Grafton Group sees profit growth but warns of impact from Iran war

(Sharecast News) - Construction products distributor Grafton Group said it delivered a "resilient" start to 2026 and guided to an improvement in profits this year, but warned that rising cost pressures due to the Iran war could dent market demand and volumes.

Reported revenues were up 3.2% year-on-year at £830.1m over the first four months of the year, though average daily like-for-like sales were unchanged as declines across the UK offset growth elsewhere.

Grafton said it delivered a "robust performance" in Iberia, alongside more modest sales growth in Ireland and Northern Europe, though this was fully offset by weaker trading in Great Britain due to a further weakening in construction markets.

Wet weather had a negative impact on GB activity during the period, along with rising cost inflation and weaker consumer confidence linked to the conflict in the Middle East.

Grafton said it is actively managing supply chain risks arising from the conflict in the Middle East, with high levels of stock available for customers, though some inflationary pressures are being starting to creep through due to supplier price increases and higher fuel costs.

"Against this backdrop, focus remains firmly on disciplined cost control and margin management," the company said.

Nevertheless, the firm still expects to at least meet market expectations for profits this year, as recent acquisitions of Mercaluz in Spain and Cygnum in Ireland outweigh weaker trading in Great Britain. Full-year adjusted operating profit is now expected to be around £190m-200m, compared with £190.2m in 2025 and the current consensus forecast of £190.8m.

See latest RNS on Investegate.