Shares of Grafton Group (LSE:GFTU) climbed on Thursday after the building materials distributor confirmed its full-year 2025 guidance, supported by a rebound in recent trading.
The company posted first-half revenue of £1.25 billion, a 10.1% increase from the prior year, with like-for-like sales up 2.4%. Adjusted EBIT rose 9.5% to £91 million, slightly above expectations, representing 49% of consensus forecasts for the full year. Adjusted EPS reached 35.5 pence, a 6.5% increase, while free cash flow totaled £69 million, or 52% of the annual forecast. Net debt stood at £147 million, higher than RBC’s estimate of £103 million.
RBC analysts commented: “Despite unhelpful macro conditions, Grafton continues to operate well given the circumstances.” Trading momentum strengthened in July and August, with like-for-like sales up 2.3% year-on-year, matching the first-half pace after a slowdown in May and June. RBC noted that “Ireland and the Netherlands performed better against challenging conditions in the U.K. and Finland, in particular.”
The company declared a dividend of 10.75 pence per share, slightly below RBC’s forecast of 10.8 pence, and extended its share buyback program by £25 million. Consensus forecasts for FY25 point to total sales of £2.51 billion, up 10% from last year, with like-for-like growth of 2.2% and adjusted EBIT expected at £185.7 million. For 2026, consensus projects 4% sales growth and adjusted EBIT of £205 million.
RBC emphasized: “Despite a normalisation in trading, there is still a high level of caution heading into autumn trading and FY26.” They also highlighted Grafton’s financial strength: “Balance sheet firepower and earnings recovery potential remain core to our investment case, with an expanding pipeline of M&A opportunities.”
Regional performance varied, with Ireland seeing like-for-like sales rise 3.7% in H1 and accelerate to 5.3% in July and August. The Netherlands showed steady improvement, with summer sales up 2.8%. By contrast, the U.K. market remained subdued, with like-for-like sales of 0.2% in H1 and 0.5% in the summer, while Finland struggled, down 4.2% in H1 and 9% in July and August.
“Cash generation and net debt continue to be solid,” the analysts said, noting that these factors support Grafton’s stability despite pressure in some markets.
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