration 24,390 - 24,390
Satisfied by:
Cash paid 24,390 - 24,390
Net cash outflow - arising on acquisitions
Cash consideration 24,390 - 24,390
Less: cash and cash equivalents acquired (3,528) - (3,528)
20,862 - 20,862
* There were adjustments totalling £0.9m made to provisional fair values in
the period relating to the acquisition of Salvador Escoda which completed in
the prior year.
The fair value of the net assets acquired have been determined on a
provisional basis as these have not yet been finally determined by the Group.
A measurement period adjustment of £1.7m was recorded to reduce the fair
value of property, plant and equipment. Goodwill on the acquisition reflects
the anticipated purchasing and operational synergies to be realised as part of
the enlarged Group. Goodwill is not deductible for tax purposes.
The gross contractual value of trade and other receivables as at the
acquisition date amounted to £7.1m. The fair value of these receivables is
£6.8m and is inclusive of a loss allowance of £0.3m.
Any adjustments to provisional fair value of assets and liabilities including
recognition of any newly identified assets and liabilities, will be made
within 12 months of the acquisition date. There were adjustments totalling
£0.9m made to provisional fair values in the period relating to the
acquisition of Salvador Escoda which completed in the prior year.
The acquisition contributed revenue of £14.5m and operating profit of £1.4m
for the period from the date of acquisition to 31 December 2025. If this
acquisition had occurred on 1 January 2025, it is estimated that it would have
contributed revenue of £26.5m and adjusted operating profit of £2.9m in the
period.
The Group incurred acquisition costs of £1.3m in 2025 (2024: £3.0m),
relating to actual and target acquisitions, which are included in operating
costs in the Group Income Statement.
16. Acquisitions, Acquisition Related Liabilities & Disposal of
Group Businesses (continued)
Acquisition Related Liabilities
The following table shows the analysis of deferred consideration payable on
previous acquisitions which remain payable at 31 December 2025:
Deferred Consideration
Payable
£'000
As at 1 January 2025 (4,136)
Currency translation adjustment (87)
Deferred acquisition consideration paid in the period 2,992
Unwinding of discount applicable to deferred consideration payable (Note 4) (167)
As at 31 December 2025 (1,398)
Split of deferred consideration payable £'000
Current (1,398)
(1,398)
Disposal of Group Businesses
On 31 May 2025, the Group disposed of MFP Sales Limited, the Irish-based
manufacturer of PVC drainage and roofline products, to Wienerberger AG which
mainly operates through Pipelife Ireland Solutions Limited. As a result, the
net assets of the Group increased by £8.1m representing an overall profit on
disposal after costs of disposal. The profit on the disposal reflects the cash
consideration received of £9.2m and deferred cash receivable of £11.2m
offset by the net book value of the assets being disposed of £5.4m and
disposal costs of £7.0m.
Contingent consideration receivable relates to a variable earn-out component
and is based on future purchases by the Group. The fair value is calculated
based on historical trading volumes and is discounted to present value using
market derived discount rates. The fair value is sensitive to change in the
future trading volumes with the former Group business.
The disposal of the business does not meet the definition of a discontinued
operation and therefore is not disclosed as such. The consolidated results
of 2025 include five months of operating profit from the MFP business
amounting to £1.0m (Year to 31 December 2024: £3.8m).
The carrying value of assets and liabilities disposed in 2025 are set out
below:
Total
£'000
Property, plant and equipment 1,400
Inventories 1,313
Trade and other receivables 3,593
Trade and other payables (3,605)
Corporation tax asset 118
Deferred tax liability (47)
Cash disposed 2,588
Net assets disposed 5,360
Cash consideration received (9,188)
Contingent consideration receivable (11,249)
Profit on disposal of Group businesses, before disposal costs (15,077)
Amounts recognised in the year within Exceptional Items
Gross profit on disposal of Group businesses 15,077
Disposal costs* (6,959)
8,118
* Disposal costs include redundancy and closure costs together with
professional and legal fees related to the divestment of the business.
16. Acquisitions, Acquisition Related Liabilities & Disposal of
Group Businesses (continued)
Net cash inflow - arising on disposal
Cash consideration received 9,188
Less: cash and cash equivalents disposed (2,588)
6,600
The following table shows the analysis of contingent consideration receivable
on the disposal of businesses, which is disclosed in trade and other
receivables:
Contingent
Consideration
Receivable
£'000
As at 1 January 2025 -
Deferred receivable recognised on disposal of Group businesses 11,249
Currency translation adjustment 430
Deferred consideration received in the period -
Unwinding of discount applicable to contingent consideration receivable (Note 572
4)
As at 31 December 2025 12,251
Split of contingent consideration receivable £'000
Non-current 10,210
Current 2,041
12,251
17. Taxation
The income tax expense of £28.6m (2024: £30.5m) is equivalent to an
effective tax rate (before the exceptional profit on disposal) of 18.2% on
profit before tax from continuing operations (2024: 20.0%). The rate after
including the exceptional profit on disposal is lower at 17.3% (2024:
20.0%). This is a blended rate of corporation tax on profits in the five
jurisdictions where the Group operates. The decrease in the effective rate
reflects a higher proportion of profit in Ireland which is taxed at 15.0%,
including the Pillar Two top-up tax, and a credit relating to updated
estimates of amounts relating to prior years.
Certain items of expenditure charged in arriving at profit before tax,
including depreciation on buildings, are not eligible for a tax deduction.
This factor increased the rate of tax payable on profits above the headline
rates that apply in the UK, Ireland, the Netherlands, Finland and Spain.
The liability shown for current taxation includes a liability for tax
uncertainties and is based on the Directors' estimate of (i) the most likely
amount; or (ii) the expected value of the probable outflow of economic
resources that will be required. As with all estimates, the actual outcome may
be different to the current estimate.
Accounting estimates and judgements
Management is required to make judgements and estimates in relation to
taxation provisions and exposures. In the ordinary course of business, the
Group is party to transactions for which the ultimate tax determination may be
uncertain. As the Group is subject to taxation in a number of jurisdictions,
an open dialogue is maintained with Revenue Authorities with a view to the
timely agreement of tax returns. The amounts provided/recognised for tax are
based on management's estimate having taken appropriate professional advice.
If the final determination of these matters is different from the amounts that
were initially recorded such differences could materially impact the income
tax and deferred tax liabilities and assets in the period in which the
determination was made.
17. Taxation (continued)
Pillar Two - Global Minimum Top-Up Tax
The Group is subject to the global minimum top‐up tax under Pillar Two tax
legislation. Pillar Two legislation has been enacted or substantively enacted
in Ireland and several other jurisdictions in which the Group operates
effective from 1 January 2024. Under the legislation, the Group is liable to
pay a top‐up tax for the difference between the Pillar Two effective tax
rate per jurisdiction and the 15% minimum rate. Specific adjustments envisaged
in the Pillar Two legislation can give rise to different effective tax rates
compared to those calculated for IFRS purposes. The Group has applied a
temporary mandatory relief from deferred tax accounting for the impacts of the
top‐up tax and will account for it as a current tax when it is incurred.
The Group has recognised a Pillar Two current tax expense of £1.6m for 2025
(2024: £0.5m) and expects to avail of transitional safe harbour reliefs in
respect of a number of its jurisdictions for the financial year. The Group
will continue to monitor changes in law and guidance as they apply to Grafton
Group plc and its subsidiaries.
Deferred tax
At 31 December 2025, the deferred tax asset was £7.3m (31 December 2024:
£7.5m) and the deferred tax liability was £62.9m (31 December 2024:
£62.0m). At 31 December 2025, there were unrecognised deferred tax assets in
relation to capital losses of £0.6m (31 December 2024: £0.7m), trading
losses of £1.6m (31 December 2024: £1.3m) and deductible temporary
differences of £5.5m (31 December 2024: £5.2m).
Deferred tax assets were not recognised in respect of certain capital losses
as they can only be recovered against certain classes of taxable profits. The
Directors believe that it is not probable that such profits will arise in the
foreseeable future. The trading losses arose in entities that have incurred
historic losses and the Directors believe that it is not probable there will
be sufficient taxable profits in the particular entities against which they
can be utilised. Separately, the Directors believe that it is not probable
the deductible temporary differences will be utilised.
18. Related Party Transactions
There were no changes in related parties from those described in the Annual
Report and Accounts for the year ended 31 December 2024 that materially
affected the financial position or the performance of the Group during the
year ended 31 December 2025.
19. Grafton Group plc Long Term Incentive Plan (LTIP)
LTIP awards were made over 843,932 Grafton Units on 19 March 2025 (March 2024:
637,662). The fair value of the awards of £5.4m (March 2024: £4.6m), which
are subject to vesting conditions, will be charged to the income statement
over the vesting period of three years (March 2024: three years). The Annual
Report and Accounts for the year ended 31 December 2025 discloses details of
the LTIP scheme.
20. Share Buyback and Treasury Shares
Purchase of Treasury Transaction Costs Purchase of Treasury Cancellation of Treasury Transfer from Treasury Total Movement
Shares £'000 Shares * Shares Shares ** £'000
£'000 £'000 £'000 £'000
Share buybacks in 2022 142,609 372 142,981 (141,693) - 1,288
Share buybacks in 2023 159,143 315 159,458 (159,591) (687) (820)
Share buybacks in 2024 80,923 162 81,085 (81,391) (162) (468)
Total at 31 December 2024 382,675 849 383,524 (382,675) (849) -
Buyback programme 5 1,612 3 1,615 (1,612) (3) -
Buyback programme 6 30,000 60 30,060 (30,000) (60) -
Buyback programme 7 25,000 50 25,050 (25,000) (50) -
Year ended 31 December 2025 56,612 113 56,725 (56,612) (113) -
Total at 31 December 2025 439,287 962 440,249 (439,287) (962) -
* Including transaction costs.
** At 31 December 2025, the share buyback programmes and the LTIP purchase and
cancellation, were fully completed and the related transactions costs have
been transferred from treasury shares to retained earnings, totalling £1.0m.
Since the first buyback commenced on 9 May 2022 and up to 31 December 2025,
the Group has purchased a total of 49.28m ordinary shares which represents
20.5% of the issued share capital on the date of commencement. It acquired
them at an average price of £8.69 per share. Excluding shares re-purchased
to offset the impact of LTIPS awards vesting in 2022 and 2023, cash of
£428.3m has been returned to shareholders through all completed share
buybacks.
Share buyback programme 5 (completed 8 January 2025)
The Board announced a fifth programme, commencing 29 August 2024, to buy back
ordinary shares in the Company for an aggregate consideration of up to £30.0m
which was to end no later than 31 January 2025, subject to market conditions.
At 31 December 2024, the Group had purchased 2,810,108 shares in aggregate for
cancellation at a total cost of £28.4m, including transaction costs. These
shares were all cancelled by 31 December 2024. In January 2025, the Group
purchased a further 171,302 shares in aggregate for cancellation at a further
cost of £1.6m, including transaction costs. This programme fully completed on
8 January 2025.
Share buyback programme 6 (commenced 6 March 2025 and completed 8 July 2025)
The Board announced a sixth programme, commencing 6 March 2025, to buy back
ordinary shares in the Company for an aggregate consideration of up to £30.0m
which was to end no later than 31 August 2025, subject to market conditions.
At 31 December 2025, the Group had purchased 3,293,879 shares in aggregate for
cancellation at a total cost of £30.1m, including transaction costs. This
programme fully completed on 8 July 2025.
Share buyback programme 7 (commenced 4 September 2025 and completed 7 November
2025)
The Board announced a seventh programme, commencing 4 September 2025, to buy
back ordinary shares in the Company for an aggregate consideration of up to
£25.0m which will end no later than 31 January 2026, subject to market
conditions. At 31 December 2025, the Group had purchased 2,735,984 shares in
aggregate for cancellation at a total cost of £25.1m, including transaction
costs. This programme fully completed on 7 November 2025.
21. Issue of Shares
During the year, 210,351 Grafton Units were issued under the Group's Savings
Related Share Option Scheme (SAYE) to eligible UK employees.
In addition, 16,512 Grafton Units were issued under the 2021 Grafton Group
Long Term Incentive Plan (LTIP), on the vesting of Awards granted in 2022, as
the conditions for Total Shareholder Return ("TSR") targets were met. No
other Grafton Units were issued on the vesting of Awards granted in 2022, as
the performance conditions for Earnings Per Share ("EPS") targets were not
met.
22. Events after the Balance Sheet Date
The Board has today announced an eighth share buyback programme, commencing 5
March 2026, to buy back ordinary shares in the Company for an aggregate
consideration of up to £25.0m. This buyback programme will end no later than
31 August 2026, subject to market conditions.
There have been no other material events subsequent to 31 December 2025 that
would require adjustment to or disclosure in this report.
23. Board Approval
This announcement was approved by the Board of Grafton Group plc on 4 March
2026.
Supplementary Financial Information
Alternative Performance Measures
Certain financial information set out in this consolidated financial information is not defined under IFRS. These key Alternative Performance Measures ("APMs") represent additional measures in assessing performance and for reporting both internally and to shareholders and other external users. The Group believes that the presentation of these APMs provides useful supplemental information which, when viewed in conjunction with IFRS financial information, provides readers with a more meaningful understanding of the underlying financial and operating performance of the Group.
None of these APMs should be considered as an alternative to financial measures drawn up in accordance with IFRS.
The key Alternative Performance Measures ("APMs") of the Group are set out below. As amounts are reflected in £'m some non-material rounding differences may arise. Numbers that refer to 2024 are available in the 2024 Annual Report and Accounts.
The term "Adjusted" means before exceptional items, acquisition related items and unwinding of discount applicable to contingent consideration receivable. These items do not relate to the underlying operating performance of the business and therefore to enhance comparability between reporting periods and businesses, management do not take these items into account when assessing the underlying profitability of the Group.
Acquisition related items comprise deferred consideration payments relating to
the retention of former owners of businesses acquired, transaction costs and
expenses, professional fees for new and target acquisitions, adjustments to
previously estimated earn outs, impairment charges related to intangible
assets recognised on acquisition of businesses and goodwill impairment
charges. Customer relationships, technology and brands amortisation, the
impact of unwinding acquisition related deferred consideration to present
value and any associated tax are considered by management to form part of the
total spend on acquisitions or are non-cash items resulting from acquisitions
and therefore are also included as adjusting items.
APM Description
Adjusted operating profit/EBITA Profit before amortisation of intangible assets arising on acquisitions,
acquisition related items, exceptional items, net finance expense and income
tax expense.
Operating profit margin Profit before net finance expense and income tax expense as a percentage of
revenue.
Adjusted operating profit/EBITA before property profit Profit before profit on the disposal of Group properties, amortisation of
intangible assets arising on acquisitions, acquisition related items,
exceptional items, net finance expense and income tax expense.
Adjusted operating profit/EBITA margin before property profit Adjusted operating profit/EBITA before property profit as a percentage of
revenue.
Adjusted profit before tax Profit before amortisation of intangible assets arising on acquisitions,
acquisition related items, exceptional items and income tax expense. In the
current year the definition has been refined to include unwinding of discount
applicable to contingent consideration receivable without requiring
restatement for prior year as contingent consideration receivable arose during
the current year.
Adjusted profit after tax Profit before amortisation of intangible assets arising on acquisitions,
acquisition related items and exceptional items but after deducting the income
tax expense. In the current year the definition has been refined to include
unwinding of discount applicable to contingent consideration receivable
without requiring restatement for prior year as contingent consideration
receivable arose during the current year.
Average Capital Employed The average sum of total equity and net debt at each period end.
Capital Turn Revenue for the previous 12 months divided by average capital employed (where
capital employed is the sum of total equity and net debt/(cash) at each period
end).
Constant Currency Constant currency reporting is used by the Group to eliminate the
translational effect of foreign exchange on the Group's results. To arrive at
the constant currency change, the results for the prior period are
retranslated using the average exchange rates for the current period and
compared to the current period reported numbers.
Dividend Cover Group earnings per share divided by the total dividend per share for the
Group.
EBITDA Earnings before exceptional items, acquisition related items, net finance
expense, income tax expense, depreciation and intangible assets amortisation.
EBITDA (rolling 12 months) is EBITDA for the previous 12 months.
EBITDA Interest Cover EBITDA divided by net bank/loan note interest.
Free Cash Conversion Free cash flow as a percentage of adjusted operating profit.
Free Cash Flow Cash generated from operations less replacement capital expenditure (net of
disposal proceeds), less interest paid (net), income taxes paid, deferred
consideration paid and payment of lease liabilities and include contingent
consideration received on the disposal of Group businesses. In the current
year the definition has been refined to include contingent consideration
received without requiring restatement for prior year as deferred
consideration arose during the current year.
Gearing The Group net (cash)/debt divided by the total equity attributable to owners
of the Parent times 100, expressed as a percentage.
Liquidity The Group's accessible cash, including any undrawn revolving bank facilities.
Like-for-like revenue Changes in like-for-like revenue is a measure of underlying revenue
performance for a selected period. Branches contribute to like-for-like
revenue once they have been trading for more than twelve months.
Acquisitions contribute to like-for-like revenue once they have been part of
the Group for more than 12 months. When branches close, or where a business is
disposed of, revenue from the date of closure, for a period of 12 months, is
excluded from the prior period result.
Net (Debt)/Cash Net (debt)/cash comprises current and non-current interest-bearing loans and
borrowings, lease liabilities, fixed-term cash deposits, cash and cash
equivalents and current and non-current derivative financial instruments.
Adjusted Return on Capital Employed Adjusted operating profit divided by average capital employed (where capital
employed is the sum of total equity and net debt/(cash) at each period end)
times 100, expressed as a percentage.
Adjusted Earnings Per Share A measure of underlying profitability of the Group. Adjusted profit after tax
is divided by the weighted average number of Grafton Units in issue, excluding
treasury shares.
Adjusted Operating Profit/EBITA before Property
Profit
2025 2024
£'m £'m
Revenue 2,519.6 2,282.3
Operating profit 174.8 152.6
Property profit (5.9) (4.0)
Exceptional items (8.1) -
Acquisition related items 1.5 4.6
Amortisation of intangible assets arising on acquisitions 22.0 20.3
Adjusted operating profit/EBITA before property profit 184.3 173.5
Adjusted operating profit/EBITA margin before property profit 7.3% 7.6%
Operating Profit Margin
2025 2024
£'m £'m
Revenue 2,519.6 2,282.3
Operating profit 174.8 152.6
Operating profit margin 6.9% 6.7%
Adjusted Operating Profit/EBITA
2025 2024
£'m £'m
Revenue 2,519.6 2,282.3
Operating profit 174.8 152.6
Exceptional items (8.1) -
Acquisition related items 1.5 4.6
Amortisation of intangible assets arising on acquisitions 22.0 20.3
Adjusted operating profit/EBITA 190.2 177.5
Adjusted operating profit/EBITA margin 7.5% 7.8%
Adjusted Profit before Tax
2025 2024
£'m £'m
Profit before tax 165.1 152.5
Amortisation of intangible assets arising on acquisitions 22.0 20.3
Exceptional items (8.1) -
Acquisition related items 1.5 4.6
Unwinding of discount applicable to deferred consideration payable 0.2 1.5
Unwinding of discount applicable to contingent consideration receivable (0.6) -
Adjusted profit before tax 180.1 178.9
Adjusted Profit after Tax
2025 2024
£'m £'m
Profit after tax 136.6 122.0
Acquisition related items 1.5 4.6
Amortisation of intangible assets arising on acquisitions 22.0 20.3
Tax on amortisation of intangible assets arising on acquisitions (4.9) (4.6)
Exceptional items (8.1) -
Unwinding of discount applicable to deferred consideration payable 0.2 1.5
Unwinding of discount applicable to contingent consideration receivable (0.6) -
Adjusted profit after tax 146.6 143.8
Reconciliation of Profit to EBITDA
2025 2024
£'m £'m
Profit after tax 136.6 122.0
Exceptional items (8.1) -
Net finance expense/(income) 9.7 0.1
Income tax expense 28.6 30.5
Depreciation 125.8 112.4
Acquisition related items 1.5 4.6
Intangible asset amortisation 25.1 22.3
EBITDA 319.2 292.0
Net (Debt) 31 Dec
31 Dec 2024
2025 £'m
£'m
Cash and cash equivalents 395.8 359.4
Interest-bearing loans (non-current) (190.8) (188.4)
Interest-bearing loans (current) (30.9) (40.6)
Bank overdrafts - (8.4)
Lease liabilities (non-current) (320.2) (331.6)
Lease liabilities (current) (77.2) (72.2)
Derivatives 0.0 (0.0)
Fixed-term cash deposits 100.0 150.0
Net (Debt) (123.4) (131.7)
Net Debt to EBITDA
31 Dec 31 Dec
2025 2024
£'m £'m
EBITDA (rolling 12 months) 319.2 292.0
Net debt 123.4 131.7
Net debt to EBITDA - times 0. 39 0.45
EBITDA Interest Cover (including interest on lease
liabilities)
2025 2024
£'m £'m
EBITDA 319.2 292.0
Net bank/loan note interest expense/(income) 7.7 (0.1)
EBITDA interest cover - times 41.5 n/a
Free Cash Flow
2025 2024
£'m £'m
Cash generated from operations 310.3 298.3
Replacement capital expenditure (21.5) (23.9)
Proceeds on sale of property, plant and equipment 1.7 1.3
Proceeds on sale of held for sale/investment properties 3.6 4.4
Interest received 17.4 23.4
Interest paid (24.3) (22.5)
Payment of lease liabilities (81.7) (71.6)
Deferred acquisition consideration paid (3.0) (2.1)
Income taxes paid (34.2) (29.0)
Free cash flow 168.3 178.2
Adjusted Return on Capital Employed
31 Dec 31 Dec
2025 2024
£'m £'m
Operating profit 174.8 152.6
Exceptional items (8.1) -
Acquisition related items 1.5 4.6
Amortisation of intangible assets arising on acquisitions 22.0 20.3
Adjusted operating profit 190.2 177.5
Total equity - current period end 1,648.7 1,596.2
Net debt 123.4 131.7
Capital employed - current period end 1,772.1 1,727.9
Total equity - prior period end 1,596.2 1,655.8
Net debt/(cash) 131.7 49.3
Capital employed - prior period end 1,727.9 1,705.1
Average capital employed 1,750.0 1,716.5
Adjusted return on capital employed 10.9% 10.3%
Capital Turn
31 Dec 31 Dec
2025 2024
£'m £'m
Total revenue for previous 12 months 2,519.6 2,282.3
Average capital employed 1,750.0 1,716.5
Capital turn - times 1.4 1.3
Free Cash Conversion
2025 2024
£'m £'m
Free cash flow 168.3 178.2
Adjusted operating profit 190.2 177.5
Free cash conversion 88% 100%
Gearing 31 Dec 31 Dec
2025 2024
£'m £'m
Total equity attributable to owners of the Parent 1,648.7 1,596.2
Group net debt 123.4 131.7
Gearing 7.5% 8.2%
Dividend Cover 31 Dec 31 Dec
2025 2024
£'m £'m
Group adjusted EPS - basic (pence) 75.43 71.78
Group dividend (pence) 37.75 37.00
Group dividend cover - times 2.0 1.9
Liquidity 31 Dec 31 Dec
2025 2024
£'m £'m
Cash and cash equivalents 395.8 359.4
Fixed-term cash deposits 100.0 150.0
Less: cash held against letter of credit* (4.0) (4.0)
Accessible cash 491.8 505.4
Undrawn revolving bank facilities 285.0 270.8
Liquidity 776.8 776.2
*At 31 December 2025, cash of £4.0m (2024: £4.0m) was reserved to cover the
risk of an event of default by the Group on a letter of credit. This
arrangement can be replaced at any time.
Net Cash - before Leases 31 Dec 31 Dec
2025 2024
£'m £'m
Net (debt) - after leases (123.4) (131.7)
Lease liability 397.4 403.7
Net cash - before leases 274.0 272.1
Like-for-Like Revenue
2025 2024
£'m £'m
2024/2023 revenue 2,282.3 2,319.2
Organic growth 22.1 (52.5)
Organic growth - new branches 3.0 5.5
Total organic growth 25.1 (47.0)
Acquisitions 194.6 47.2
Foreign exchange 17.6 (37.1)
2025/2024 revenue 2,519.6 2,282.3
Like-for-like movement (organic growth, excluding new branches, as % of prior 1.0% (2.3%)
period revenue)
Cash Outflow on Dividends and Share Buyback, excluding transaction costs 2025 2024
£'m £'m
Dividend payment 72.6 73.2
Purchase of treasury shares (Note 20) 56.6 80.9
Cash outflow on dividends and share buyback, excluding transaction costs 129.2 154.1
Technical Guidance for 2026 Financial Year (unaudited)
§ Interest costs: c.£14m-£15m but dependent on rate of reduction of interest
rates by Central Banks together with impact of corporate development activity
§ Effective tax rate: Underlying tax rate of c.19.5% subject to acquisitions and
change in assumptions in respect of prior years
§ Depreciation and asset amortisation (pre IFRS 16): c.£50m
§ Depreciation and amortisation including right-of-use assets (leases) and
acquired intangibles: c.£160m
§ Gross replacement capital expenditure: c.£30m - £35m
§ Organic development capital expenditure: c.£40m - £45m
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