Grafton acknowledges that these results were ahead of expectations but performance over the entire business ensured a healthy operating profit of £271.2 million.
Gavin Slark, CEO, fleshed out some of the highlights that enabled the growth figures.
He praised staff members for their dedication and the role they had played in delivering ‘safe and superior’ customer outcomes….’ In the face of Covid restrictions, material shortages and other pressures.
Investment in Europe was enabled by the sale of traditional merchant businesses which left a healthy sum of over £500 million to spend on businesses like Woodies in Ireland, Selco Builders’ Warehouses and some other related Nordic operations like IKH.
Slark also highlighted points regarding sustainability, digitisation and innovation that are vital to the development of the business. Specific targets should be set to meet the requirements of the UN Sustainability and Development goals as well as more local initiatives to reduce waste etc.
The Outlook
During the height of the covid pandemic demand was huge and many felt confident to spend covid ‘savings’ on improvements to and enlargement of their houses. However as material prices have risen and wage settlements become more demanding, most businesses have been aware of rising inflation that is starting to feed through the system. Nevertheless, Slark notes that the UK economy seems to remain buoyant and managing the headwinds of inflation and shortage of labour.
It remains to be seen how most recent events in the world will affect everyone.
For the basics, consult the spreadsheet below
|
Continuing Operations1 |
2021 |
20202 (restated) |
Change |
|
Revenue |
£2,110m |
£1,679m |
+25.6% |
|
Adjusted3 operating profit |
£288.0m |
£170.6m |
+68.8% |
|
Adjusted operating profit before property profit4 |
£271.2m |
£170.7m |
+58.9% |
|
Adjusted operating profit margin before property profit |
12.9% |
10.2% |
+270bps |
|
Adjusted profit before tax |
£268.6m |
£146.4m |
+83.5% |
|
Adjusted earnings per share |
93.0p |
50.3p |
+84.9% |
|
Dividend |
30.5p |
14.5p |
+110.3% |
|
Adjusted return on capital employed (ROCE) |
19.4% |
11.9% |
+750bps |
|
Net cash (before IFRS 16 leases) 5 |
£588.0m |
£181.9m |
+£406.1m |
|
Net cash/(debt) - (including IFRS 16 leases) 6 |
£139.0m |
(£355.0m) |
+£494.0m |
|
|
|
|
|
|
Statutory Results - Continuing Operations |
2021 |
2020 (restated) |
Change |
|
Operating profit |
£269.2m |
£157.8m |
+70.6% |
|
Profit before tax |
£249.8m |
£133.6m |
+87.0% |
|
Basic earnings per share |
86.4p |
45.9p |
+88.3% |
1 Supplementary financial information in relation to Alternative Performance Measures (APMs) is set out on pages 44 to 49.
2 The results for 2020 have been restated as the Traditional Merchanting Business in Great Britain is now classified as a discontinued operation. Details are set out in Note 14.
3 The term "Adjusted" means before exceptional items and acquisition related items. Please refer to APMs on page 44 for details of acquisition related items. The adjustment of acquisition related items is a change on previous years and thus the 2020 comparative APM's have been restated to conform to current year presentation.
4 The property profit from continuing operations amounted to £16.7 million in 2021 whereas this was a loss of £0.1 million in 2020.
5 Net cash from total operations (before IFRS 16 lease liabilities), which includes cash of the discontinued operations in 2020.
For the full results follow this link.
