Grafton Group keeps guidance after solid H1 profit growth

(Sharecast News) - Grafton Group held on to its full-year earnings guidance after a solid first half, in which adjusted operating profits rose 8.2% year-on-year to £98.5m. The European construction products distributor said its first-half performance, which generated 6.7% higher revenues at £1.34bn, was supported by strong underlying trading and acquisitions in Iberia and Ireland, while operating margins improved by 10 basis points to 7.4%.

Adjusted earnings per share were 10.8% up on last year at 39.4p, helped by the company's capital allocation strategy, including the positive impact of share buybacks.

Grafton said the business saw "limited disruption" from geopolitical developments during the first six months of the year due to "continued proactive management of supply chain for strong product availability".

On the downside, challenges in Britain continued to weigh on profitability, with conditions expected to remain consistent in the second half, while the timing of a sustained recovery in Northern Europe "remains uncertain".

Nevertheless, the firm still expects full-year adjusted operating profit to come in between £190m and £200m.

Net cash fell to £78.3m from £245.8m the year before due to recent acquisitions, while the interim dividend was raised by 2.3% to 11.0p per share.

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