REG - Grafton Group PLC - Interim Results
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RNS Number : 9314X Grafton Group PLC 04 September 2025
Half Year Report
For the Six Months Ended 30 June 2025
Grafton Group plc
Half Year Report for the Six Months Ended 30 June 2025
Profit growth despite varied market backdrop
Grafton Group plc ("Grafton" or "the Group"), the international building
materials distributor and DIY retailer is pleased to announce its half year
results for the period ended 30 June 2025.
Financial Highlights
§ First half adjusted operating profit was in line with expectations, increasing
by 9.5 per cent to £91.0 million (H1 2024: £83.1 million) driven in large
part by the contribution of Salvador Escoda
§ Continued focus on margin management led to gross margin improvement of 60
basis points which offset the impact of increased overheads connected to
inflationary pressure and higher labour costs
§ Group operating margin maintained at 7.3% (H1 2024: 7.3%) with adjusted return
on capital employed of 10.9% at a similar level to prior year (H1 2024: 11.1%)
§ Adjusted earnings per share increased by 6.5% to 35.5p (H1 2024: 33.4p)
§ Strong balance sheet of £245.8 million net cash (before lease liabilities)
providing significant firepower to capitalise on organic and inorganic
development opportunities
§ Interim dividend increased by 2.4 per cent and a further £25.0 million share
buyback to commence, funded by strong free cash flow generated in 2025
§ Full year adjusted operating profit is expected to be broadly in line with
analysts' expectations (1) with the important Autumn trading period still to
come
Operational Highlights
§ Ongoing investment to strengthen and consolidate market positions
notwithstanding cyclical lows in activity in some of our geographies
§ Integration of Salvador Escoda is progressing well - positive progress in
pursuit of further organic and inorganic growth opportunities in Iberia, an
attractive and fragmented growth market
§ Strong performance in Ireland - acquisition of HSS Hire Ireland complements
Chadwicks' hire business, while Woodie's delivered a strong performance in the
first half
§ UK Distribution returned to profit growth for the first time since 2021
despite a challenging RMI market
§ Activity in the Netherlands remains relatively subdued and in Finland a
strengthened management team is in place to maximise opportunities when the
market recovers from historical lows
Total Operations (2) H1 2025 H1 2024 Change
Revenue £1,252m £1,137m 10.1%
Adjusted(3) operating profit £91.0m £83.1m 9.5%
Adjusted operating profit before property profit £91.0m £83.1m 9.5%
Adjusted operating profit margin before property profit 7.3% 7.3% -
Adjusted profit before tax £86.8m £84.1m 3.2%
Adjusted earnings per share 35.5p 33.4p 6.5%
Interim dividend 10.75p 10.5p 2.4%
Adjusted return on capital employed (ROCE) 10.9% 11.1% (20bps)
Net (debt) (including IFRS 16 leases) (£147.3m) (£46.8m) (£100.5m)
Net cash (before IFRS 16 leases) £245.8m £361.1m (£115.3m)
Statutory Results H1 2025 H1 2024 Change
Operating profit £87.7m £71.3m 22.9%
Profit before tax £83.5m £71.7m 16.5%
Basic earnings per share 35.1p 28.4p 23.3%
(1) Grafton compiled consensus analysts' forecasts for 2025 show adjusted
operating profit of circa £185.1 million and a range of £184.0 million to
£187.3 million.
(2) Supplementary financial information in relation to Alternative Performance
Measures (APMs) is set out on pages 39 to 44.
(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 39.
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Eric Born, Chief Executive Officer Commented:
"Grafton delivered a resilient performance in the first half, with revenue and
profit approximately 10 per cent higher than the same period last year, driven
by strong contributions from Spain and Ireland. Following the platform
acquisition of Salvador Escoda, non-UK markets now account for approximately
64 per cent of the Group's turnover. Given our ambition to be a leading
player in the European building materials distribution market and our exposure
to the growing and fragmented Iberian market, we would expect that
diversification trend to continue.
"Whilst we saw an easing of trading momentum towards the end of May and into
June, the start of the second half has seen a return to growth of Group
average daily like-for like revenue. Outlook for the full year varies by
market, but in the round, and with the important Autumn trading months to
come, we expect full year adjusted operating profit to be broadly in line with
analysts' expectations.
"More widely, after having returned over £403 million to shareholders by
buying back almost one fifth of the Group's shares since May 2022, our strong
balance sheet and liquidity leaves Grafton in an excellent position to execute
our growth strategy. Despite lingering cyclical lows, we continue to invest
in the UK, the Netherlands and Finland, given their strong recoverability
potential over time. In addition to organic development, we are actively
pursuing bolt-on and platform acquisitions in our chosen European markets."
Webcast and Conference Call Details
A copy of the results presentation document will be available at 7:00am on 4
September 2025 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 9:00am on 4 September 2025. 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/6889f5aadc8dab00139dd96a) .
Analysts will be invited to raise questions during the presentation. Should
investors wish to submit a question in advance, they can do so before 8.15am
on 4 September 2025 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.
Half Year Report for the Six Months Ended 30 June 2025
Business Review
Grafton's trading performance in the first half of 2025 reflects the
resilience of its diversified operations and the tangible benefits of
self-help actions, despite a continuing weak trading environment outside of
Ireland and Spain. Supported by our strong free cash flow generation and
balance sheet, we continue to invest to strengthen and consolidate our market
positions despite cyclical lows in activity in some of our geographies; this
positions the Group to leverage meaningful profitability growth when the
recovery gets underway. We believe there are many opportunities for
consolidation across our markets and remain focused on identifying and
executing acquisitions to reinforce and increase our presence and support our
long-term growth ambition to be a leading player in the European building
materials distribution market.
Following a slow start to the year, trading activity gained momentum as
weather conditions improved but then eased from mid-May and into June across
many of our businesses, coinciding with a spike in global uncertainties which
impacted customer confidence.
The Group's gross margin improved by 60 basis points in the first half,
reflecting a strong focus on margin management across all businesses. This was
underpinned by targeted pricing actions and a focus on delivering value for
our customers, procurement efficiencies, and successful negotiations for
enhanced supplier support.
Our management teams have taken decisive action to mitigate cost pressures by
optimising staff rosters and deployment, streamlining processes and
implementing efficiency initiatives. As a result, the improvement in gross
margin offset the impact of continuing cost pressures being felt across the
Group because of substantial increases in minimum wage levels, national
insurance in the UK and local collective labour agreements, alongside higher
property costs where rents are often linked to inflation benchmarks.
Adjusted operating profit increased to £91.0 million (2024: £83.1 million)
in the first half with the increase driven in large part by the contribution
from the recently acquired Salvador Escoda business in Spain.
We are pleased with the results of our Ireland Distribution and Retailing
businesses, both of which achieved good growth in profitability in the first
half of 2025. Chadwicks performed well in the first half, with revenue
higher as a result of materials price inflation and benefiting from its strong
market position, despite a broadly flat construction market. Profitability
improved largely due to higher sales and an improvement in gross margin more
than offsetting increased overheads. Woodie's delivered a robust performance,
supported by a continuous focus on strengthening its customer proposition and
resilient consumer spending in Ireland, to further grow profitability and
operating margin in the first half.
Our UK Distribution business returned to profit growth, from a cyclically low
base, in the first half despite a continuing weak RMI market backdrop,
especially in the greater London area. Targeted commercial actions improved
gross margin which more than offset significant cost pressures, particularly
from rising labour and property-related expenses.
In the Netherlands, construction activity remains subdued and profitability
declined in the first half largely due to inflationary pressure on overheads.
Good progress was made as part of a multi-year business improvement project
covering the operating model and supporting systems which will realise
benefits to customers, increase efficiencies and reduce the cost to serve.
In Spain, the integration of Salvador Escoda, which was acquired by the Group
on 30 October 2024, continues to progress well. The business is benefitting
from ongoing active collaboration with Group functions and sister businesses
to identify and execute opportunities to further build on its strong position
in the Spanish market. Trading in the first half, which was in line with
pre-acquisition expectations, contributed revenue of £104.2 million and
adjusted operating profit of £6.5 million. The Group continues to support
the local management team to drive organic growth while actively assessing
acquisition opportunities in the attractive and fragmented Iberian market,
where we have the opportunity to be both a consolidator and a compounder.
Our Finland Distribution business, IKH, reported a significant drop in
profitability in the first half. Trading activity declined largely due to
historically weak market conditions and adverse weather impacting seasonal
sales but there were also some temporary operational challenges which are
being actively addressed by the strengthened management team.
In our manufacturing segment, CPI EuroMix delivered strong profitability
growth, supported by higher volumes and improved fixed cost absorption.
Following a strong start to the year, driven by housebuilding customers
accelerating build in the early part of the year, momentum eased in the second
quarter. StairBox delivered improved profitability, despite RMI demand
remaining relatively weak, largely due to active management of input costs and
gross margin management together with tight cost control.
Returns to Shareholders
Dividends
The Board has declared an interim dividend of 10.75 pence per share, an
increase of 2.4 per cent on last year's interim dividend of 10.50 pence.
The interim dividend increase is below the rate of growth in earnings per
share in the first half, as it is the Board's intention to restore, in due
course, full year dividend cover to within the Board's medium-term target
range of between two and three-times adjusted earnings, supporting a
disciplined approach to capital allocation. In 2024, dividend cover was
slightly beneath this target range at 1.9 times and is likely to remain
slightly below this target in the current year.
The interim dividend for 2025 will be paid on 10 October 2025 by Grafton Group
plc to shareholders on the Register of Members at the close of business on 12
September 2025 (the 'Record Date'). The ex-dividend date is 11 September 2025.
In the half year, we had a cash outflow of £51.8 million on the payment of
the final dividend for 2024. Only dividends paid in the half year have been
charged to equity and no liability for the interim dividend has been
recognised at 30 June 2025 as there was no payment obligation at that date.
Share Buybacks
Reflecting its disciplined approach to capital deployment and supported by its
resilient balance sheet and strong cash conversion, Grafton has completed six
share buyback programmes since May 2022. This has returned cash of £403.3
million to shareholders through share buybacks reflecting the repurchase of
46.54 million ordinary shares at an average price of £8.67 per share. In
total, the Group has reduced its share capital by 19.4 per cent since the
first buyback programme commenced.
The sixth share buyback programme was launched on 6 March 2025 to buy back
ordinary shares in the Company for an aggregate consideration of up to £30
million and fulfilled a commitment in 2024 to use the free cash flow generated
that year to return capital to shareholders through a combination of dividend
payments and share buybacks. At 30 June 2025, the Group had purchased 3.00
million of ordinary shares in aggregate for cancellation at a total cost,
including transaction costs, of £27.1 million. However, due to timing, only
2.83 million ordinary shares were cancelled at 30 June 2025 and the remaining
0.17 million ordinary shares purchased for £1.8 million were cancelled in
July 2025. This programme completed on 8 July 2025 and involved the
repurchase of 3.29 million ordinary shares at an average share price of £9.11
per share.
Capital allocation decisions are regularly reviewed by the Board which is
committed to maintaining a disciplined approach to the deployment of
capital. Reflecting the Group's strong cash generation and our positive
conviction on Grafton's future prospects, a new share buyback programme for up
to £25.0 million is announced today commencing on 4 September 2025. The
highly cash generative nature of the Group enables us to return capital to
shareholders while continuing to actively pursue a robust and growing pipeline
of acquisition opportunities. The seventh share buyback programme will
commence today and end no later than 31 January 2026, subject to market
conditions.
Outlook
We expect to deliver full year adjusted operating profit broadly in line with
analysts' expectations recognising the important Autumn trading season has
still to come.
Positive trading conditions are expected to continue in Ireland and Spain;
however, we anticipate a continuation of similar trading conditions in our
other geographies in the second half of 2025. In our recent trading update
in early July, we noted an easing of trading momentum from mid-May into June
however since then and up to 24 August, we have seen a return to growth of
Group average daily like-for-like revenue.
Notwithstanding the impact of US imposed tariffs and any associated economic
consequences, the medium-term fundamentals remain positive for Grafton, with
structural housing shortages across all our geographies and an expected
recovery in RMI demand after several consecutive years of low levels of
investment by households.
In Ireland, the outlook for the economy in the second half remains cautiously
optimistic and construction activity in the second half of 2025 is expected to
mirror the trends observed in the first half. The prospects for growth in
the construction market remain positive, driven by strong government support
and the recently announced revised €112 billion National Development Plan
aimed at housing and infrastructure.
In the UK, we remain cautious on the near-term outlook for RMI demand. We
are well positioned to capitalise on a recovery in demand, though believe a
meaningful recovery of volumes is unlikely this year particularly as a result
of recent speculation around property taxes. However, higher household
savings and pent-up demand are expected to progressively support increased
investment in home improvement projects once confidence returns. The pace of
growth in new housebuilding in the UK, which indirectly affects RMI spend
through its linkage with housing transactions and which directly affects the
performance of CPI EuroMix, remains uncertain though structural
underinvestment makes this a key focal point for Government policy.
The anticipated recovery in construction activity in 2025 in the Netherlands
has yet to materialise in a meaningful way and both the timing and extent of
any activity upturn remains uncertain. Nevertheless, the medium-term outlook
is positive, supported by a robust project pipeline and a persistent housing
shortage underpinned by population growth.
Spain continues to be one of the fastest-growing economies in Europe.
Spain's construction sector is set to grow by 3-4 per cent in 2025,
supported by strong economic performance, increased Foreign Direct Investment
and a rise in building permits. The medium-term outlook for construction
remains positive, supported by ongoing population growth and a structural
housing shortage. The heating, ventilation, air conditioning ("HVAC")
segment is particularly well-positioned for growth due to regulatory pressure
to improve energy efficiency and the adoption of advanced technologies in
renovation and retrofit projects, in addition to climate change projects
linked to increasing temperatures on the Iberian Peninsula.
Indicators show that confidence in Finland's construction sector remain very
weak with the overall economy expected to see relatively little growth in 2025
before returning to modest levels of growth in 2026. The operational
improvements we are making in IKH, combined with its strong market position,
mean it is well positioned to benefit from the recovery in the wider economy.
Group average daily like-for-like revenue in the period from 1 July 2025 to 24
Aug 2025 was 2.3 per cent ahead of the same period last year, supported by
strong growth in Ireland and in our manufacturing businesses. UK
Distribution average daily like-for-like revenue was broadly flat and similar
to the trend in the first half whilst showing an improvement in comparison to
the weak trading activity experienced from mid-May to the end of June. Sales
in the Netherlands were impacted by the timing of regional holidays and weaker
project related sales. In Finland, performance continues to be below
expectations against the backdrop of a weak economy and management are taking
active steps to improve performance. Our manufacturing businesses performed
well in comparison to a weak trading period in the prior year.
On a pro-forma basis in comparison to prior year, average daily like-for-like
revenue in Spain increased by 9.4 per cent due to a strong air conditioning
summer campaign supported by hotter weather conditions.
Average Daily Like-for-Like Revenue Change in Constant Currency
H1 2025 1 July 2025 - 24 Aug 2025
Distribution
Ireland +3.7% +5.3%
UK +0.2% (0.2%)
Netherlands +2.8% (1.1%)
Finland (4.2%) (9.0%)
Retailing +7.6% +8.7%
Manufacturing +5.2% +11.9%
Total Group +2.4% +2.3%
Segmental Review
The Distribution businesses in Ireland, the UK, the Netherlands, Finland and
Spain contributed 84.5 per cent of Group revenue (2024: 83.7 per cent),
Retailing 11.0 per cent (2024: 11.5 per cent) and Manufacturing 4.5 per cent
(2024: 4.8 per cent).
Geographically, businesses in Ireland contributed 37.1 per cent (2024: 39.7
per cent) of Group revenue, UK 35.8 per cent (2024: 39.2 per cent), the
Netherlands 14.0 per cent (2024: 15.4 per cent), Finland 4.8 per cent (2024:
5.7 per cent) and Spain 8.3 per cent (2024: N/A).
All our businesses had one fewer trading day compared to the same period in
the prior year, except for the Netherlands, Spain and Finland, which each had
two fewer trading days.
Distribution Segment (84.5% of Group Revenue, 2024: 83.7%)
H1 2025 H1 2024
£'m £'m Change*
Revenue 1,058.0 951.8 11.2%
Adjusted operating profit before property profit 67.7 62.2 8.8%
Adjusted operating profit margin before property profit 6.4% 6.5% (10bps)
*Change represents the movement between 2025 v 2024 and is based on unrounded
numbers
Ireland Distribution (25.9% of Group Revenue, 2024: 27.9%)
H1 2025 H1 2024 Constant
Currency
£'m £'m Change* Change*
Revenue 323.8 317.2 2.1% 3.5%
Adjusted operating profit before property profit 31.5 29.7 6.0% 7.3%
Adjusted operating profit margin before property profit 9.7% 9.4% 30bps -
*Change represents the movement between 2025 v 2024 and is based on unrounded
numbers
Our Ireland Distribution business, Chadwicks, performed well in the first half
as trading activity continued to recover from poor weather in January. Average
daily like-for-like revenue was up 3.7 per cent in the first half, largely due
to materials price inflation of 3.5 per cent, which accelerated in the second
quarter.
The overall construction market in Ireland was broadly flat in the first half
of the year. While activity in the commercial sector has increased after
several years of decline, the necessary ramp up in housing supply has yet to
materialise. This is primarily due to continuing external challenges such as
planning delays, difficulties with utility connections, and labour shortages
that continue to constrain the pace of supply expansion.
Active commercial management including increased supplier support delivered an
improvement in gross margin which more than offset higher overheads and
inflationary pressure despite tight control of discretionary costs.
Adjusted operating profit before property profit increased to £31.5 million
(H1 2024: £29.7 million) and adjusted operating profit margin before property
profit was 30 basis points ahead of 2024 at 9.7 per cent.
The integration of HSS Hire Ireland, acquired on 31 May 2025, is progressing
well, with early trading in line with expectations. HSS Hire Ireland is a
tool and equipment hire specialist operating from four branches and four
customer distribution centres in the Republic of Ireland. 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 in Ireland and
enhancing its value proposition by broadening its offering to support its
long-term growth objectives.
The medium-term outlook for growth in the construction sector remains
positive, underpinned by strong policy continuity and renewed government
support to accelerate housing delivery. The recently announced revised
National Development Plan marks the largest capital investment in Ireland's
history, allocating €112 billion between 2026 and 2030 to accelerate housing
delivery and upgrade critical infrastructure. In the near term, we expect
construction activity in the second half of 2025 to mirror the trends observed
in the first half.
UK Distribution (31.5% of Group Revenue, 2024: 34.7%)
H1 2025 H1 2024
£'m £'m Change*
Revenue 394.4 394.4 -
Adjusted operating profit before property profit 13.9 12.6 10.3%
Adjusted operating profit margin before property profit 3.5% 3.2% 30bps
*Change represents the movement between 2025 v 2024 and is based on unrounded
numbers
In UK Distribution, Grafton operates as Selco, Leyland SDM and TG Lynes in
Great Britain with a predominant geographical exposure to London and the
Southeast. In Northern Ireland, MacBlair is a leading traditional builders'
merchant.
Average daily like-for-like revenue in the UK Distribution business was 0.2
per cent higher in the first half supported by a slight pick-up in product
price inflation to 1.9 per cent. Following a slow start to the year, average
daily like-for-like revenue declined by 1.9 per cent in the first quarter.
Despite a 2.0 per cent increase in average daily like-for-like revenue in
the second quarter, market conditions softened noticeably from mid-May through
June. Total revenue was in line with 2024 with new branches opened in
Leyland SDM contributing revenue of £1.3 million in the first half.
The UK economy posted stronger than expected growth in the first quarter,
buoyed by a surge in housing transactions in advance of changes to stamp duty
on 1 April and a rebound in manufacturing output, partly driven by increased
exports to the US to avoid newly imposed tariffs. However, economic momentum
softened towards the end of the second quarter, as the temporary boost from
housing and exports faded and rising global uncertainties weighed on consumer
confidence. Overall, RMI demand remains soft, especially in and around
London and the Southeast which accounted for 63 per cent of Grafton's
distribution revenue in Great Britain in the first half, reflecting ongoing
weakness in consumer sentiment.
Despite the weak volume environment, gross margin increased in UK Distribution
in the first half, reflecting our active commercial strategy. While
overheads were higher in comparison to the prior year due to inflationary
pressure across the cost base, the rate of increase was contained. Overheads
increased on a like-for-like basis by 1.6 per cent because of cost reduction
actions across the businesses and strict controls on discretionary
expenditure.
Adjusted operating profit before property profit increased to £13.9 million
(H1 2024: £12.6 million) and adjusted operating profit margin before property
profit was 30 basis points higher at 3.5 per cent as the improvement in gross
margin more than offset higher overheads.
At Selco, average daily like-for-like revenue increased by 0.5 per cent in the
first half, aided by material price inflation of 2.0 per cent. Volumes
however continued to decline in the first half reflecting both the competitive
trading environment and a tactical focus on reducing low value deliveries that
fail to generate the required financial return.
Although remaining well below our expectations of returns in a normal market,
adjusted operating profit before property profit was strongly ahead in the
first half, largely due to improved gross margin more than offsetting higher
overheads.
Leyland SDM, the leading decorating and DIY brand across Greater London,
continued to experience very challenging trading conditions. Average daily
like-for-like revenue declined by 8.2 per cent in the first half resulting in
a decline in adjusted operating profit before property profit compared to
prior year.
Despite challenging market conditions, adjusted operating profit before
property profit in our TG Lynes business in London was broadly in line with
prior year as the business focused on higher margin projects.
In our MacBlair business in Northern Ireland, average daily like-for-like
revenue increased by 3.2 per cent in the first half, driven by an improving
RMI market and a notable increase in self-build housing activity. Despite an
improving market backdrop, competitive pricing pressure locally and
inflationary cost pressure resulted in adjusted operating profit before
property profit being lower than the first half of last year.
Despite the challenging market conditions in the UK in recent years, the Group
continued to open new branches and invest in both refurbishment of existing
locations and expanding our product offering to better serve customers. As
one of Europe's largest construction markets and somewhere we have operated
successfully for many years, we are focused on continuing to grow our business
in the UK both through pursuing new organic growth opportunities in our
existing businesses as well as potential acquisitions. The medium-term
fundamentals remain positive, underpinned by Government's plans to
significantly increase new housing activity given population growth and a
supply deficit.
Netherlands Distribution (14.0% of Group Revenue, 2024: 15.4%)
H1 2025 H1 2024 Constant Currency Change*
£'m £'m Change*
Revenue 175.2 175.2 - 1.4%
Adjusted operating profit before property profit 13.9 15.2 (8.0%) (6.7%)
Adjusted operating profit margin before property profit 8.0% 8.7% (70bps) -
*Change represents the movement between 2025 v 2024 and is based on unrounded
numbers
The business in the Netherlands, which trades under the Isero and Polvo brands
across 124 branches, is the market leader in the distribution of ironmongery,
tools and fixings products.
Average daily like-for-like revenue increased by 2.8 per cent in the first
half, driven primarily by strong branch sales and growth in national key
accounts, in addition to modest price increases of circa 1 per cent.
Following a strong start to the year, momentum softened due to the completion
of major construction projects and delays in new project commencements.
Market conditions remain uncertain in the Netherlands. Notwithstanding an
improvement in the number of housing transactions in the market, the recovery
of annualised housing permits in the second half of 2024 reversed to a decline
in the first half of this year. Despite a continuing structural shortage in
new homes, planning objections and regulatory restrictions continue to delay
the start-up of new projects. The announced two-year rent freeze for social
housing, which was reversed in June following the collapse of the Dutch
coalition government, resulted in some postponed investment in social housing
in the first half of the year.
Due to active commercial management, gross margin increased in the first half
despite the adverse mix effect of large construction projects and key accounts
accounting for a higher proportion of sales.
Overheads increased in comparison to prior year, partly due to new branch
openings but largely because of wage inflation linked to industry-wide
collective labour agreements, negotiated amid a continuing tight labour
market.
Adjusted operating profit before property profit declined to £13.9 million
(H1 2024: £15.2 million) and adjusted operating profit margin before property
profit was 70 basis points lower at 8.0 per cent largely reflecting the
inflationary pressure on overheads.
Good progress was made as part of a multi-year business improvement project
covering the operating model and supporting systems which, once fully
implemented across the Dutch business, will realise benefits to customers,
increase efficiencies and reduce the cost to serve.
The anticipated recovery in activity in 2025 has yet to materialise, and both
the timing and extent of any upturn of activity remains uncertain. The
medium-term outlook remains positive, supported by a strong project pipeline
among major construction contractors and a persistent structural housing
shortage, underpinned by continued population growth.
Our branch network in the Netherlands has strong national coverage,
particularly in major population centres, except in the eastern part of the
country where there is scope for further expansion. We continue to seek
opportunities to expand our market position to support further growth as the
market recovers.
Spain Distribution (8.3% of Group Revenue, 2024: 0.0%)
H1 2025
£'m
Revenue 104.2
Adjusted operating profit before property profit 6.5
Adjusted operating profit margin before property profit 6.3%
Salvador Escoda, which was acquired by the Group on 30 October 2024, is one of
Spain's leading distributors of HVAC, water and renewable products serving
professional installers across the residential, commercial and industrial
sectors. The business operates through 92 strategically located branches
across Spain, supported by four distribution centres in Barcelona, Madrid,
Seville, and Valencia. While the branch network spans most regions of the
country, it has a stronger presence in the hottest regions such as Catalonia,
Valencia, Andalusia, and Madrid.
The business offers over 100,000 products, primarily serving professional
installers with a focus on the HVAC sector. Over 90 per cent of the range
comprises technical installation products, catering mainly to installation
companies, technicians, and small distributors. The business is
differentiated through its strong private label portfolio, with approximately
60 per cent of sales in the first half of 2025 from high-quality own brands.
Demand for energy-efficient HVAC products continues to grow, driven by
regulatory requirements for residential energy upgrades and rising regional
temperatures.
The integration of Salvador Escoda continues to progress well. The business is
already benefitting from active collaboration with Group functions and sister
businesses to identify and execute opportunities to further build on its
strong position in the Spanish market. During the first half of 2025,
Salvador Escoda reported revenue of £104.2 million and delivered an adjusted
operating profit before property profit of £6.5 million, representing an
adjusted operating profit margin before property profit of 6.3 per cent.
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 in the first half was 6.9 per cent higher, supported by the timing of
strong project-related sales and favourable market conditions. Gross margin
dipped slightly largely due to unfavourable mix both in terms of products and
project related sales. Overheads were higher largely due to inflationary
pressure, new branch openings and costs related to new hires. Adjusted
operating profit before property profit was higher in comparison to the first
half of 2024 primarily due to stronger sales.
Spain continues to be one of the fastest-growing economies in Europe. The
construction sector is forecast to expand by 3-4 per cent in 2025, underpinned
by rising Foreign Direct Investment, easing inflation, increased building
permits, and improving business confidence. The medium-term outlook for
construction remains positive, supported by ongoing population growth and a
structural housing shortage. The HVAC sector is poised for strong growth,
driven by regulatory momentum around energy efficiency, heightened consumer
awareness of energy efficiency, the adoption of advanced technologies in
renovation and retrofit projects and climate change which is expected to
result in increasing temperatures on the Iberian Peninsula.
The Group continues to support the local management team in driving organic
growth, with a new branch opened in Vic in Catalonia in the first half. We
made positive progress in pursuit of acquisition opportunities in the HVAC and
adjacent sectors within the attractive and fragmented Iberian market. We
have the opportunity to be both a consolidator and a compounder in this market
with an objective to significantly scale the business over the next five
years.
Finland Distribution (4.8% of Group Revenue, 2024: 5.7%)
H1 2025 H1 2024 Constant Currency Change*
£'m £'m Change*
Revenue 60.4 65.1 (7.1%) (5.8%)
Adjusted operating profit before property profit 1.8 4.7 (61.8%) (61.6%)
Adjusted operating profit margin before property profit 3.0% 7.3% (430bps) -
*Change represents the movement between 2025 v 2024 and is based on unrounded
numbers.
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 4.2 per cent compared to prior
year primarily due to challenging market conditions, unfavourable weather
patterns which reduced sales of seasonal products and temporary operational
challenges which affected the internal supply chain which are being decisively
and actively addressed. The Finnish construction sector's recovery, following
two years of decline, has been slower than anticipated, with a lack of large
projects intensifying market competition and new building starts at a 30-year
low. To address supply chain operational challenges in the period, targeted
process improvements and inventory management initiatives have been
implemented by the new supply chain management team.
Gross margin declined in comparison to the same period last year largely due
to competitive pricing pressure and sell through of slow-moving inventory at
discounted prices.
Overheads increased compared to the prior year, driven by inflationary
pressure, strategic investments to strengthen the management team and one-off
costs related to the implementation of business improvement projects.
Adjusted operating profit before property profit declined to £1.8 million (H1
2024: £4.7 million) and adjusted operating profit margin before property
profit was 430 basis points lower at 3.0 per cent largely reflecting the
decline in sales and gross margin and higher overhead costs.
Indicators show that confidence in Finland's construction sector remain very
weak with the overall economy expected to see relatively little growth in 2025
before returning to modest levels of growth in 2026. Operational
improvements we are making in IKH, combined with its strong market position,
mean it is well positioned to benefit from the recovery in the wider
economy.
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.
Retail Segment (11.0% of Group Revenue, 2024: 11.5%)
H1 2025 H1 2024 Constant Currency Change*
£'m £'m Change*
Revenue 138.1 130.7 5.6% 7.0%
Operating profit before property profit 19.2 17.2 11.2% 12.2%
Operating profit margin before property profit 13.9% 13.2% 70bps -
*Change represents the movement between 2025 v 2024 and is based on unrounded
numbers
The Woodie's DIY, Home and Garden business in Ireland had a strong performance
in the first half of the year. Woodie's focused customer proposition supported
strong growth across its business as consumer spending remained resilient in
Ireland despite macroeconomic uncertainties.
Average daily like-for-like sales were up 7.6 per cent in the first half in
comparison to prior year. Favourable weather conditions underpinned a
particularly strong performance in plants and garden related products with
some seasonal demand pulled forward into the spring trading months. Revenue
growth of 7.0 per cent, in constant currency, was supported by increases of
5.5 per cent in the number of transactions and 1.5 per cent in average
transaction value. Online sales increased by 34.6 per cent in the first half
of the year, representing 4.7 per cent of total sales.
Building on the successful introduction of the 'Home Shop in Shop' concept
across eleven stores, an additional seven stores were upgraded in the first
half of the year. This continued rollout strengthens the in-store
proposition and elevates the customer experience within the home category.
In addition, the Navan store was completely refurbished including an improved
store layout.
Gross margin improved in the first half largely due to higher commercial
income from suppliers and tight control of costs. The increased level of
revenue led to better overhead efficiency notwithstanding that overheads were
higher due to a further increase in the National Minimum Wage and general
inflationary pressures. The business has continued to streamline processes,
leverage technology and proactively manage staff rostering to offset the
impact of mandated minimum wage increases.
Adjusted operating profit before property profit increased to £19.2 million
(2024: £17.2 million) in the first half and adjusted operating profit margin
before property profit was 70 basis points higher at 13.9 per cent as higher
sales and gross margin more than offset considerable cost challenges.
While macroeconomic uncertainty persists, the outlook for the second half
remains cautiously optimistic, underpinned by continued growth in the Irish
economy. Notwithstanding the impact of US imposed tariffs and any associated
economic consequences, the outlook for Irish economic growth remains positive.
We continue to explore opportunities to expand our store network in Ireland to
complement and strengthen our existing footprint, while also investing in the
expansion of our product range to better meet the evolving needs of customers.
Manufacturing Segment (4.5% of Group Revenue, 2024: 4.8%)
H1 2025 H1 2024 Constant Currency Change*
£'m £'m Change*
Revenue 56.3 54.6 3.1% 3.2%
Adjusted operating profit before property profit 12.2 11.0 10.9% 11.1%
Adjusted operating profit margin before property profit 21.6% 20.1% 150bps -
*Change represents the movement between 2025 v 2024 and is based on unrounded
numbers
CPI EuroMix operates ten manufacturing plants across Great Britain, supplying
dry mortar to national, regional, and local housebuilders and their
subcontractors.
Following a sharp market contraction in 2024, a gradual recovery was
anticipated in 2025, supported by ongoing government initiatives to increase
housing supply. The year began strongly, driven by housebuilders increasing
output, but momentum eased in the second quarter. Bulk product volumes,
which represent approximately 90 per cent of revenue, increased by 5.7 per
cent compared to 2024, driven by higher volumes from housebuilding customers
on existing sites.
Overheads increased modestly compared to the prior year, with proactive cost
management helping to offset inflationary pressures. A centralised field
service hub is now fully operational across all sites, providing enhanced
support and customer service from a single location to strengthen the overall
customer proposition and reduce costs. Adjusted operating profit before
property profit delivered strong year-on-year growth, underpinned by higher
volumes and improved fixed cost absorption.
The timing and extent of recovery in housebuilding, which was anticipated to
be weighted to the second half of 2025, remains uncertain. The medium-term
outlook for UK housebuilding remains favourable, underpinned by a structural
undersupply of new homes, anticipated interest rate reductions, and ongoing
government initiatives to boost housebuilding and reform the planning system.
StairBox, the market leading manufacturer of bespoke timber staircases and
wooden windows and doors, had good sales growth in the first half of the year
in comparison to prior year. Demand in the RMI market in the UK remains
relatively weak as consumer confidence remains subdued.
Revenue increased in the first half, despite volumes of bespoke staircases
being broadly in line with prior year, largely due to selling price inflation
and higher volumes of wooden windows. Gross margin improved in the first
half largely due to tight cost control and relatively stable raw material
prices resulting in higher adjusted operating profit before property profit in
comparison to the first half of 2024.
While market conditions remain challenging, the business is actively pursuing
opportunities to drive sales growth by the launch of a pre-finished range of
windows and doors and the commissioning of a new professional spray line,
enabling delivery of pre-painted windows with industry-leading lead times.
The consolidated results for the first half of 2025 include five months of
trading, representing adjusted operating profit before property profit of
£1.0 million, 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 £7.8 million in the first half 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.
Financial Review
Revenue
Group revenue was up 10.1 per cent to £1.25 billion from £1.14 billion in
the first half of 2025. Group revenue in the like-for-like business increased
by 1.4 per cent (£16.2 million) on the prior year.
The increase in average daily like-for-like revenue was 2.4 per cent compared
to prior year.
Incremental revenue from the Salvador Escoda acquisition, which was completed
in 2024, increased revenue by £104.2 million. The HSS Hire Ireland
acquisition, which completed in May 2025, increased revenue by £2.2 million.
New branches opened in 2024 in the Netherlands (four), and UK Distribution
(two) contributed revenue of £2.2 million in H1 2025.
Currency translation of revenue in the euro denominated businesses to sterling
decreased revenue by £9.5 million. The average Sterling/Euro rate of exchange
for the six months ended 30 June 2025 was Stg84.23p compared to Stg85.47p for
the six months ended 30 June 2024.
Adjusted Operating Profit
Adjusted operating profit of £91.0 million was up from £83.1 million last
year, an increase of £7.9 million (9.5 per cent). This result for the half
year included property profit of £Nil (H1 2024: £Nil).
The adjusted operating profit margin before property profit remained constant
at 7.3 per cent.
Net Finance Income and Expense
The net finance expense was £4.2 million which compares to net finance income
of £0.3 million for the period ended 30 June 2024. This incorporates an
interest charge of £7.5 million (H1 2024: £7.6 million) on lease liabilities
recognised under IFRS 16. Interest income on cash deposits amounted to £9.1
million (H1 2024: £12.0 million).
Returns on deposits and account balances decreased in the half year and
reflected lower Bank of England and European Central Bank base rates in the
first half of the year compared to the prior year and lower cash balances
following the Group's acquisition of Salvador Escoda on 30 October 2024 and
completion of recent share buyback programmes.
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. Interest payable on bank borrowings denominated in euro
and US Private Placement Senior Unsecured Notes was £4.6 million (H1 2024:
£4.1 million). This reflects a combination of higher bank debt acquired
with the Salvador Escoda acquisition offset by lower interest rates payable on
bank debt as the European Central bank rates reduced in the first half of the
year.
The net finance expense included a foreign exchange translation loss of £1.1
million which compares to a gain of £0.9 million in the prior period. The
average sterling/euro rate of exchange for the six months ended 30 June 2025
was Stg84.23p (six months ended 30 June 2024: Stg85.47p). The sterling/euro
exchange rate at 30 June 2025 was Stg85.55p (30 June 2024: Stg84.64p and 31
December 2024: Stg82.92p).
Taxation
The income tax expense of £14.7 million (2024: £14.3 million) is equivalent
to an effective tax rate (before the exceptional profit on disposal) of 19.5
per cent of profit before tax (2024: 20.0 per cent). The rate for the six
months ending 30 June 2025, after the exceptional profit on disposal is
included, is lower at 17.7 per cent (2024: 20.0 per cent). 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 is based on the current forecast rate for the full year.
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 half year of £147.6 million (H1 2024:
£161.1 million) was strong and benefitted from a reduction in working capital
of £4.9 million (H1 2024: reduction of £22.2 million). 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.
Interest paid amounted to £12.3 million (H1 2024: £11.7 million) which
included interest of £7.5 million on IFRS 16 lease liabilities (H1 2024:
£7.6 million). Taxation paid was £16.9 million (H1 2024: £12.4 million).
Cashflow from operations after the payment of interest and taxation was
£118.3 million (H1 2024: £136.9 million).
The cash outflow on the dividend payment was £51.8 million (H1 2024: £52.2
million) and £28.7 million (H1 2024: £52.6 million) was spent on the buyback
of shares.
Capital Expenditure and Investment in Intangible Assets
The Group continued to maintain appropriate control over capital expenditure
which amounted to £16.8 million (H1 2024: £23.3 million). There was also
expenditure of £4.4 million (H1 2024: £2.8 million) on software that is
classified as intangible assets.
Asset replacement capital expenditure of £11.1 million (H1 2024: £14.6
million) compares to the depreciation charge (before IFRS 16) on property,
plant and equipment ("PPE") of £22.9 million (H1 2024: £20.9 million) and
related principally to the replacement of distribution vehicles, plant and
tools for hire by customers, forklifts, fixtures and office equipment and
other assets required to operate the Group's branch network.
The Group incurred development capital expenditure of £5.7 million (H1 2024:
£8.7 million) 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 PPE was £0.7
million (H1 2024: £0.7 million). The amount spent on capital expenditure and
software development, net of the proceeds received on asset disposals, was
£20.4 million (H1 2024: £25.3 million).
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 £1.8 million at
the period end, an improvement of £0.5 million from a surplus of £1.3
million at 31 December 2024.
The deficit on the UK scheme reduced by £1.3 million to £7.5 million and the
surplus on the schemes in Ireland reduced by £0.8 million to £10.1 million.
There was a scheme deficit of £0.8 million (31 December 2024: £0.8 million)
related to the Netherlands business.
Net Debt/Cash
Net debt (including lease obligations) at 30 June 2025 was £147.3 million (31
Dec 2024: £131.7 million and 30 June 2024: £46.8 million).
Our net cash position, before recognising lease liabilities, was £245.8
million (31 Dec 2024: £272.1 million and 30 June 2024: £361.1 million).
The Group's policy is to maintain its investment grade credit rating while
investing in organic developments and acquisition opportunities. The Group
has a progressive dividend policy with a long-term objective of maintaining
dividend cover at between two and three-times earnings although it is
anticipated that dividend cover for the current year will drop modestly
beneath this.
Liquidity
Grafton was in a very strong financial position at the end of the period with
excellent liquidity, net cash before IFRS 16 lease liabilities and a robust
balance sheet.
The Group had liquidity of £765.2 million at 30 June 2025 (31 December 2024:
£776.2 million). As shown in the analysis of liquidity on page 44,
accessible cash and deposits amounted to £490.5 million (31 December 2024:
£505.4 million) and there were undrawn revolving bank facilities of £274.7
million (31 December 2024: £270.8 million).
At 30 June 2025, the Group had bilateral loan facilities of £333.9 million
(31 December 2024: £328.3 million) with four relationship banks, which all
mature in August 2029 and debt obligations of £136.9 million (31 December
2024: £132.7 million) from the issue of unsecured senior notes in the US
Private Placement market.
The revolving loan facilities of £333.9 million 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 average maturity of the committed bank facilities and unsecured senior
notes was 4.1 years at 30 June 2025 (31 December 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 £13.5 million to £1.61 billion at 30 June
2025 from £1.60 billion at 31 December 2024. Profit after tax increased
shareholders' equity by £68.7 million. There was a gain of £23.8 million
on retranslation of euro denominated net assets to sterling at the period-end
rate of exchange. Shareholders' equity was decreased for a remeasurement
loss (net of tax) of £0.9 million on the pension schemes and was reduced for
dividends paid of £51.8 million and by £28.7 million for the buyback of
shares. Other changes increased equity by £2.4 million.
Return on Capital Employed
Adjusted Return on Capital Employed declined by 20 basis points to 10.9 per
cent (H1 2024: 11.1 per cent).
Principal Risks and Uncertainties
The principal risks affecting the Group are set out on pages 47 to 51 of the
2024 Annual Report and Accounts.
Period End Financial Information
The consolidated period-end financial statements presented on pages 16 to 38
comprise:
· The Group condensed income statement and Group condensed
statement of comprehensive income for the six months ended 30 June 2025.
· The Group condensed balance sheet as at 30 June 2025.
· The Group condensed cash flow statement for the six months ended
30 June 2025.
· The Group condensed statement of changes in equity for the six
months ended 30 June 2025.
· The explanatory notes to the condensed consolidated half year
financial statements on pages 22 to 38.
Grafton Group plc
Group Condensed Income Statement
For the six months ended 30 June 2025
Notes Six months to 30 June Six months to 30 June 2024 (Unaudited)
2025 (Unaudited) £'000
£'000
Revenue 2 1,252,405 1,137,156
Operating costs (1,172,576) (1,065,831)
Property profit 3 - -
Operating profit before exceptional items 79,829 71,325
Exceptional items 3 7,841 -
Operating profit 87,670 71,325
Finance expense 4 (13,415) (12,496)
Finance income 4 9,206 12,835
Profit before tax 83,461 71,664
Income tax expense 17 (14,733) (14,327)
Profit after tax for the financial period 68,728 57,337
Profit attributable to:
Owners of the Company 68,728 57,337
Earnings per ordinary share - basic 6 35.05p 28.43p
Earnings per ordinary share - diluted 6 35.04p 28.41p
Grafton Group plc
Group Condensed Statement of Comprehensive Income
For the six months ended 30 June 2025
Notes Six months to 30 June 2025 (Unaudited) Six months to 30 June 2024 (Unaudited)
£'000 £'000
Profit after tax for the financial period 68,728 57,337
Other comprehensive income
Items that are or may be reclassified subsequently to the income statement
Currency translation effects:
- on foreign currency net investments 23,812 (18,682)
Fair value movement on cash flow hedges:
- effective portion of changes in fair value of cash flow hedges (299) 23
23,513 (18,659)
Items that will not be reclassified to the income statement
Remeasurement (loss)/gain on Group defined benefit pension schemes 15 (929) 1,639
Deferred tax on Group defined benefit pension schemes 4 (148)
(925) 1,491
Total other comprehensive income/(expense) 22,588 (17,168)
Total comprehensive income for the financial period 91,316 40,169
Total comprehensive income attributable to:
Owners of the Company 91,316 40,169
Total comprehensive income for the financial period 91,316 40,169
Grafton Group plc - Group Condensed Balance Sheet as at 30 June 2025
Notes 30 June 2025 (Unaudited) 30 June 2024 (Unaudited) 31 Dec 2024 (Audited)
ASSETS £'000 £'000 £'000
Non-current assets
Goodwill 8 649,822 636,759 634,301
Intangible assets 9 137,157 128,123 134,911
Property, plant and equipment 10 374,524 364,026 367,354
Right-of-use asset 11 366,192 381,254 377,726
Investment properties 10 27,481 24,482 27,325
Deferred tax assets 17 7,690 6,336 7,453
Lease receivable - 49 -
Other receivables 12,16 9,586 - -
Retirement benefit assets 15 10,128 11,056 10,932
Other financial assets 128 125 125
Total non-current assets 1,582,708 1,552,210 1,560,127
Current assets
Properties held for sale 10 763 4,199 763
Inventories 12 412,842 357,129 381,803
Trade and other receivables 12 376,476 290,540 300,020
Lease receivable - 103 98
Derivative financial instruments 13 - 17 -
Fixed term cash deposits 13 150,000 150,000 150,000
Cash and cash equivalents (excluding bank overdrafts) 13 344,495 403,398 359,430
Total current assets 1,284,576 1,205,386 1,192,114
Total assets 2,867,284 2,757,596 2,752,241
EQUITY
Equity share capital 6,626 6,860 6,744
Share premium account 225,576 224,131 224,141
Capital redemption reserve 2,683 2,431 2,548
Revaluation reserve 11,939 12,098 12,037
Shares to be issued reserve 7,505 7,998 6,802
Cash flow hedge reserve (305) 17 (6)
Foreign currency translation reserve 65,995 56,600 42,183
Retained earnings 1,295,372 1,287,473 1,305,649
Treasury shares held (5,710) (3,897) (3,897)
Equity attributable to owners of the Parent 1,609,681 1,593,711 1,596,201
LIABILITIES
Non-current liabilities
Interest-bearing loans and borrowings 13 194,559 192,323 188,372
Lease liabilities 13 318,629 341,283 331,572
Provisions 13,151 12,879 13,042
Retirement benefit obligations 15 8,308 14,893 9,591
Deferred tax liabilities 17 61,924 58,085 62,040
Deferred consideration 16 - 511 599
Total non-current liabilities 596,571 619,974 605,216
Current liabilities
Interest-bearing loans and borrowings 13 53,844 - 49,000
Lease liabilities 13 74,483 66,593 72,156
Derivative financial instruments 13 307 - 5
Trade and other payables 12 506,121 448,532 401,142
Current income tax liabilities 21,224 20,060 20,138
Deferred consideration 16 1,398 3,470 3,537
Provisions 3,655 5,256 4,846
Total current liabilities 661,032 543,911 550,824
Total liabilities 1,257,603 1,163,885 1,156,040
Total equity and liabilities 2,867,284 2,757,596 2,752,241
Grafton Group plc - Group Condensed Cash Flow Statement
For the six months ended 30 June 2025
Notes Six months to 30 June 2025 (Unaudited) Six months to 30 June 2024 (Unaudited)
£'000 £'000
Profit before taxation 83,461 71,664
Finance income 4 (9,206) (12,835)
Finance expense 4 13,415 12,496
Operating profit 87,670 71,325
Depreciation 10,11 61,128 55,299
Amortisation of intangible assets 9 12,018 10,900
Share-based payments charge 1,227 2,325
Movement in provisions (2,257) (713)
Loss/(profit) on sale of property, plant and equipment 248 (279)
Profit on disposal of Group businesses 16 (15,142) -
Loss on derecognition of leases 95 55
Other non-cash items (1,118) 707
Contributions to pension schemes in excess of IAS 19 charge (1,137) (763)
Decrease in working capital 12 4,875 22,221
Cash generated from operations 147,607 161,077
Interest paid (12,334) (11,722)
Income taxes paid (16,948) (12,445)
Cash flows from operating activities 118,325 136,910
Investing activities
Inflows
Proceeds from sale of property, plant and equipment 728 745
Proceeds from sale of Group businesses (net of cash disposed) 16 6,484 -
Maturity of fixed term cash deposits 13 200,000 200,000
Interest received 10,461 11,443
217,673 212,188
Outflows
Acquisition of subsidiary undertakings (net of cash acquired) 16 (20,454) -
Investment in fixed term cash deposits 13 (200,000) (150,000)
Deferred acquisition consideration paid 16 (2,945) (1,532)
Investment in intangible assets - computer software 9 (4,361) (2,777)
Purchase of property, plant and equipment 10 (16,791) (23,261)
(244,551) (177,570)
Cash flows from investing activities (26,878) 34,618
Financing activities
Inflows
Proceeds from the issue of share capital 1,452 272
Proceeds from borrowings 11,958 -
13,410 272
Outflows
Repayment of borrowings - (6,658)
Dividends paid 5 (51,769) (52,216)
Treasury shares purchased (share buyback) 20 (28,746) (52,640)
Payment on lease liabilities (37,457) (34,888)
(117,972) (146,402)
Cash flows from financing activities (104,562) (146,130)
Net (decrease)/increase in cash and cash equivalents (13,115) 25,398
Cash and cash equivalents at 1 January 351,055 383,939
Effect of exchange rate fluctuations on cash held 6,555 (5,939)
Cash and cash equivalents at the end of the year 344,495 403,398
Cash and cash equivalents are broken down as follows:
Cash at bank and short-term deposits 13 344,495 403,398
Bank overdrafts 13 - -
Cash and cash equivalents at the end of the year 344,495 403,398
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
Six months to 30 June 2025 (Unaudited)
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 period - - - - - - - 68,728 - 68,728
Total other comprehensive income
Remeasurement loss on pensions (net of tax) - - - - - - - (925) - (925)
Movement in cash flow hedge reserve (net of tax) - - - - - (299) - - - (299)
Currency translation effect on foreign currency net investments - - - - - - 23,812 - - 23,812
Total other comprehensive income - - - - - (299) 23,812 (925) - 22,588
Total comprehensive income - - - - - (299) 23,812 67,803 - 91,316
Transactions with owners of the Company recognised directly in equity
Dividends paid - - - - - - - (51,769) - (51,769)
Issue of Grafton Units 17 1,435 - - - - - - - 1,452
Purchase of treasury shares (Note 20) - - - - - - - - (28,746) (28,746)
Cancellation of treasury shares (Note 20) (135) - 135 - - - - (26,930) 26,930 -
Transfer from treasury shares (Note 20) - - - - - - - (3) 3 -
Share based payments charge - - - - 1,227 - - - - 1,227
Transfer from shares to be issued reserve - - - - (524) - - 524 - -
Transfer from revaluation reserve - - - (98) - - - 98 - -
(118) 1,435 135 (98) 703 - - (78,080) (1,813) (77,836)
At 30 June 2025 6,626 225,576 2,683 11,939 7,505 (305) 65,995 1,295,372 (5,710) 1,609,681
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
Six months to 30 June 2024 (Unaudited)
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 period - - - - - - - 57,337 - 57,337
Total other comprehensive income
Remeasurement gain on pensions (net of tax) - - - - - - - 1,491 - 1,491
Movement in cash flow hedge reserve (net of tax) - - - - - 23 - - - 23
Currency translation effect on foreign currency net investments - - - - - - (18,682) - - (18,682)
Total other comprehensive expense - - - - - 23 (18,682) 1,491 - (17,168)
Total comprehensive income - - - - - 23 (18,682) 58,828 - 40,169
Transactions with owners of the Company recognised directly in equity
Dividends paid - - - - - - - (52,216) - (52,216)
Issue of Grafton Units 2 270 - - - - - - - 272
Purchase of treasury shares (Note 20) - - - - - - - - (52,640) (52,640)
Cancellation of treasury shares (Note 20) (236) - 236 - - - - (53,003) 53,003 -
Transfer from treasury shares (Note 20) - - - - - - - (105) 105 -
Share-based payments charge - - - - 2,325 - - - - 2,325
Transfer from shares to be issued reserve - - - - (889) - - 889 - -
Transfer from revaluation reserve - - - (88) - - - 88 - -
(234) 270 236 (88) 1,436 - - (104,347) 468 (102,259)
At 30 June 2024 6,860 224,131 2,431 12,098 7,998 17 56,600 1,287,473 (3,897) 1,593,711
Grafton Group plc
Group Condensed Statement of Changes in Equity (continued)
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 (Audited)
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 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 Condensed Consolidated Half Year Financial Statements for the six
months ended 30 June 2025
1. General Information
Grafton Group plc ("Grafton" or "the Group") is an international business
operating in the distribution, manufacturing and DIY retail sectors of the
building materials industry.
The Group operates leading distribution formats for building materials and
construction related products in Ireland, the UK, the Netherlands, Spain and
Finland. The Group also operate the largest consumer focused DIY retailer in
Ireland which is complementary to our Irish distribution business and we
manufacture and distribute mortar and timber windows and staircases in the UK.
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 condensed consolidated half year financial statements have been prepared
in accordance with the Disclosure Guidance and Transparency Rules sourcebook
of the United Kingdom's Financial Conduct Authority ('FCA') and International
Accounting Standard ("IAS") 34 Interim Financial Reporting" as adopted by the
European Union ('EU'). These condensed consolidated half year financial
statements do not include all the information and disclosures required in the
Group Annual Report and Accounts and should be read in conjunction with the
Group's Annual Report and Accounts for the year ended 31 December 2024 that
are available on the Company's website www.graftonplc.com
(http://www.graftonplc.com) .
The condensed consolidated half year financial statements for the six months
ended 30 June 2025 are unaudited but have been reviewed by the auditor whose
report is set out on pages 46 and 47.
The condensed consolidated half year financial statements presented do not
constitute financial statements prepared in accordance with International
Financial Reporting Standards ('IFRS') issued by the International Accounting
Standards Board ('IASB') as adopted by the EU. The financial information
included in this report in relation to the year ended 31 December 2024 does
not comprise statutory annual financial statements within the meaning of
section 295 of the Companies Act 2014. The Annual Report and Accounts for the
year ended 31 December 2024 have been filed with the Registrar of Companies
and the audit report thereon was unqualified and did not contain any matters
to which attention was drawn by way of emphasis.
The accounting policies and methods of computation and presentation adopted in
the preparation of the condensed consolidated half year financial statements
are consistent with those applied in the Annual Report and Accounts for the
year ended 31 December 2024. The financial information includes all
adjustments that management considers necessary for a fair presentation of
such financial information. All such adjustments are of a normal recurring
nature. Certain tables in the financial information may not add precisely
because of our consistent convention of rounding to one decimal place.
The financial reporting framework that has been applied in the preparation of
the Group Annual Report and Accounts for the year ended 31 December 2024 is
applicable law and IFRS, as adopted by the EU
Going Concern
The Group's net cash position, before recognising lease liabilities, was
£245.8 million at 30 June 2025 (31 December 2024: £272.1 million). Net debt
including lease obligations was £147.3 million at 30 June 2025 (31 December
2024: £131.7 million). The Group had liquidity of £765.2 million at 30
June 2025 (31 December 2024: £776.2 million) of which £490.5 million (31
December 2024: £505.4 million) was held in accessible cash and deposits and
£274.7 million (31 December 2024: £270.8 million) 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.
1. General Information (continued)
Basis of Preparation, Accounting Policies and Estimates (continued)
Going Concern (continued)
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 43 to 51 of the 2024
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
information.
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 half-yearly 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
as a result of new information or more experience. Such changes are recognised
in the period in which the estimate is revised. In particular, 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 these consolidated
financial statements.
In preparing these half-yearly financial statements, the significant
judgements made by management in applying the Group's accounting policies and
the key sources of estimation uncertainty were the same as those that applied
to the Group's Annual Report and Accounts for the year ended 31 December 2024.
In addition, further judgements were made by management in relation to the
variable earn-out component following the disposal of the Group's MFP piping
business on 31 May 2025. This resulted in the recognition of deferred
consideration receivable, which is contingent upon future purchases by the
Group, over a period of 6 years. The fair value of deferred consideration
receivable is calculated based on historical trading volumes, and the
magnitude of the expected receivable is discounted to present value using
market derived discount rates.
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:
· IAS21 (Amendments)
The Effects of Changes in Foreign Exchange
Rates (Effective 1 January 2025)
2. Segmental Analysis
The amount of revenue and operating profit under the Group's reportable
segments of Distribution, Retailing and Manufacturing is shown below. Segment
profit measure is operating profit before exceptional items, amortisation of
intangible assets arising on acquisitions and acquisition related items.
Six months to 30 June 2025 (Unaudited) Six months to 30 June 2024 (Unaudited)
£'000 £'000
Revenue
UK distribution 394,363 394,384
Ireland distribution 323,824 317,154
Netherlands distribution 175,198 175,206
Spain distribution 104,170 -
Finland distribution 60,436 65,075
Total distribution 1,057,991 951,819
Retailing 138,068 130,692
Manufacturing 62,752 62,040
Less: inter-segment revenue - manufacturing (6,406) (7,395)
Total revenue 1,252,405 1,137,156
Segmental operating profit before intangible amortisation arising on
acquisitions and acquisition related items
UK distribution 13,911 12,608
Ireland distribution 31,456 29,664
Netherlands distribution 13,947 15,157
Spain distribution 6,533 -
Finland distribution 1,812 4,740
Total distribution 67,659 62,169
Retailing 19,155 17,218
Manufacturing 12,184 10,986
98,998 90,373
Central activities (8,026) (7,269)
90,972 83,104
Property profit - -
Operating profit before exceptional items, intangible amortisation arising on 90,972 83,104
acquisitions and acquisition related items
Exceptional items 7,841 -
Operating profit before intangible amortisation arising on acquisitions and 98,813 83,104
acquisition related items
Acquisition related items* (383) (1,737)
Amortisation of intangible assets arising on acquisitions (10,760) (10,042)
Operating profit 87,670 71,325
Finance expense (13,415) (12,496)
Finance income 9,206 12,835
Profit before tax 83,461 71,664
Income tax expense (14,733) (14,327)
Profit after tax for the financial period 68,728 57,337
* 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:
Six months to 30 June 2025 (Unaudited) Six months to 30 June 2024 (Unaudited)
£'000 £'000
Revenue*
United Kingdom 447,930 445,451
Ireland 464,671 451,424
Netherlands 175,198 175,206
Spain 104,170 -
Finland 60,436 65,075
Total revenue 1,252,405 1,137,156
*Service revenue, which relates to plant and equipment hire and is recognised
over time, amounted to £8.7 million for the period (H1 2024: £6.1 million).
30 June 2025 (Unaudited) 30 June 2024 (Unaudited)
£'000 £'000
Segment assets
Distribution 2,080,111 1,900,035
Retailing 157,723 162,873
Manufacturing 117,009 123,756
2,354,843 2,186,664
Unallocated assets
Deferred tax assets 7,690 6,336
Retirement benefit assets 10,128 11,056
Other financial assets 128 125
Derivative financial instruments (current) - 17
Fixed term cash deposits 150,000 150,000
Cash and cash equivalents 344,495 403,398
Total assets 2,867,284 2,757,596
30 June 2025 (Unaudited) 30 June 2024 (Unaudited)
£'000 £'000
Segment liabilities
Distribution 723,884 672,930
Retailing 162,313 172,595
Manufacturing 31,240 32,999
917,437 878,524
Unallocated liabilities
Interest bearing loans and borrowings (current and non-current) 248,403 192,323
Retirement benefit obligations 8,308 14,893
Deferred tax liabilities 61,924 58,085
Current income tax liabilities 21,224 20,060
Derivative financial instruments (current) 307 -
Total liabilities 1,257,603 1,163,885
3. Property Profit & Exceptional Items
Property Profit
There were no property disposals in the first half of 2025 or 2024.
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 £7.8m with further details outlined in Note 16.
4. Finance Expense and Finance Income
Six months to Six months to 30 June 2024 (Unaudited)
30 June 2025 (Unaudited) £'000
£'000
Finance expense
Interest on bank loans, US senior notes and overdrafts** 4,649 * 4,059 *
Interest on lease liabilities 7,483 * 7,582 *
Net finance cost on pension scheme obligations 34 167
Unwinding of discount applicable to deferred consideration (Note 16) 165 688
Foreign exchange loss 1,084 -
13,415 12,496
Finance income
Interest income on bank deposits (9,126) * (11,961) *
Unwinding of discount applicable to deferred receivables (Note 16) (80) -
Foreign exchange gain - (874)
(9,206) (12,835)
Net finance expense/(income) 4,209 (339)
* Net bank and US senior note interest income of £4.5 million (H1 2024: £7.9
million interest income). Including interest on lease liabilities, net
interest expense was £3.0 million (H1 2024: £0.3 million 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
£51.8 million (2024: final dividend for 2023 of 26.00 pence amounted to
£52.2 million).
An interim dividend for 2025 of 10.75 pence per share will be paid on 10
October 2025 by Grafton Group plc to shareholders on the Register of Members
at the close of business on 12 September 2025 (the 'Record Date'). The
ex-dividend date is 11 September 2025.
A liability in respect of the interim dividend has not been recognised in the
balance sheet at 30 June 2025, as there was no present obligation to pay the
dividend at the half-year.
6. Earnings per Share
The computation of basic, diluted and underlying earnings per share is set out
below:
Half Year Half Year
30 June 2025 (Unaudited) 30 June 2024 (Unaudited)
£'000 £'000
Numerator for basic, adjusted and diluted earnings per share:
Profit after tax for the financial period 68,728 57,337
Numerator for basic and diluted earnings per share 68,728 57,337
Profit after tax for the financial period 68,728 57,337
Exceptional items (7,841) -
Amortisation of intangible assets arising on acquisitions 10,760 10,042
Tax relating to amortisation of intangible assets arising on acquisitions (2,444) (2,261)
Acquisition related items 383 1,737
Tax on acquisition related items - (148)
Unwinding of discount applicable to deferred consideration 165 688
Unwinding of discount applicable to deferred receivable (80) -
Tax on unwinding of discount - (101)
Numerator for adjusted earnings per share 69,671 67,294
Number of Grafton Units Number of Grafton Units
Denominator for basic and adjusted earnings per share:
Weighted average number of Grafton Units in issue 196,100,791 201,695,630
Dilutive effect of options and awards 62,563 94,654
Denominator for diluted earnings per share 196,163,354 201,790,284
Earnings per share (pence)
- Basic 35.05 28.43
- Diluted 35.04 28.41
Adjusted earnings per share (pence)*
- Basic 35.53 33.36
- Diluted 35.52 33.35
* The term "Adjusted" means before exceptional items, amortisation of
intangible assets arising on acquisitions, the impact of unwinding acquisition
and disposal related deferred consideration 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
half-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 six months ended 30 June
2025 was Stg84.23p (six months ended 30 June 2024: Stg85.47p). The
sterling/euro exchange rate at 30 June 2025 was Stg85.55p (30 June 2024:
Stg84.64p and 31 December 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. Impairment indicators in two of our markets prompted an impairment
test to be carried out on the UK Distribution and Finland Distribution CGUs.
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
period (H1 2024: £Nil).
Goodwill
£'000
Net Book Value
As at 1 January 2025 634,301
Arising on acquisition (Note 16) 5,681
Currency translation adjustment 9,840
As at 30 June 2025 649,822
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 4,361 - - 4,361
Reclassification from property, plant and
equipment (Note 10) 1,464 - - 1,464
Arising on acquisition (Note 16) 16 1,514 3,616 5,146
Amortisation (1,258) (2,320) (8,440) (12,018)
Currency translation adjustment 290 778 2,225 3,293
As at 30 June 2025 17,953 30,719 88,485 137,157
The amortisation expense of £12.0 million (H1 2024: £10.9 million) has been
charged in 'operating costs' in the income statement. Amortisation of
intangible assets arising on acquisitions in prior periods amounted to £10.8
million (H1 2024: £10.0 million).
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 16,791 - -
Depreciation (22,915) - -
Disposals (976) - -
Disposal of Group businesses (Note 16) (1,400) - -
Reclassification to intangible assets* (Note 9) (1,464) - -
Arising on acquisition (Note 16) 10,636 - -
Currency translation adjustment 6,498 - 156
As at 30 June 2025 374,524 763 27,481
* Computer software amounting to £1.5m 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* 7,002
Arising on acquisition (Note 16) 4,045
Disposals (163)
Depreciation (38,213)
Remeasurements* 9,972
Currency translation adjustment 5,823
As at 30 June 2025 366,192
* Right-of-use asset additions relate to new lease contracts entered into
during the period 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.
12. 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 8,664 6,335 (8,513) 6,486
Interest accruals* - (1,255) 202 (1,053)
Arising on acquisition (Note 16) 162 6,777 (5,614) 1,325
Disposal of Group businesses (Note 16) (1,313) (3,593) 3,605 (1,301)
Deferred consideration receivable (Note 16) - current - 1,934 - 1,934
Working capital movement in 2025 23,526 66,258 (94,659) (4,875)
As at 30 June 2025 (current) 412,842 376,476 (506,121) 283,197
Deferred consideration receivable (Note 16) - non-current - 9,586 - 9,586
As at 30 June 2025 (current and non-current) 412,842 386,062 (506,121) 292,783
* 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 period ended 30 June 2024 is shown below:
Trade Trade and other
and other receivables payables
Inventories Total
£'000 £'000 £'000 £'000
Working capital movement in H1 2024 1,828 31,774 (55,823) (22,221)
13. Interest-Bearing Loans, Borrowings and Net Debt
30 June 31 Dec
2025 2024
£'000 £'000
Interest-bearing loans and borrowings
Bank overdrafts* - 8,375
Bank credit facilities (current)* 53,844 40,625
Bank loans (non-current) 58,011 56,053
US senior notes (non-current) 136,548 132,319
Total interest-bearing loans and borrowings 248,403 237,372
Leases
Included in non-current liabilities 318,629 331,572
Included in current liabilities 74,483 72,156
Total leases 393,112 403,728
Derivatives
Included in current liabilities 307 5
Total derivatives 307 5
Fixed term cash deposits**
Included in current assets (150,000) (150,000)
Total fixed term cash deposits (150,000) (150,000)
Cash at bank and short-term deposits*** (344,495) (359,430)
Net debt 147,327 131,675
Net (cash) before leases (245,785) (272,053)
*The bank overdrafts of £Nil (31 December 2024: £8.4 million) and euro bank
credit facilities of £53.8 million at 30 June 2025 (31 December 2024: £40.6
million) 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
£53.8 million 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 the period to 30 June 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 £351.1 million consisted of cash at bank and short-term deposits of
£359.4 million, net of bank overdrafts of £8.4 million.
At 30 June 2025, the Group had bilateral loan facilities of £333.9 million
(2024: £328.3 million) with four relationship banks, which all mature in
August 2029.
The revolving loan facilities of £333.9 million 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)
30 June Dec 2024 31 Dec
2025 2024
£'000 £'000
Liabilities measured and recognised at fair value
Designated as hedging instruments
Other derivative instruments (307) (5)
Fair value measurement of liabilities carried at amortised cost
US senior notes (130,970) (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.
30 June 31 Dec
2025 2024
£'000 £'000
Assets/(liabilities) measured and recognised at fair value
Deferred consideration receivable on disposal of businesses (Note 16) 11,520 -
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 30 June 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 are 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.
Deferred 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)
30 June 2025 30 June 2024
£'000 £'000
Net (decrease)/increase in cash and cash equivalents (13,115) 25,398
Net movement in fixed term cash deposits - (50,000)
Net movement in derivative financial instruments (302) 22
Lease liabilities acquired (Note 16) (4,045) -
Movement in debt and lease financing 8,691 22,590
Change in net (debt) resulting from cash flows (8,771) (1,990)
Currency translation adjustment (6,881) 4,469
Movement in net (debt) in the period (15,652) 2,479
Net (debt) at 1 January (131,675) (49,263)
Net (debt) at end of the period (147,327) (46,784)
15. Retirement Benefits
The principal financial assumptions employed in the valuation of the Group's
defined benefit scheme liabilities for the current period and prior year were
as follows:
Irish Schemes UK Schemes
At 30 June 2025 At 31 Dec 2024 At 30 June 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 - - 2.80% 3.00%
Discount rate 3.70% 3.45% 5.60% 5.50%
Inflation rate increase 1.85% 1.85% 2.40%/2.90% ** 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)
Half Year to Year to 31 Dec 2024 Half Year to Year to 31 Dec Half Year to Year to 31 Dec
30 June 30 June 2024 30 June 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 3,883 7,151 - - 3,883 7,151
Contributions by employer 1,303 2,604 - - 1,303 2,604
Contributions by members - - - - - -
Benefit payments (6,695) (11,976) 6,695 11,976 - -
Administration costs (103) (37) - - (103) (37)
Other long-term benefit (expense) - - (63) (91) (63) (91)
Interest cost on scheme liabilities - - (3,917) (7,456) (3,917) (7,456)
Remeasurements
Actuarial (loss)/gains from:
-experience variations - - (659) 1,369 (659) 1,369
-financial assumptions - - 5,453 14,637 5,453 14,637
-demographic assumptions - - - (814) - (814)
Return on plan assets excluding interest income (5,723) (9,753) - - (5,723) (9,753)
Translation adjustment 2,897 (4,718) (2,592) 4,276 305 (442)
At 30 June / 31 December 173,937 178,375 (172,117) (177,034) 1,820 1,341
Related deferred tax asset (net) 817 1,037
Net pension asset/(liability) 2,637 2,378
The net pension scheme asset before tax of £1.8 million (31 December 2024:
£1.3 million) is shown in the Group balance sheet as (i) retirement benefit
obligations (non-current liabilities) of £8.3 million (31 December 2024:
£9.6 million) and (ii) retirement benefit assets (non-current assets) of
£10.1 million (31 December 2024: £10.9 million).
At 30 June 2025, the retirement benefit asset of £10.1 million (Dec 2024:
£10.9 million) 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 £8.3 million (Dec 2024: £9.6 million)
relates to one scheme in the UK (£7.5 million, Dec 2024: £8.8 million) and
one scheme in the Netherlands (£0.8 million, Dec 2024: £0.8 million).
The loss on plan assets was £1.8 million (31 December 2024: loss on plan
assets of £2.6 million).
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 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 Irish Distribution segment.
The fair value of assets and liabilities acquired in 2025 are set out below:
Total
£'000
Property, plant and equipment 10,636
Right-of-use asset 4,045
Intangible assets - computer software 16
Intangible assets - trade names 1,514
Intangible assets - customer relationships 3,616
Inventories 162
Trade and other receivables 6,777
Trade and other payables (5,614)
Provisions (752)
Lease liability (4,045)
Corporation tax liability (941)
Deferred tax liability (641)
Cash acquired 3,528
Net assets acquired 18,301
Goodwill 5,681
Consideration 23,982
Satisfied by:
Cash paid 23,982
Net cash outflow - arising on acquisitions
Cash consideration 23,982
Less: cash and cash equivalents acquired (3,528)
20,454
The fair value of the net assets acquired have been determined on a
provisional basis. 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 £7.1 million. The fair value of these
receivables is £6.8 million and is inclusive of a loss allowance of £0.3
million.
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 no material adjustments
made to provisional fair values in the period relating to any acquisitions
completed in the prior year.
The acquisition contributed revenue of £2.2 million and operating profit of
£0.1 million for the period from the date of acquisition to 30 June 2025.
If this acquisition had occurred on 1 January 2025, it is estimated that it
would have contributed revenue of £13.7 million and adjusted operating profit
of £1.4 million in the period.
The Group incurred acquisition costs of £0.3 million in 2025 (H1 2024: £0.8
million), 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
the acquisition of businesses:
Deferred Consideration
Payable
£'000
As at 1 January 2025 (4,136)
Currency translation adjustment (42)
Deferred acquisition consideration paid in the period 2,945
Unwinding of discount applicable to deferred consideration (Note 4) (165)
As at 30 June 2025 (1,398)
Split of deferred consideration payable £'000
Non-current -
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 £7.6million representing an overall
profit on disposal after costs of disposal. The profit on the disposal
reflects the cash consideration received of £9.1 million and deferred cash
receivable of £11.2 million offset by the net book value of the assets being
disposed of £5.2 million.
Deferred 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
for the first half of 2025 include five months of operating profit from the
MFP business amounting to £1.0 million (Period to 30 June 2024: £1.5
million).
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 liability (63)
Deferred tax liability (47)
Cash disposed 2,588
Net assets disposed 5,179
Cash consideration received (9,072)
Deferred consideration receivable (11,249)
Net profit on disposal of Group businesses, before disposal costs (15,142)
Amounts recognised in the period within Exceptional Items
Gross profit on disposal of Group businesses 15,142
Disposal costs* (7,301)
7,841
* 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 9,072
Less: cash and cash equivalents disposed (2,588)
6,484
The following table shows the analysis of deferred consideration receivable on
the disposal of businesses, which is disclosed in trade and other receivables:
Deferred Consideration
Receivable
£'000
As at 1 January 2025 -
Deferred receivable recognised on disposal of Group businesses 11,249
Currency translation adjustment 191
Deferred consideration received in the period -
Unwinding of discount applicable to deferred consideration (Note 4) 80
As at 30 June 2025 11,520
Split of deferred consideration receivable £'000
Non-current 9,586
Current 1,934
11,520
17. Taxation
The income tax expense of £14.7 million (2024: £14.3 million) is equivalent
to an effective tax rate (before the exceptional profit on disposal) of 19.5
per cent of profit before tax (H1 2024: 20.0 per cent, Full Year 2024: 20.0
per cent). The rate for the six months ending 30 June 2025, after the
exceptional profit on disposal is included, is lower at 17.7 per cent (2024:
20.0 per cent). 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 main countries where the Group operates and is based on
the current forecast rate for the full year.
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 per cent 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 expects to recognise an immaterial Pillar Two current tax expense of
£0.9 million for 2025 (2024: £0.5 million) 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 30 June 2025, the deferred tax asset was £7.7 million (31 December 2024:
£7.5 million) and the deferred tax liability was £61.9 million (31 December
2024: £62.0 million). At 30 June 2025, there were unrecognised deferred tax
assets in relation to capital losses of £0.7 million (31 December 2024: £0.7
million), trading losses of £1.4 million (31 December 2024: £1.3 million)
and deductible temporary differences of £5.7 million (31 December 2024: £5.2
million).
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
period to 30 June 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 £5.4 million (March 2024: £4.6
million), 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 2024
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 27,077 54 27,131 (25,318) - 1,813
Period ended 30 June 2025 28,689 57 28,746 (26,930) (3) 1,813
Total at 30 June 2025 411,364 906 412,270 (409,605) (852) 1,813
* Including transaction costs.
** At 30 June 2025, the share buyback programmes 1, 2, 3, 4 and 5, and the
LTIP purchase and cancellation, were fully completed and the related
transactions costs have been transferred from treasury shares to retained
earnings, totalling £0.9 million.
20. Share Buyback and Treasury Shares (continued)
Since the first buyback commenced on 9 May 2022 and up to 8 July 2025, when
the sixth programme completed, the Group had purchased a total of 46.54
million ordinary shares which represents 19.4 per cent of the issued share
capital on the date of commencement. It acquired them at an average price of
£8.67 per share. Excluding shares re-purchased to offset the impact of
LTIPS awards vesting in 2022 (£7.6 million) and 2023 (£3.4 million), cash of
£403.3 million has been returned to shareholders through all completed share
buybacks up to 8 July 2025.
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 £30.0
million which will 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 £28.4 million, including
transaction costs. These shares were all cancelled by 31 December 2024. In
January, the Group purchased a further 171,302 shares in aggregate for
cancellation at a further cost of £1.6 million, 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 £30.0
million which will end no later than 31 August 2025, subject to market
conditions. At 30 June 2025, the Group had purchased 3,000,578 shares in
aggregate for cancellation at a total cost of £27.1 million, including
transaction costs. However, due to timing, only 2,827,499 were cancelled at 30
June 2025 and the remaining 173,079 shares purchased for £1.8 million were
cancelled in July 2025. Details of shares bought back since 30 June 2025 are
included in Note 22 below.
21. Issue of Shares
During the period, 182,663 Grafton Units were issued under the Group's Savings
Related Share Option Scheme (SAYE) to eligible UK employees.
In addition, 11,856 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 Company bought back, for cancellation, 0.3 million shares at a cost of
£2.9 million between 1 July 2025 and 8 July 2025, when the sixth share
buyback programme completed.
In addition, the Board has announced a seventh programme, commencing 4
September 2025, to buy back ordinary shares in the Company for an aggregate
consideration of up to £25.0 million. The seventh share buyback programme
will end no later than 31 January 2026, subject to market conditions
There have been no other material events subsequent to 30 June 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 2
September 2025.
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 and the 2024 Half Year Report.
The term "Adjusted" means before exceptional items and acquisition related items. 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.
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.
Average capital employed Average capital employed is the average of the capital employed balance at the
opening and closing balance sheet dates.
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. The prior year
percentage has been restated due to the changes noted within the definition of
the Free Cash Flow APM.
Free Cash Flow Cash generated from operations less replacement capital expenditure (net of
disposal proceeds), less interest paid (net), income taxes paid and payment of
lease liabilities. In the current year the definition has been refined to also
deduct payment of deferred acquisition consideration, and the prior year has
been restated to reflect this.
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
H1 2025 H1 2024
£'m £'m
Revenue 1,252.4 1,137.2
Operating profit 87.7 71.3
Property profit - -
Exceptional items (7.8) -
Acquisition related items 0.4 1.7
Amortisation of intangible assets arising on acquisitions 10.8 10.0
Adjusted operating profit/EBITA before property profit 91.0 83.1
Adjusted operating profit/EBITA margin before property profit 7.3% 7.3%
Operating Profit Margin
H1 2025 H1 2024
£'m £'m
Revenue 1,252.4 1,137.2
Operating profit 87.7 71.3
Operating profit margin 7.0% 6.3%
Adjusted Operating Profit/EBITA
H1 2025 H1 2024
£'m £'m
Revenue 1,252.4 1,137.2
Operating profit 87.7 71.3
Exceptional items (7.8) -
Acquisition related items 0.4 1.7
Amortisation of intangible assets arising on acquisitions 10.8 10.0
Adjusted operating profit/EBITA 91.0 83.1
Adjusted operating profit/EBITA margin 7.3% 7.3%
Adjusted Profit before Tax
H1 2025 H1 2024
£'m £'m
Profit before tax 83.5 71.7
Amortisation of intangible assets arising on acquisitions 10.8 10.0
Exceptional items (7.8) -
Acquisition related items 0.4 1.7
Unwinding of discount applicable to deferred consideration 0.2 0.7
Unwinding of discount applicable to deferred receivables (0.1) -
Adjusted profit before tax 86.8 84.1
Adjusted Profit after Tax
H1 2025 H1 2024
£'m £'m
Profit after tax 68.7 57.3
Amortisation of intangible assets arising on acquisitions 10.8 10.0
Tax on amortisation of intangible assets arising on acquisitions (2.4) (2.3)
Exceptional items (7.8) -
Acquisition related items 0.4 1.7
Tax on acquisition related items - (0.1)
Unwinding of discount applicable to deferred receivable (0.1) -
Unwinding of discount applicable to deferred consideration 0.2 0.7
Tax on unwinding of discount applicable to deferred consideration - (0.1)
Adjusted profit after tax 69.7 67.3
Reconciliation of Profit to EBITDA
H1 2025 H1 2024
£'m £'m
Profit after tax 68.7 57.3
Exceptional items (7.8) -
Net finance expense/(income) 4.2 (0.3)
Income tax expense 14.7 14.3
Depreciation 61.1 55.3
Intangible asset amortisation 12.0 10.9
Acquisition related items 0.4 1.7
EBITDA 153.4 139.3
Net (Debt) 30 June
30 June 2024
2025 £'m
£'m
Cash and cash equivalents 344.5 403.4
Interest-bearing loans (non-current) (194.6) (192.3)
Interest-bearing loans (current) (53.8) -
Bank overdrafts - -
Lease liabilities (non-current) (318.6) (341.3)
Lease liabilities (current) (74.5) (66.6)
Derivatives (0.3) 0.0
Fixed term cash deposits 150.0 150.0
Net (Debt) (147.3) (46.8)
Net Debt to EBITDA
30 June 30 June
2025 2024
£'m £'m
EBITDA (rolling 12 months) 306.1 294.2
Net debt 147.3 46.8
Net debt to EBITDA - times 0.48 0.16
EBITDA Interest Cover (including interest on lease liabilities)
H1 2025 H1 2024
£'m £'m
EBITDA 153.4 139.3
Net bank/loan note interest expense/(income) 3.0 (0.3)
EBITDA interest cover - times 51.0 n/a
Free Cash Flow
H1 2025 H1 2024
£'m £'m
Cash generated from operations 147.6 161.1
Replacement capital expenditure (11.1) (14.6)
Proceeds on sale of property, plant and equipment 0.7 0.7
Proceeds on sale of held for sale/investment properties - -
Interest received 10.5 11.4
Interest paid (12.3) (11.7)
Payment of lease liabilities (37.5) (34.9)
Deferred acquisition consideration paid (2.9) (1.5)
Income taxes paid (16.9) (12.4)
Free cash flow 78.0 98.0
Adjusted Return on Capital Employed
30 June 30 June
2025 2024
£'m £'m
Operating profit* 169.0 160.1
Exceptional items* (7.8) -
Acquisition related items* 3.3 3.6
Amortisation of intangible assets arising on acquisitions* 21.0 19.9
Adjusted operating profit 185.4 183.5
Total equity - current period end 1,609.7 1,593.7
Net debt 147.3 46.8
Capital employed - current period end 1,757.0 1,640.5
Total equity - prior period end 1,593.7 1,675.3
Net debt/(cash) 46.8 (3.7)
Capital employed - prior period end 1,640.5 1,671.6
Average capital employed 1,698.8 1,656.1
Adjusted return on capital employed 10.9% 11.1%
*rolling 12 months
Capital Turn 30 June 30 June
2025 2024
£'m £'m
Total revenue for previous 12 months 2,397.5 2,267.1
Average capital employed 1,698.8 1,656.1
Capital turn - times 1.4 1.4
Free Cash Conversion
H1 2025 H1 2024
£'m £'m
Free cash flow 78.0 98.0
Adjusted operating profit 91.0 83.1
Free cash conversion 86% 118%
Gearing 30 June 30 June
2025 2024
£'m £'m
Total equity attributable to owners of the Parent 1,609.7 1,593.7
Group net debt 147.3 46.8
Gearing 9.2% 2.9%
Liquidity 30 June 30 June
2025 2024
£'m £'m
Cash and cash equivalents 344.5 403.4
Fixed term cash deposits 150.0 150.0
Less: cash held against letter of credit* (4.0) (4.0)
Accessible cash 490.5 549.4
Undrawn revolving bank facilities 274.7 273.3
Liquidity 765.2 822.7
*At 30 June 2025, cash of £4.0 million (30 June 2024: £4.0 million) 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 30 June 30 June
2025 2024
£'m £'m
Net (debt) - after leases (147.3) (46.8)
Lease liability 393.1 407.9
Net cash - before leases 245.8 361.1
Like-for-Like Revenue
H1 2025 H1 2024
£'m £'m
2024/2023 revenue 1,137.2 1,189.3
Organic growth 16.2 (49.7)
Organic growth - new branches 2.2 3.5
Total organic growth 18.4 (46.2)
Acquisitions 106.3 11.5
Foreign exchange (9.5) (17.4)
2025/2024 revenue 1,252.4 1,137.2
Like-for-like movement (organic growth, excluding new branches, as % of prior 1.4% (4.2%)
period revenue)
Cash Outflow on Dividends and Share Buyback, excluding transaction costs H1 2025 H1 2024
£'m £'m
Dividend payment 51.8 52.2
Purchase of treasury shares (Note 20) 28.7 52.5
Exclude LTIP share purchase (Note 20) - (0.0)
Cash outflow on dividends and share buyback, excluding transaction costs 80.5 104.8
Responsibility Statement in Respect of the Six Months Ended 30 June 2025
The Directors are responsible for preparing this interim management report and the condensed consolidated half year financial statements in accordance with International Accounting Standards 34, 'Interim Financial Reporting' as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.
The Directors confirm that, to the best of their knowledge:
· The condensed consolidated interim financial statements for the half year ended 30 June 2025 have been prepared in accordance with the international accounting standard applicable to interim financial reporting, IAS 34 as adopted by the EU;
· The interim management report includes a fair review of the important events that have occurred during the first six months of the financial year, and its impact on the condensed consolidated interim financial statements for the half year ended 30 June 2025, and a description of the principal risks and uncertainties for the remaining six months;
· The interim management report includes a fair review of related party transactions that have occurred during the first six months of the current financial year and that have materially affected the financial position or the performance of the Group during that period, and any changes in the related party transactions described in the last annual report that could have a material effect on the financial position or performance of the Group in the first six months of the current financial year.
On behalf of the Board:
Eric Born David Arnold
Chief Executive Officer Chief Financial Officer
Independent review report to Grafton Group plc
Report on the condensed consolidated half year financial statements
Our conclusion
We have reviewed Grafton Group plc's condensed consolidated half year
financial statements (the "interim financial statements") in the Half Year
Report of Grafton Group plc for the six month period ended 30 June 2025 (the
"period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European Union and the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
The interim financial statements, comprise:
· the Group Condensed Balance Sheet as at 30 June 2025;
· the Group Condensed Income Statement and Group Condensed Statement of
Comprehensive Income for the six months then ended;
· the Group Condensed Cash Flow Statement for the six months then
ended;
· the Group Condensed Statement of Changes in Equity for the six months
then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the Half Year Report have been
prepared in accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
As disclosed in note 1 to the interim financial statements, the financial
reporting framework that has been applied in the preparation of the full
annual financial statements of the group is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (Ireland) 2410, 'Review of Interim Financial Information Performed
by the Independent Auditor of the Entity' ("ISRE (Ireland) 2410") issued for
use in Ireland. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (Ireland) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the Half Year Report and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (Ireland) 2410. However future events or conditions may cause the group
to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The Half Year Report, including the interim financial statements, is the
responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the Half Year Report in accordance with the
Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority. In preparing the Half Year Report including the interim financial
statements, the directors are responsible for assessing the group's ability to
continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or to cease operations, or have
no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the Half Year Report based on our review. Our conclusion,
including our Conclusions relating to going concern, is based on procedures
that are less extensive than audit procedures, as described in the Basis for
conclusion paragraph of this report. This report, including the conclusion,
has been prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority and for no other purpose. We do not, in
giving this conclusion, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers
Chartered Accountants
Dublin
3 September 2025
Notes:
(a) The maintenance and integrity of the Grafton Group plc website is the
responsibility of the directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the auditors accept
no responsibility for any changes that may have occurred to the financial
statements since they were initially presented on the website.
(b) Legislation in the Republic of Ireland governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
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