Grafton Group (GFTU) H1 2025 earnings summary

Executive summary

• Achieved organic revenue growth of 2.4% like-for-like, led by strong performances in Spain and Ireland, and a return to profit growth in UK Distribution for the first time since 2021.

• Nearly two-thirds of revenue now generated outside the UK, reflecting ongoing diversification.

• Continued focus on operational efficiencies, cost control, and ongoing investment to position for market recovery.

• Strengthened market position in Ireland with the acquisition of HSS Hire and successful integration of Salvador Escoda in Spain.

• Gross margin improved by 60bps, offsetting inflationary and labour cost pressures; operating margin steady at 7.3%.

Financial highlights

• Revenue rose 10.1% year-over-year to £1,252.4m in H1.

• Adjusted operating profit up 9.5% to £91.0m; adjusted EPS increased 6.5% to 35.5p.

• Free cash flow of £78.0m, with 86% conversion of adjusted operating profit.

• Net cash (pre-leases) at £245.8m at period end; net debt (inc. leases) £147.3m.

• £81m returned to shareholders via dividends and buybacks; interim dividend up 2.4%.

Outlook and guidance

• Trading conditions in H2 expected to mirror H1, with continued growth in Ireland and Spain.

• FY 2025 adjusted operating profit expected broadly in line with analyst consensus (£185.1m); key trading months ahead.

• Positive medium-term outlook across all geographies, with market recovery anticipated in weaker regions.

• Technical guidance: finance charge £9–10m, tax rate ~19.5%, depreciation/amortisation £150m, capex £25–30m.