REG - Grafton Group PLC - Trading Update

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RNS Number : 4252E  Grafton Group PLC  15 May 2026

Grafton Group plc

Trading Update

Resilient trading performance supported by diversified portfolio

 

Grafton Group plc ("Grafton" or "the Group"), the European multinational
distributor of construction related products and solutions, issues this
trading update for the period from 1 January 2026 to 30 April 2026 ("the
period"), ahead of the Annual General Meeting ("AGM") of the Company that will
be held today at 10.30 am in the Irish Management Institute (IMI) Conference
Centre, Sandyford Road, Dublin 16, D16 X8C3, Ireland.

 

Highlights

 

 ·         Acquisitions closed in two of Europe's fastest‑growing markets - Mercaluz
           (Spain) and Cygnum (Ireland)
 ·         Average daily like-for-like sales were broadly flat in the first four months
           as growth in Iberia, the Island of Ireland and Northern Europe offset weak
           markets in Great Britain
 ·         Actively managing supply chain risk - no material disruption to date but
           inflationary pressures evident
 ·         Ongoing focus on disciplined cost control and margin management
 ·         Full‑year 2026 adjusted operating profit(1) is expected to be in the range
           of £190m - £200m(2), with the contribution from the acquisitions of Mercaluz
           and Cygnum offsetting weaker trading in Great Britain
 ·         A Capital Markets Event for pre-registered analysts and investors will be held
           on 11 June 2026, providing an update on the Group's strategy, capital
           allocation framework and medium‑term financial targets

Trading and Performance

 

Group revenue in the period increased by 3.2% to £830.1m (2025: £804.4m), up
1.0% in constant currency. This growth included the positive impact of two
acquisitions in Ireland, including HSS Hire Ireland, which was acquired on 31
May 2025, and one month of trading by Cygnum, a supplier of offsite timber
frame solutions. Trading days were in line with the prior year across all
businesses, except for the Netherlands and Spain, which each had one fewer.

Group average daily like‑for‑like revenue was in line with the prior year,
despite ongoing headwinds in certain markets, which have been further impacted
by greater geopolitical uncertainty. A robust performance in Iberia, alongside
more modest sales growth in the Island of Ireland and Northern Europe, was
fully offset by weaker trading in Great Britain. Trading in the seasonally
less important early months of the year was also influenced by exceptionally
wet weather in Ireland and the UK.

Though we have experienced no material disruption to date, the Group continues
to actively manage supply chain risks arising from conflict in the Middle
East, maintaining high levels of stock availability for customers. Supplier
price increases and higher fuel costs are being closely managed, while the
Group remains mindful that sustained cost inflation may place pressure on
market demand and volumes. Against this backdrop, focus remains firmly on
disciplined cost control and margin management.

The following table shows the changes in average daily like-for-like revenue
compared to the same period in the prior year:

 

 

 Segment            Average Daily Like-for-Like Revenue Change in Constant Currency
                    Four Months to           30 April 2026
 Island of Ireland  +1.8%
 Great Britain      (5.0%)
 Northern Europe    +1.6%
 Iberia             +5.0%
 Group              0.0%

 

Island of Ireland

Our Island of Ireland businesses delivered average daily like-for-like revenue
growth of 1.8% in the period in comparison to last year driven by strong
growth in Chadwicks. Chadwicks benefited from a pick‑up in construction
activity in recent months following persistently wet weather earlier in the
year and some forward purchases ahead of price increases. Woodie's trading was
slightly behind strong prior‑year comparatives, when favourable weather in
early Spring 2025 pulled forward demand for plant and garden related products.

The acquisition of Cygnum, a leading made-to-order supplier of offsite timber
frame solutions to developers and contractors in the Irish market, completed
on 31 March 2026. The acquisition will broaden Grafton's exposure to the
growing new‑build market in Ireland and enables Cygnum's customers to
benefit from access to a wider range of construction‑related products and
solutions. The integration process is underway and progressing as planned.

Great Britain

Average daily like‑for‑like revenue in Great Britain declined by 5.0% in
the period compared with the prior year, reflecting a further weakening in
construction markets. Following a weather‑impacted slow start to the year,
subdued construction activity was affected by rising cost inflation and weaker
consumer confidence linked to the conflict in the Middle East. All businesses
have responded to the challenging market environment by maintaining tight cost
control and driving efficiency improvements.

Northern Europe

Average daily like‑for‑like revenue in Northern Europe increased by 1.6%
compared with the prior year, driven by strong growth in Finland alongside
more modest growth in the Netherlands. Despite a subdued economic environment,
IKH in Finland had a good start to the year, benefitting from a combination of
management actions and favourable winter weather conditions. In the
Netherlands, markets remain relatively subdued with management focused on
self-help and business improvement.

Iberia

Salvador Escoda's average daily like-for-like revenue was 5.0% ahead of the
prior year. The business made a strong start to the year, with a
well‑executed Spring sales campaign supporting growth across the air
conditioning, ventilation and refrigeration product categories.

 

The acquisition of Mercaluz, which is predominantly a distributor of domestic
and commercial air conditioning equipment, completed on 30 April 2026. The
acquisition expands Grafton's presence in the Iberian HVAC market and advances
the Group's strategy to build a significant distribution business for
construction‑related products and solutions in Iberia.

 

Share Buyback

 

The eighth buyback programme was launched on 5 March 2026 to buy back ordinary
shares in the Company for an aggregate consideration of up to £25m. This
programme completed on 8 May 2026 and involved the repurchase of 2.75m
ordinary shares at an average share price of £9.10.

Reflecting its disciplined approach to capital deployment and supported by its
resilient balance sheet and strong cash conversion, Grafton has completed
eight share buyback programmes since May 2022. This has returned cash of
£453.3m to shareholders through share buybacks reflecting the repurchase of
52.03m ordinary shares at an average price of £8.71 per share. In total, the
Group has reduced its share count by 21.6% since the first buyback programme
commenced.

Outlook

 

Following completion of the Cygnum and Mercaluz acquisitions, which are
expected to offset weaker trading in Great Britain, full‑year adjusted
operating profit(1) is now expected to be in the range of £190m -
£200m(2).

Grafton's geographically diversified portfolio underpins its resilience, with
over 75% of Group profits in 2025 generated outside Great Britain. Trading
conditions remain supportive in the Island of Ireland and Iberia, while the
timing of a material recovery in Finland and the Netherlands remains
uncertain. In Great Britain, representing less than a quarter of Grafton's
2025 operating profit(3), the outlook has weakened, with independent
commentators suggesting that total construction activity is now expected to
contract in the current year.

Notwithstanding ongoing geopolitical uncertainty and any associated
inflationary or supply chain pressures, the medium‑term fundamentals for
Grafton remain positive, supported by structural housing shortages across its
markets and an expected recovery in RMI demand following an extended period of
underinvestment by households. The Group's balance sheet remains strong,
leaving Grafton well positioned to support future development opportunities as
they arise.

Eric Born, Chief Executive Officer of Grafton Group plc commented:

"The first four months of 2026 demonstrate Grafton's resilience and strategic
focus. While markets continue to face uncertainty, we are pleased to report
growth in three of our four markets, alongside significant acquisitions in our
strongest growth markets of Iberia and the Island of Ireland.

"Despite headwinds, we are currently guiding adjusted operating profit in the
range of £190m - £200m for 2026 which would represent another year of
progression. At our upcoming Capital Markets Event, we look forward to
outlining the ambition to develop each of Grafton's geographic segments
further, supported by a strong balance sheet and leveraging the power of the
Group."

 

 

 

( )

(1. Adjusted operating profit is defined as profit before amortisation of
intangible assets arising on acquisitions, acquisition related items,
exceptional items, net finance expense and income tax expense.)

(2. Grafton compiled consensus analysts' forecasts for 2026 show adjusted
operating profit of circa £190.8m.)

(3. Percentage of Group) (adjusted operating profit excluding central
activities.)

 

Ends

 

For further information please contact:

 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

 

About Grafton

Grafton Group plc is a European multinational distributor of construction
related products and solutions comprising four geographic segments serving the
Island of Ireland, Great Britain, Northern Europe and Iberia.  In our Irish
home market, we also operate the leading home improvement retailer.

Trading from c. 490 branches with c.10,000 colleagues, the Group's portfolio
of market leading, trusted brands includes:

 ·         Island of Ireland: Chadwicks Group, Woodie's and MacBlair
 ·         Great Britain: Selco, Leyland SDM, T.G. Lynes, CPI EuroMix and StairBox
 ·         Northern Europe: Isero / Polvo (Netherlands) and IKH (Finland)
 ·         Iberia: Salvador Escoda and Mercaluz

 

For further information visit www.graftonplc.com (http://www.graftonplc.com)

 

 

 

 

 

Forward-looking statements

This press release may include forward-looking statements. These
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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.

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