Grafton Group PLC (GFTU_u.L): Post CMD model update: Medium-Term Value Creation Despite Near-Term Headwinds

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Grafton Group PLC (GFTU_u.L): Post CMD model update: Medium-Term Value Creation Despite Near-Term Headwinds

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18 Jun 2026 08:25:01 ET │ 13 pages

Grafton Group PLC (GFTU_u.L)

Post CMD model update: Medium-Term Value Creation Despite Near-

Term Headwinds

CITI’S TAKE Buy

Grafton flagged a more challenging backdrop emerging in March–April, Price (18 Jun 26 08:05) £8.95

with rising geopolitical uncertainty after a resilient start to the year. The

Target price £11.00↓ group now expects 3–5% price inflation in FY2026, with certain categories

seeing double-digit increases, driving pricing above initial expectations. from £11.50

While underlying market growth is conservatively assumed at ~2.5–3% Expected share price return 22.9%

CAGR (2025–2030) before self-help measures, near-term trading remains Expected dividend yield 4.2%

pressured by a weaker Great Britain market, where construction activity is Expected total return 27.2%

set to contract. The completed Cygnum and Mercaluz acquisitions should Market Cap £1,689M

provide partial mitigation. Regionally, the group expects margin recovery US$2,268M

in Great Britain and Northern Europe (>9%), stable high returns in Ireland

(~10%), and strong growth in Iberia (8–10% margins) to 2030. FY2026

adjusted operating profit is guided at £190m–£200m, Over 2026-2030,

management targets >£850m cumulative, >10% EPS CAGR (2025–2030), Ephrem RaviAC

and ~13% ROCE by 2030, while maintaining investment-grade leverage +44-20-7986-2462

(1–2x net debt/EBITDA) and a disciplined, balanced capital allocation ephrem.ravi@citi.com

strategy. Omnath Sinh

+91-22-4277-5027

Regional growth and 2030 outlook — Ireland is poised for continued growth, driven omnath.sinh@citi.com

by organic expansion, specialist M&A, and entry into high-growth segments, with