Grafton (GN5) AI Stock Analysis

Company Guidance

The group reconfirmed full year operating profit guidance between NOK 190 million and NOK 200 million, currently expects a finance charge of £15 million to £16 million, and said the effective tax rate of 19.8% is its assumed rate for the full year; it proposed to increase the interim dividend by 2% to 11p per share, after also stating that it increased the interim dividend by 2.3%. For H2, it expects to continue to perform strongly in the Republic of Ireland, no significant uplift in Northern Ireland, Great Britain market conditions to remain unchanged compared to the first half, Dutch market conditions to be similar to the first half, the gradual recovery in Finland to continue, and continued strong growth in Spain. It expects product inflation on the heavy building material side to be probably closer to 4%, I would say, than 3%, and said 70% to 80% would be a reasonable level and an expectation level for free cash conversion, while 15% to 20% would be a reasonable level of drop through in a recovery. Its 2030 ambitions are CHF 850 million-plus free cash flow cumulatively until the end of 2030, an EPS CAGR greater than 10%, and a normalized markets ROCE of 13% or more by 2030; in Iberia, its target is €1 billion of revenue and a 7% to 10% operating margin.