Grafton Group (LON: GFTU), the Dublin-headquartered building materials distributor and DIY retailer, reported higher first-half profit and lifted its dividend on Thursday, but shares fell as markets focused on continuing weakness in Great Britain and a swing further into net debt.
Shares traded around 998.3p on the day, down roughly 1.3% from Wednesday’s close of 1,011.2p, extending a pullback from the 52-week high of 1,063p. The stock’s 52-week low stands at 788.6p.
In its half-year report published before markets opened, Grafton said revenue rose 6.7% to £1.34bn and adjusted operating profit climbed 8.2% to £98.5m, with adjusted earnings per share up 10.8% to 39.4p. The interim dividend was raised 2.3% to 11.00p, payable on 9 October. Chief executive Eric Born said the group was “pleased to have grown revenue, adjusted operating profit and margin in the first half of 2026” and reaffirmed full-year adjusted operating profit guidance of £190m to £200m, while cautioning that “the important Autumn trading season is still to come.”
The growth was not evenly spread. Profit in Island of Ireland rose 10.0% to £60.6m, helped by the Cygnum acquisition, and Iberia profit more than doubled, up 116.4% to £14.1m, aided by the Mercaluz acquisition. Great Britain, still around 28% of group revenue, told a different story: profit there fell 29.3% to £17.5m as margin dropped 160 basis points to 4.8% amid weak construction activity.
Net debt also widened, swinging to £315.2m from £147.3m a year earlier, largely reflecting funding for the Mercaluz and Cygnum acquisitions. Net cash before lease liabilities stood at £78.3m, down from £245.8m a year earlier, giving Grafton reduced but still positive headroom even as headline net debt rose.
That divergence between resilient Irish and Iberian growth and a deteriorating UK business helps explain why markets marked the shares down despite the group holding its full-year guidance and posting double-digit earnings growth, with the Autumn trading season now the next test of that outlook.