The building-materials distributor, Grafton Group, anticipates surpassing market forecasts for adjusted operating profit in 2023. Despite a challenging trading environment towards the end of the year, the London-listed company remains optimistic about its performance.
Grafton attributes its success to improved trading by its businesses in Ireland, along with the implementation of cost-cutting measures and ongoing cost discipline. In 2023, revenue reached £2.32 billion ($2.96 billion), a slight increase from £2.30 billion in the previous year. Notably, Ireland, the Netherlands, and Finland contribute approximately 60% of the group's revenue.
While average daily like-for-like revenue experienced a 2.9% decline in November and December, it fared better than September and October. This decrease was partially influenced by product price deflation within the distribution businesses in Ireland and the U.K.
Looking ahead, Grafton has provided an adjusted operating profit consensus for 2023, estimating it to be around £197.3 million, with a range of £194.0 million to £201.0 million. To provide context, in 2022, it amounted to £285.9 million.
Chief Executive Eric Born expressed confidence in the medium-term demand drivers within their markets and highlighted Grafton's favorable position for growth as trading conditions improve. Furthermore, the company boasts a strong balance sheet.
As a result of this news, Grafton Group's shares increased by 14.0 pence (1.6%) to 910.0 pence as of 0833 GMT.
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