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Nov 10 2022, 08:20 GMT
Grafton’s diversity should prove a real strength as many of its end-markets become more challenging. The diversity is evident in the spread of performance since the start of July to the end of October, ranging from a 3.4% contraction in underlying revenues in UK Distribution to near-26% growth in manufacturing (both year-on-year (yoy)). We expect little change to current year estimates and, while forecast risk for 2023 remains tilted to the downside, this is already baked into the group’s rating. We re-iterate our conviction that Grafton’s portfolio of businesses and substantial net cash resources (>£500m ex-leases) are worth far more than the group’s current market value. In addition, the recent announcement of Eric Born as CEO removes another overhang. News of a fresh £100m buyback is a further positive.
Nov 10 2022, 08:20 GMT