Positive signs expected in Grafton interim results

Davy forecasts group will increase earnings by more than 25% this year

Grafton Group finance director Colm Ó Nualláin (left) and chief executive Gavin Slark at the presentation of preliminary results earlier this year. Photograph: Eric Luke

Grafton Group finance director Colm Ó Nualláin (left) and chief executive Gavin Slark at the presentation of preliminary results earlier this year. Photograph: Eric Luke

Mon, Aug 26, 2013, 01:00

Builders’ merchant Grafton Group and travel software firm Datalex are among a number of Iseq-listed companies with results out this week.

Grafton’s interim results, which are due to be published on Wednesday, are expected to confirm the company is in ever-improving health.

The group enjoyed a good end to the first half of the year, with revenue up 1.5 per cent year-on-year, according to a trading update issued in July.

Merchanting revenues rose 1 per cent in Ireland while underlying revenue growth was up 1.7 per cent in the UK. Davy stockbrokers said this represented a “very strong end” to the half, as revenues were down 8.7 per cent after the first four months.

“We are currently forecasting that Grafton will increase earnings by over 25 per cent this year and by over 15 per cent in 2014,” Davy analyst Flor O’Donoghue said.

He said the forecasts were framed on a modest increase in underlying revenues in the UK of 2 per cent with 1 per cent revenue growth in Ireland.

This is expected to translate into trading profits of €85.5 million, up 17 per cent on last year.

The stockbroking firm is predicting interim earnings before interest, tax and amortisation expenses (Ebita) of about €35 million, over 10 per cent better than the first half of last year.

Datalex will report first-half results on Friday and has already guided it expects to achieve Ebita growth of 25 to 30 per cent for this full year. Goodbody stockbrokers is “conservatively” estimating this to be 25 per cent.

Goodbody said revenue of $17.5 million (up 11.3 per cent year-on-year) is driven predominantly by transaction revenues and this is expected to translate into Ebitda of $3 million and a net cash position of $12 million.