Builders merchants and DIY group, Grafton said on Thursday that it aims to grow earnings per share (EPS) at a compound annual rate of more than 10 per cent out to 2030.
However, Goodbody Stockbrokers analyst Shane Carberry said that it would likely be next year before the group returns to double-digit earnings growth as the out-turn for this year “is likely to be constrained by macro headwinds”.
The Dublin-based, but London listed company said that it expected its cumulative free cash flow to be in excess of £850 million (€985 million) over the five-year period. That is also a return on capital employed of about 13 per cent.
“The medium-term targets we are announcing reflect our confidence in the strength of our strategy for organic and inorganic growth, the resilience of our business model and opportunities ahead, underpinned by long-term structural growth drivers,” said chief executive Eric Born. Inorganic growth usually refers to acquisitions.
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“We remain focused on delivering attractive earnings growth, strong cash generation and consistent shareholder returns, while maintaining a robust balance sheet.”
Carberry described the targets for Grafton, which owns the Woodie’s DIY retailing and Chadwicks merchanting brands in the Republic, as “ambitious but very achievable”.
Group revenues last year were £2.52 billion and full-year adjusted operating profit rose 7.1 per cent to £190.2 million. Group revenues for last year were £2.52 billion, and full-year adjusted operating profit rose 7.1 per cent to £190.2 million.
The profit boost was attributed to the first full-year contribution of Spanish air conditioning distributor, Salvador Escoda in Spain. Adjusted earnings per share were 5.1 per cent higher at 75.4p.
