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Oct 17 2019, 06:30 IST/BST
Selco is no longer hiding in plain sight, yet its worth to Grafton arguably remains underappreciated. Our analysis suggests that Selco is easily worth £500m and delivery on its potential can increase this towards £900m. We reckon Selco’s profits can appreciate by circa 50% over time as its enlarged depot footprint matures. This in itself adds over 10% to Grafton’s earnings base. The midpoint of our Selco valuation ranges leaves the remainder of Grafton on under 6.5x EBITDA (2020 estimates). This is too low and thus provides a strong support to the investment case.
Oct 17 2019, 06:30 IST/BST