Building supplies and garden centre firm Grafton (GFTU) gained 7% to 845p as it upped guidance thanks to a home improvement boom.
The company said it experienced ‘exceptional growth’ for the four months to the end of October due to very high demand for home maintenance and improvement products.
The owner of the Woodie’s DIY, Home and Garden business revealed that its performance was ahead of expectations with total revenue rising 5.1% to £1 billion, compared to £962 million this time last year.
Grafton said it is on course to deliver a strong performance for the second half with pent-up demand from DIY enthusiasts driving its higher than expected operating profit.
The company said it now anticipates adjusted operating profit in the second half in the range of £130 million to £140 million on the basis that trends in trading for the rest of the year remain consistent with those experienced in October and are not materially affected by the recently tightened Covid-19 restrictions.
‘This is approximately 24% to 33% higher than the second half of 2019 and is significantly ahead of guidance given in August that adjusted operating profit in the second half would be at a similar level to the same period in 2019’, the company said.
Numis analyst Christen Hjorth said: ‘Grafton has announced an impressive performance on pre-IFRS 16 net cash, which has increased from c.£59 million at 30 June to c.£150 million at 31 October. In our view, this gives management significant optionality in regards to capital allocation, including the continuation of the group's impressive M&A track record.’
