FTSE 250 movers: Grafton slips while Hays impresses

by | Aug 25, 2022

The FTSE 250 was down 0.19% at 19,268.37 at 1415 BST.

Shares in building materials distributor and DIY retailer Grafton fell as the company posted a jump in first-half revenues but a decline in profits as activity levels normalised following the pandemic boost.

In the six months to 30 June, revenue rose 12.2% to £1.15bn, but adjusted pre-tax profit fell 3.6% to £143.4m and adjusted operating profit was down 4.4% at £151.1m.

The company pointed out there had been a notable rise in spending on the home in the same period a year ago as people focused on increasing indoor and outdoor living space, home working and less spending in other sectors during the pandemic.

It said trading patterns normalised in all of its markets in the first half of 2022, as building materials shortages and supply chain pressures eased.

Grafton hailed an “excellent” performance in its distribution businesses in Ireland and the Netherlands. However, volumes and profitability in the Selco division fell versus last year’s “exceptional” performance, it said.

There was also a normalisation of revenue and profitability in the Woodie’s DIY, Home and Garden retail business.

The dividend was lifted 8.8% to 9.25p a share.

Chief executive Gavin Slark said: “Our first half performance saw a significant normalisation of activity levels following exceptional pandemic related spikes in trading in the first half of 2021. While inflation remains a continuing feature in our markets, we saw improved supply chain consistency as trading patterns normalised and building materials shortages eased.

“Though potential macro-economic headwinds remain, Grafton is uniquely placed to outperform given its leading market positions, geographic diversity and the relative resilience of its core repair, maintenance and improvement market. Given the strength of our brands and their market positions together with an exceptionally strong financial position, our focus remains on delivering a strong financial outcome for the year despite the uncertainties in our markets.”

On the positive side of the ledger, recruiter Hays gained as it reported a jump in first-half profit on Thursday thanks to an “excellent” fee performance across all regions amid a recovery from the pandemic.

In the six months to 30 June, operating profit rose to £210.1m from £95.1m in the same period a year ago, with net fees up 32% to £1.2bn. Analysts had been expecting operating profit of £210.5m.

The core dividend per share was lifted 134% to 2.85p and the company declared a special dividend of 7.34p a share, down a touch from 8.93p a year earlier.

Hays also said it had increased its share buyback programme by a further £18.2m, meaning it began FY23 with £75m available for buybacks.

Chief executive Alistair Cox said: “Performance in all regions was excellent. Our actions to capitalise on long-term structural opportunities, acute skill shortages and strong markets, supported by our ability to increase fee margins and the benefits of wage inflation, delivered record group fees, 24 country records and 128% operating profit growth.

“Germany, our largest business, was the biggest absolute contributor to our profit growth, while the UK & Ireland and Rest of World divisions delivered strong profit recoveries.”

RHI Magnesita and Drax all lost ground as they traded without entitlement to the dividend.

FTSE 250 – Risers

Ibstock (IBST) 196.10p 2.62%
Royal Mail (RMG) 268.10p 2.60%
BlackRock World Mining Trust (BRWM) 634.00p 2.42%
FirstGroup (FGP) 112.10p 2.37%
Baltic Classifieds Group (BCG) 141.80p 2.31%
Diversified Energy Company (DEC) 142.40p 2.30%
Carnival (CCL) 761.20p 2.20%
Hays (HAS) 117.30p 2.18%
Abrdn Private Equity Opportunities Trust (APEO) 426.00p 2.16%
Impax Environmental Markets (IEM) 464.00p 1.98%

FTSE 250 – Fallers

RHI Magnesita N.V. (DI) (RHIM) 1,796.00p -4.82%
Wood Group (John) (WG.) 137.50p -3.95%
888 Holdings (DI) (888) 133.60p -3.75%
Marks & Spencer Group (MKS) 122.85p -3.46%
Polymetal International (POLY) 206.80p -3.36%
Currys (CURY) 59.15p -2.95%
Grafton Group Ut (CDI) (GFTU) 703.10p -2.93%
Mitchells & Butlers (MAB) 161.00p -2.84%
Drax Group (DRX) 718.00p -2.78%
Bank of Georgia Group (BGEO) 2,045.00p -2.39%

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