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Investing.com -- Shares of Grafton Group plc (LON:GFTU_u) dropped more than 6% on Thursday following a slowdown in trading momentum despite first-half results coming in line with expectations.
The building materials distributor reported £1.25 billion in revenue for the six months ended June, a 10% increase from the prior year. Like-for-like sales grew 2.4%, slightly below Stifel’s estimate of 2.6%. Analysts at Stifel said growth slowed marginally in May and June.
The performance was strongest in Ireland, where like-for-like revenue rose 3.7% in distribution and 7.6% in retail. Sales in Spain and the Netherlands increased 6.9% and 2.8%, respectively.
The United Kingdom (TADAWUL:4280) posted 0.2% growth, supported by pricing amid continued volume weakness.
Finland declined 4.2%, though the brokerage said management changes could support improvement. Manufacturing grew 5.2% due to increased build rates by housebuilders.
Stifel reiterated its “buy” rating on the stock and kept the 1,175p price target, which represented an 18.1% upside to the July 9 closing price of 995p.
The note said Grafton’s first-half results were in line with both consensus and its own forecast. It added that management does not expect volume growth in 2025 and will monitor summer trading patterns.
The company, which operates in the U.K., Ireland, the Netherlands, Finland and Spain, has 45% of its revenue coming from Ireland and Spain.
Stifel cited exposure to these markets, along with a strong balance sheet and recent acquisitions, in maintaining its rating.