24th Jun

Grafton Group Seeks to Build on Strong Foundations of ORB

Builders' merchant and DIY group Grafton Group has today launched a retail bond offering 5.5% due 2020. 

Grafton is an independent company operating in the merchanting, retailing and mortar manufacturing markets in Britain, Ireland and Belgium. It operates 313 builders merchants and is best recognised in the UK through its brands Buildbase, Jackson and Selco. 

The Group posted a strong performance in 2012 with revenue up 6% to €2.2 billion and underlying operating profit up 33% to €72.9 million from €54.7 million   

Its dividend was up by 13% for the year to 8.5 cent including a second interim dividend of 5.5 cent   

Announcing its 2012 results CEO, Gavin Slark, said ‘in 2012 the Group delivered good profit growth despite challenging conditions in its markets. The positive outcome for the year demonstrates the benefits of the restructuring and self-help measures implemented over the past eighteen months’ 

The Sterling denominated bonds will be issued by its wholly-owned subsidiary, Grafton Group Finance, and guaranteed by Grafton and certain of its subsidiaries. The bonds bear a fixed interest rate of 5.5% per annum and will be payable semi-annually to holders on 15 January and 15 July each year. 

The minimum initial investment is £2,000 and the bonds can be bought and sold at their face value of £1,000 plus increments of £100 in excess of £1,000 thereafter.

Of the issue Slark said: "The group is pleased to launch its first listed retail bond as part of its strategy of diversifying its sources of funding and extending the maturity profile of its debt." 

Authorised distributors of the bond are Barclays Stockbrokers, Brown Shipley, Goodbody Stockbrokers, Redmayne Bentley, and Smith & Williamson. 

Talos Securities will be able to sell the bond to existing customers of retail arm, Selftrade. 

Following the conspicuous success of the recent issue by property investment and development company Helical Bar, the Grafton issue could see total funds raised on ORB in 2013 nudge half a billion pounds. 

Grafton Group shares closed down 2.45% on the day at €5.17;

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