International building materials distributor and DIY retailer Grafton Group has reported its trading update for the first half of 2025, showing revenue and profit growth in line with expectations.
Adjusted operating profit rose by 9.5% to £91.0 million (H1 2024: £83.1 million), driven largely by the contribution from Salvador Escoda, a Spanish distributor of heating, ventilation, air conditioning, water and renewable products acquired last year.
The Group’s continued focus on margin management delivered a gross margin improvement of 60 basis points, helping offset inflationary pressures and higher labour costs. Net cash stood at £245.8 million (before lease liabilities) which provided "strong significant firepower to capitalise on organic and inorganic development opportunities".
CEO Eric Born noted that following the acquisition of Salvador Escoda, non-UK markets now represent around 64% of the group's turnover. Integration of the Spanish business is said to be progressing well, with positive momentum in Iberia identified as an attractive and fragmented growth market.
In the UK, distribution operations have returned to profit growth for the first time since 2021, despite ongoing challenges in the RMI market. In Ireland, HSS Hire Ireland was acquired to complement the Chadwicks hire division, while Woodie’s delivered a strong performance in the half year.
Looking ahead, Grafton expects full-year adjusted operating profit to be broadly in line with analysts’ forecasts, with the important autumn trading period still to come. Consensus forecasts compiled by the group show an expected adjusted operating profit of approximately £185.1 million, within a range of £184.0 million to £187.3 million.
“Grafton delivered a resilient performance in the first half, with revenue and profit approximately 10% higher than the same period last year, driven by strong contributions from Spain and Ireland. Outlook for the full year varies by market, but in the round, and with the important autumn trading months to come, we expect full year adjusted operating profit to be broadly in line with analysts’ expectations,” said Born.
