Business Irish

Tuesday 25 October 2016

Grafton Group to expand its UK reach with T Brewer deal

Paul O'Donoghue

Published 06/01/2016 | 02:30

Grafton Group
Grafton Group

Irish builders' merchanting and DIY company Grafton Group, which owns Woodie's DIY, has expanded further in the UK after completing the acquisition of T Brewer & Co Ltd.

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T Brewer is a London-based specialist timber business that trades from three branches in Clapham, Enfield and Amersham.

It generated revenue of approximately £14m (€19m) in 2015.

Grafton said the deal "extends coverage of the merchanting market in the London area and provides a further opportunity for the profitable growth of the group".

Analysts at Davy Stockbrokers viewed the deal positively, pointing out that the company has room for further acquisitions if it chooses due to the relative strength of its balance sheet. "While small, the acquisition reinforces the group's scope for further growth [or]expansion via its currently under-leveraged balance sheet," it said in a briefing note.

Goodbody analyst Darren McKinley similarly pointed out that the deal was not material given the overall size of Grafton, but said it is still a positive move for the firm.

"The acquisition is not significant in size relative to Grafton's £2.2bn in sales but further highlights Grafton's capacity to make bolt on acquisitions," he said.

The company, which in Ireland owns the Woodie's DIY and Atlantic Homecare chains, generated 75pc of its £2.08bn (€2.9bn) revenue in the UK in 2014.

In the six months to the end of June revenue increased by 7pc to £1.08bn while operating profit rose by 21pc to £61.2m. the company had a low debt to earnings ratio, reporting a pre-tax profit of £57.9m compared to net debt of £51.1m.

Irish Independent

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