Grafton Group, the building materials group that yesterday reported interim revenues of more than €1 billion and increased operating profits, has hired London broker Numis Securities to assist it with a review of its main stock exchange listing in Dublin.
Gavin Slark, its chief executive, said yesterday it was looking into the possibility of shifting its main listing to London and would have a final answer for investors within a month.
The move, if it transpires, would be another blow to the Irish Stock Exchange, which has lost several large companies in recent years. DCC and Greencore are among those to have shifted to London.
Grafton, which operates the Woodies DIY chain in Ireland and also has operations in the UK and Belgium, said if it does move its listing it will keep its administrative base in Ireland.
It also runs Chadwicks and Heiton Buckley builders’ suppliers.
“We wanted to conduct the review process out in the open,” Mr Slark said yesterday. “Over 70 per cent of our profits are derived outside of Ireland. The time is right to have a look at it.”
Grafton, which employs 2,000 staff in Ireland, yesterday reported operating profits of €68 million, although this included a one-off gain, the crystallisation in its accounts of a pension credit following a restructuring of its pension scheme.
Its underlying operating profits rose by 17 per cent to €36.6 million, while revenues climbed by 1.7 per cent €1.07 billion. The company said the increase in turnover would have been higher but for changes in the euro-sterling exchange rate.
The restructuring last year of its Woodies DIY business, which was placed into examinership to get its boom-time rents reduced, contributed almost €4 million to its retail division’s bottom line even though revenues dipped from €98 million to €94 million.
The materials supply division, which includes its UK operations Heitons and Chadwicks, contributed 89 per cent of its revenues and almost all of its profits. The company flagged a pick-up in the UK market, where house prices have begun to rise, and expects a full-year improvement in its Irish operations, helped by the hot summer.
Better weather
"It's nice to see some stability in the Irish market," said Mr Slark. "Sales were flat here but June was a really good month." He said sales of patios and other weather-dependent products at Woodies were boosted by this year's better weather.
The company has also begun to expand the product range at Woodies, and has trailed the sale of pre-assembled kitchens at three of its stores.
Robert Eason, the head of research at the company's broker Goodbody, said profits were 5 per cent ahead of its forecast. "The key variance is better profit outturns for the Irish businesses."
Grafton’s share price rose almost 6 per cent yesterday, closing at €6.49.
