Friday, January 2 2009
ISEQ Company Analysis
Grafton Group plc
Price
NCB Recommendation
19-JAN-2006
Buy
¿ 228c
Price %Change
1 Mth
Qtr
3 Mth
6 Mth
1 Yr
Ytd
Act
Rel
4.4
-1.3
6.8
-4.6
-30.6
8.0
-25.4
24.8
-57.9
7.3
-1.3
-4.6
Price History
2009
2008
2007
2006
Low
31-Dec
High
550
228
n/a
627
207
231
1,288
520
540
1,266
909
1,266
Mkt Cap (m)
No of Shrs (m)
Weighting(%)
Free Float(%)
533.1
234.3
1.9
90.0
Bloomberg:
GRFT ID
Reuters:
GRF.I
Primark:
13322
Sedol:
B00MZ44
Analyst:
John Sheehan
e-mail:
john.sheehan@ncb.ie
Web:
December
13-Sep-2007
13-Sep-2007
05-Mar-2007
12-Apr-2007
09-May-2007
Financial Calendar
Finals Due
Year End
Interim Due
Ex Interim Div (xp
Next AGM
Ex Finals Div (xp)
www.graftonplc.com
Period to December
2006
2007
2008f
2009f
Profit & Loss Account
Turnover
2,933.9
3,205.0
2,850.6
2,985.0
n/a
Gross Profit
991.7
1,083.3
963.5
1,008.9
n/a
Operating Profit
244.9
265.8
206.6
235.4
n/a
Associates
n/a
n/a
n/a
n/a
n/a
Interest
-31.4
-35.0
-34.3
-31.0
n/a
Goodwill Charges
-2.2
-2.2
-2.2
-2.2
n/a
Exceptionals
38.0
7.3
n/a
n/a
n/a
PER SHARE (c)
2005
2004
2006
2007
2008f
2009f
Sales p.s.
1,112.3
879.4
1,231.2
1,346.1
1,234.0
1,286.6
n/a
EPS (c) - FRS3
70.3
59.1
91.1
86.2
63.5
74.2
n/a
EPS (c) - Norm
67.8
56.1
78.0
84.3
64.4
75.2
n/a
EPS Growth (%)
20.9
24.4
15.0
8.1
-23.6
16.8
Cash EPS
75.2
68.5
86.5
108.1
90.0
101.9
n/a
Capex p.s.
28.7
26.7
19.6
34.6
43.3
43.1
n/a
Depreciation p.s.
20.4
16.1
22.3
23.9
25.5
26.7
n/a
NAV p.s.
367.4
239.7
443.1
487.0
523.6
570.5
n/a
Net DPS
15.8
13.0
18.8
22.0
24.2
26.6
n/a
Pretax Profit
2009f
2008f
2005
2004
2006
2007
VALUATIONS
249.4
235.8
170.1
202.2
n/a
Tax
EV/Revenues
0.4
0.5
0.4
0.3
0.4
0.3
-32.4
-30.7
-23.5
-30.0
n/a
Minority/Other
EV/EBITDA
4.2
4.6
3.6
3.4
3.9
3.2
n/a
n/a
n/a
n/a
n/a
PER x
3.4
4.1
2.9
2.7
3.5
3.0
Net Income
Gr. Yld %
6.9
5.7
8.3
9.7
10.6
11.7
n/a
217.0
205.2
146.6
172.2
n/a
P/NAV x
0.6
0.9
0.5
0.5
0.4
0.4
EPS (c) - FRS3
91.1
86.2
63.5
74.2
n/a
EPS (c) - Norm
Geographic Profit Split
78.0
84.3
64.4
75.2
n/a
Gross Margin (%)
33.8
33.8
33.8
33.8
n/a
Operating Margin (%)
8.3
8.3
7.2
7.9
n/a
Tax Rate (%)
13.0
13.0
14.0
15.0
n/a
Interest Cover (x)
7.8
7.6
6.0
7.6
n/a
Dividend Cover (x)
4.2
3.8
2.7
2.8
n/a
Average Shares (m)
238.3
238.1
231.0
232.0
n/a
Period to December
2006
2007
2008f
2009f
Goodwill written back
n/a
37.8
40.0
42.2
44.4
Other Intangibles
n/a
631.0
639.2
637.0
634.8
Fixed Assets
n/a
686.2
703.7
744.7
782.7
Financial Assets
n/a
0.4
0.9
0.9
0.9
Working Capital
n/a
435.3
466.1
466.1
466.1
Other Debtors/Creditors
n/a
-99.7
-115.8
-115.8
-115.8
Total Capital Employed
0.0
1,691.0
1,734.1
1,775.1
1,813.1
Net Cash/(Debt)
n/a
-550.9
-550.4
-496.7
-420.4
Other L.T Liabilities
n/a
-75.3
-63.6
-63.6
-63.5
Net Capital Employed
0.0
1,064.8
1,120.1
1,214.8
1,329.2
Net Debt/Equity (%)
n/a
52.4
49.7
41.3
31.9
ROACE (%)
n/a
15.2
15.5
11.8
13.1
ROAE (%)
n/a
19.6
18.6
12.9
13.8
Sales/Fixed Assets (x)
n/a
4.3
4.6
3.8
3.8
Working Capital/Sales (mths)
n/a
1.8
1.7
2.0
1.9
Year-end Shares (m)
n/a
240.3
230.0
232.0
233.0
Description/Activities
Balance Sheet
Grafton is engaged in builders and plumbers merchanting as well as
DIY retailing and the manufacture of selected building products.
It is the clear market leader in Irish merchanting and retail DIY. The
Group trades from almost 400 locations in the UK & is the 4th largest
player in the merchanting market with a share of c. 9%. Grafton has
reported impressive growth, both organic and acquisitive, over many
years, with 10-year compound growth in EPS of 24%.
Strategic Issues & Valuations
The Group is guiding FY 07 adj. EPS of in-line or just below consensus
86c.The Irish merchanting business experienced a tough H2 as residenti
construction slowed. There were also signs of tighter mortgage growth
in the UK. Howver, the Group's focus on the less cyclical RMI sector
with stable non-resi. markets leaves it less exposed to a significant
residential construction slowdown. Current rating of 7.7 x 08 EPS is
attractive given the diversified and proven business model.
20-Dec-2006
Last Review Date:
Last NCB Report:
13-Sep-2006
Divisional Profit Split
Cash Flow
Period to December
2006
2007
2008f
2009f
Operating Profit
244.9
265.8
206.6
235.4
n/a
Depreciation
53.2
56.8
59.0
62.0
n/a
Change in Working Capital
-26.1
-14.4
n/a
n/a
n/a
Other/FX
-20.2
-4.3
n/a
n/a
n/a
Operating Cash Flow
251.8
303.9
265.6
297.4
0.0
Cost of Debt
-31.0
-36.0
-34.3
-31.0
n/a
Tax Paid
-14.6
-10.6
-23.5
-30.0
n/a
Net Capex
-46.7
-82.5
-100.0
-100.0
n/a
Free Cash Flow
159.5
174.8
107.8
136.4
0.0
Dividends Paid
-39.9
-49.0
-56.1
-62.0
n/a
Equity Issued
4.0
-70.3
2.0
2.0
n/a
Acquisitions/Disposals
-87.1
-77.1
n/a
n/a
n/a
Other/Translation
-3.0
22.2
n/a
n/a
n/a
Change in Cash/(Debt)
33.5
0.6
53.7
76.4
0.0
Interest Cash Cover (x)
8.1
8.4
7.7
9.6
n/a
Dividend Cash Cover (x)
4.0
3.6
1.9
2.2
n/a
M. Chadwick
F. Malone
C. O'Nuallain
A. Collins
G. Bowler
L. Martin
Last 6 mths
21,878K
521K
10.2%
817K
10.4%
390K
132K
184K
BIAM/IBI
Chadwick Family
Major Shareholdings
Director Holdings
Under 1 Year
1 - 5 Years
Long Term
Net Debt Structure (Last AR)
-93.8
386.5
45.5
* Relative Performance is stock absolute performance minus ISEQ absolute performance unadjusted for currency changes. * EV = Mkt Cap +/- Debt or Cash
P/NAV
EV/EBIT
EV/EBITDA
PSR
Gr. Yield
%
Norm EPS
c
EPS Growth
%
PER
PEG
Growth Screens
(12 MR)
Value Screens (Last AR)
0.4
5.0
3.9
0.2
n/a
10.6
