ANALYSIS:IF MARKET gossip says Grafton executive chairman Michael Chadwick might be minded to attempt to take the business off the stock market in light of the sharp fall in its share price, the man himself indicated yesterday that such a move is not on the agenda, writes ARTHUR BEESLEY

Making the point that conversations about a "normal" group refinancing had been interpreted as something quite different, he said: "I think we're very happy as a public company."

It is a given that Grafton is not happy about a share decline that has brought its market capitalisation down to some €1.2 billion at present from €3 billion at the end of 2006, but there is little the group can do in the current market but build its business and trade through the downturn.

Grafton faces the triple whammy of the credit crunch, combined with the declining property market at home, while profits from its expanding British unit are eroded by sterling's weakness against the euro.

For many years a prime beneficiary of the Irish property boom and the bull run on the Dublin stock exchange, Grafton now is operating in more straitened times. If the group sees no return to housing completions at levels exceeding 70,000 or 80,000 per annum, it says the strategy of developers dropping new house prices is paying off increasingly in Dublin. In the medium term at least, that could stimulate activity.

Grafton will continue to acquire businesses, primarily in Britain. But Chadwick, who has indicated confidence in the business by increasing his personal stake, put a limit on the scale of any transactions. "We're happy to make acquisitions that we see as adding value and being a good strategic fit," he said. "In the current environment, we would be somewhat less keen to make a very large acquisition."

With some 2,000 independent builders' merchants to be consolidated in the British market, Grafton sees an opportunity to increase its annual turnover by some £100 million sterling through acquisitions this year.

Still, it sees no respite on pricing in the British buyout market. As the fourth-largest builders' merchant in a market in which scale delivers considerable efficiencies, Grafton faces competitionfrom its biggest rivals, Jewson, Wolseley and Travis Perkins.