Grafton Group - Grafton Group - Making sense of Grafton’s outperformance

Davy Research
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We are increasingly asked what is driving Grafton’s superior top-line performance. Regularly explained as “Selco and Ireland”, there is, however, significantly more underway. In recent years, Grafton has deployed its balance sheet and effectively recycled capital to structurally improve each of its distribution businesses. Apparent now in its top-line, we expect operating profit growth to also accelerate going forward. At just 12.5x 2018 EPS, we believe current levels remain an attractive entry point. Grafton remains our top pick in the sector.