Grafton's chairman and chief operating officer to step down
Outgoing executive chair Michael Chadwick's estimated stake in company
MICHAEL Chadwick, the long-standing executive chairman of Grafton Group, is to step down from his role in the summer after the company announced that a chief executive has been appointed to succeed him.
The chief operating officer at Grafton, Leo Martin, also confirmed that he'll retire at the end of the year.
The low-key Mr Chadwick (59) joined the building materials group in 1975 and has been executive chairman since 1985. He has helped to steer the company, which owns chains such as Woodies DIY and Atlantic Homecare, through a tough recessionary period by slashing costs and reducing its workforce. He'll remain as non-executive chairman at Grafton.
The group said that Gavin Slark (45), who was chief executive of UK-based plumbing and heating merchants firm BSS when it was acquired by rival Travis Perkins last year in a £558m (€654m) deal, will join Grafton as chief executive designate on April 1 and will assume his full position on July 1.
In a statement, Grafton Group said that Mr Slark had maintained revenue growth, strong profitability and cash generation at BSS throughout the recession, while at the same time maintaining or increasing the firm's dividend.
Mr Chadwick, who owns 8.5pc of Grafton -- a stake currently valued at €69m -- said in the statement that he was pleased to appoint a group chief executive of Mr Slark's calibre.
Mr Chadwick, who declined to comment directly yesterday, has waived over €1m in salary and bonuses and a €307,000 pension entitlement over the past decade or so at the firm, which began life as Chadwicks in 1902 when it was founded by Michael Chadwick's grandfather.
A family trust overseen by Mr Chadwick also has shares valued at over €10m.
Grafton Group, which also owns Heitons, derives about 70pc of its revenue from the UK, where it owns outlets such as Plumbase, Buildbase and Jacksons. In total, it operates nearly 600 outlets across Ireland and the UK and employs about 9,000 people.
Last November, Grafton said in its latest trading update that total revenue for the first 10 months of the 2010 financial year was €1.7bn, with profitability having been "well ahead" during the third quarter compared to the corresponding period in 2009. It added that its Irish merchanting arm had also returned to a break-even position.
Investors welcomed the announcement of Mr Slark's appointment yesterday, with shares in Grafton rising 3.6pc to close at €3.55.
Analyst Barry Dixon at Davy Stockbrokers said that Mr Slark has a "tough act to follow" given Mr Chadwick's achievements.