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Investment giant Blackrock cuts stake in builders merchanting firm Grafton Group

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Gavin Slark, CEO of the Grafton Group

Gavin Slark, CEO of the Grafton Group

Gavin Slark, CEO of the Grafton Group

US investment giant Blackrock has significantly cut its stake in merchanting firm Grafton, having offloaded nearly 4m shares to bring its holding to 4.4pc.

Stock Exchange filings show that Blackrock has cut its stake from a previously reported 14.07m shares in Grafton, which in Ireland operates retail outlets such as Woodies and Atlantic Homecare.

Blackrock said it now owns just over 10.2m shares in Grafton, or 4.4pc of its stock. At the beginning of March, Blackrock had owned 6.5pc of Grafton, or 15.1m shares, later increasing it to 16.2m. It cut it during the summer to 13.3m.

Just last month, Blackrock increased its holding in Grafton from 13.3m shares to 14.07m.

It reduced its stake to the current level just days after Grafton released an interim management statement last week.

That interim report showed that Grafton's revenue in the 10 months to the end of October rose 10.1pc to £1.76bn (€2.2bn), boosted by strong demand in the UK in particular.

It said the pace of growth had moderated in the four months to the end of October, however.

The company, headed by chief executive Gavin Slark, generates about three-quarters of its business in the UK, where new housing and increased business in the repair, maintenance and improvement segment had resulted in increased turnover. It owns chains such as Plumbase and Buildbase in the UK.

Grafton also said it had seen a "marked" improvement in its merchanting business in Ireland, where it owns the Chadwicks and Heiton chains.

On a constant currency basis, Grafton's revenue in the Irish merchanting division rose 11.7pc in the 10 months to the end of October, but was up 6.1pc in sterling terms.

Shares in Grafton, which are listed in the UK, were down over 1pc yesterday morning at £6.23 and are down 1.1pc over the past year.

Earlier this week, Germany's Berenberg Bank increased its price target on Grafton's shares from £6.20 to £6.90.

Last week, Goodbody Stockbrokers reiterated its 'buy' recommendation on Grafton stock.

Other major shareholders in Grafton include Investec, which controls just under 13pc of the company, and Franklin Templeton, which controls just under 11pc.

EdgePoint Investment Group controls slightly more than 4pc.

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