Revenue and profit at building materials distributor Grafton fell in 2024 as the company navigated challenging market conditions and grappled with price deflation in the UK and Ireland.
But trading was slightly ahead of analysts’ expectations and property profit was higher in the year ended December 31st 2024, Grafton said.
Revenue was down 1.6 per cent to £2.28 billion, from £2.32 billion a year earlier. Adjusted operating profit was down 13.6 per cent to £177.5 million.
Grafton said operating margins were also squeezed by increases in operating costs, with labour costs rising as national minimum wages increased substantially and local collective labour agreements were implemented.
The group showed a strong performance in Ireland, Grafton said, with its distribution and retailing businesses both achieving strong volume increases.
Its Chadwicks business delivered higher trading profitability in a broadly flat construction market, while retail chain Woodie’s was supported by the growth of the Irish economy.
The rate of volume decline continued to ease in the UK.
“We are pleased to have successfully navigated challenging market conditions in 2024 to deliver adjusted operating profit slightly ahead of analysts’ expectations. This resilient performance was supported by our exposure to different geographies, our diversified customer base and the active management of gross margin and costs,” chief executive Eric Born said.
“Highlights in the period included the strong performance of our Irish businesses and completion of the platform acquisition of Salvador Escoda, whilst also returning £154.1 million to shareholders through share buybacks and dividends."
Grafton said its free cash flow was £178.2 million at the end of 2024, down from £203 million a year earlier.
The group also returned £154.1 million to shareholders through share buybacks and dividend payments in 2024. The full year dividend increased by 2.8 per cent.
Grafton said it would begin an incremental £30 million share buyback funded by strong free cash flow generated in 2024.
“Whilst the timing of recovery in certain geographies remains uncertain, the medium term outlook is positive,” Mr Born said. “We will continue to strengthen our positions in existing markets and are excited by the development opportunities ahead.”
