Grafton (GFTU), the owner of the third largest general building merchant Buildbase, has carried last year’s momentum into 2017.

The company reports decent first quarter results. Of it diversified business streams, only its Belgium operation is in the red and group revenue is up by 6.1% to 30 April.

The market’s reaction is muted though as Grafton’s share price remains flat, suggesting these numbers had been priced in. Since the start of the year Grafton has enjoyed a 38% share price rise to 767p.


A Dublin-headquartered company, Grafton’s Ireland operations top the company’s revenue growth with an increase of 13.6%. Analyst Liberum says that the company is being helped by a recovery in Ireland’s repair, maintenance and improvement (RPI) market which began in the final quarter of last year.


Grafton is also bulking up its Netherlands offering with an acquisition of Dutch builders merchant Gunters en Mueser, a 14 branch business. Grafton says that the backdrop of a recovery in the Dutch economy provides ‘favourable conditions in the housing market’.

The company is less bullish on the UK though, with its chief executive Gavin Slark saying he’s ‘cautious’ about the country’s prospects. He adds that with the portfolio of businesses, the company looks to ‘the future with confidence’.

There are dangers with Grafton though, it’s a low margin business hovering around the 5.6% mark. The market it operates in is highly competitive, a reason behind the low profit margin.

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Issue Date: 09 May 2017