DIY giant Grafton Group’s (GB:GFTU) performance is in line with the company’s expectations with revenue up by 13.9%, although the company’s shares recently dipped on the news that CEO Gavin Slark is to leave after a decade at the helm.
Grafton’s slower performance in the UK market was offset by good revenue growth in Ireland and the Netherlands. Similarly, the group’s retailing business was down by 22.8% but this was compensated by manufacturing revenue growth of 21.3%.
Gavin Slark, Chief Executive Officer of Grafton Group, commented: “The Group’s overall trading performance was good against a very strong comparator in the first half of last year and our operating profit expectations for the full year are unchanged.
“Notwithstanding current macroeconomic risks, our portfolio of resilient high performing businesses has the flexibility to adapt to changing circumstances and is well-positioned to outperform.”
Mr. Slark will continue in the role till December 2022. Shares in Grafton Group shares are down by 38% YTD, with a slump after Slark revealed he was to leave his role. Taking a longer view, the shares are up by 4% over the last three years.
Grafton Group is based in the UK and Ireland and supplies building materials such as home building, repair, maintenance, and more, as well as owning DIY and home stores in Ireland.
Healthy dividends
The company is very focused on generating higher value and returns for its investors. It paid a total dividend of 30.5p per share in 2021, up by 110% from the previous year. This was paid in two parts as an interim and final dividends of 8.5p and 22.0p, respectively.
Grafton’s dividend yield is attractive at around 4%, higher than the industry average of 1.6%.
View from the City
According to TipRanks’ analyst rating consensus, Grafton Group stock has a Moderate Buy rating from Berenberg Bank’s analyst Lushanthan Mahendraraja.
He has an average price target of 1300.0p, which represents a 71% change in the price from the current level.
Conclusion
With a strong portfolio of brands, Grafton Group’s performance is on track with its expectations.
Investors and analysts are awaiting full results which are expected in August 2022. The current low share price creates a good buying opportunity.
