635400BE9SBAG61DJ9632025-01-012025-12-31iso4217:GBP635400BE9SBAG61DJ9632024-01-012024-12-31iso4217:GBPxbrli:shares635400BE9SBAG61DJ9632025-12-31635400BE9SBAG61DJ9632024-12-31635400BE9SBAG61DJ9632023-12-31635400BE9SBAG61DJ9632024-12-31ifrs-full:IssuedCapitalMember635400BE9SBAG61DJ9632024-12-31ifrs-full:SharePremiumMember635400BE9SBAG61DJ9632024-12-31ifrs-full:CapitalRedemptionReserveMember635400BE9SBAG61DJ9632024-12-31ifrs-full:RevaluationSurplusMember635400BE9SBAG61DJ9632024-12-31graftongroupplc:SharesToBeIssuedReserveMember635400BE9SBAG61DJ9632024-12-31ifrs-full:ReserveOfCashFlowHedgesMember635400BE9SBAG61DJ9632024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember635400BE9SBAG61DJ9632024-12-31ifrs-full:RetainedEarningsMember635400BE9SBAG61DJ9632024-12-31ifrs-full:TreasurySharesMember635400BE9SBAG61DJ9632025-01-012025-12-31ifrs-full:IssuedCapitalMember635400BE9SBAG61DJ9632025-01-012025-12-31ifrs-full:SharePremiumMember635400BE9SBAG61DJ9632025-01-012025-12-31ifrs-full:CapitalRedemptionReserveMember635400BE9SBAG61DJ9632025-01-012025-12-31ifrs-full:RevaluationSurplusMember635400BE9SBAG61DJ9632025-01-012025-12-31graftongroupplc:SharesToBeIssuedReserveMember635400BE9SBAG61DJ9632025-01-012025-12-31ifrs-full:ReserveOfCashFlowHedgesMember635400BE9SBAG61DJ9632025-01-012025-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember635400BE9SBAG61DJ9632025-01-012025-12-31ifrs-full:RetainedEarningsMember635400BE9SBAG61DJ9632025-01-012025-12-31ifrs-full:TreasurySharesMember635400BE9SBAG61DJ9632025-12-31ifrs-full:IssuedCapitalMember635400BE9SBAG61DJ9632025-12-31ifrs-full:SharePremiumMember635400BE9SBAG61DJ9632025-12-31ifrs-full:CapitalRedemptionReserveMember635400BE9SBAG61DJ9632025-12-31ifrs-full:RevaluationSurplusMember635400BE9SBAG61DJ9632025-12-31graftongroupplc:SharesToBeIssuedReserveMember635400BE9SBAG61DJ9632025-12-31ifrs-full:ReserveOfCashFlowHedgesMember635400BE9SBAG61DJ9632025-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember635400BE9SBAG61DJ9632025-12-31ifrs-full:RetainedEarningsMember635400BE9SBAG61DJ9632025-12-31ifrs-full:TreasurySharesMember635400BE9SBAG61DJ9632023-12-31ifrs-full:IssuedCapitalMember635400BE9SBAG61DJ9632023-12-31ifrs-full:SharePremiumMember635400BE9SBAG61DJ9632023-12-31ifrs-full:CapitalRedemptionReserveMember635400BE9SBAG61DJ9632023-12-31ifrs-full:RevaluationSurplusMember635400BE9SBAG61DJ9632023-12-31graftongroupplc:SharesToBeIssuedReserveMember635400BE9SBAG61DJ9632023-12-31ifrs-full:ReserveOfCashFlowHedgesMember635400BE9SBAG61DJ9632023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember635400BE9SBAG61DJ9632023-12-31ifrs-full:RetainedEarningsMember635400BE9SBAG61DJ9632023-12-31ifrs-full:TreasurySharesMember635400BE9SBAG61DJ9632024-01-012024-12-31ifrs-full:IssuedCapitalMember635400BE9SBAG61DJ9632024-01-012024-12-31ifrs-full:SharePremiumMember635400BE9SBAG61DJ9632024-01-012024-12-31ifrs-full:CapitalRedemptionReserveMember635400BE9SBAG61DJ9632024-01-012024-12-31ifrs-full:RevaluationSurplusMember635400BE9SBAG61DJ9632024-01-012024-12-31graftongroupplc:SharesToBeIssuedReserveMember635400BE9SBAG61DJ9632024-01-012024-12-31ifrs-full:ReserveOfCashFlowHedgesMember635400BE9SBAG61DJ9632024-01-012024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember635400BE9SBAG61DJ9632024-01-012024-12-31ifrs-full:RetainedEarningsMember635400BE9SBAG61DJ9632024-01-012024-12-31ifrs-full:TreasurySharesMember
Annual
Report and
Accounts
2025
Strategic Report
2 Financial highlights
3 Our business at a glance
4 Year in review
5 Our main brands
7 Our purpose and values
8 Our strategy
9 Business model
10 Investment case
11 Chair’s statement
13 Chief Executive Officer’s statement
17 Key performance indicators
19 Stakeholder engagement
21 Our values in action
23 Regional overview
23 Island of Ireland
25 Great Britain
26 Northern Europe
27 Iberia
28 Financial review
31 Risk management
39 Viability statement
Grafton Group plc
is a European multinational
distributor of construction
related products and solutions.
Sustainability Statement
43 2025 highlights
44 CEO and CFO introduction
45 General disclosures
46 Sustainability at Grafton
47 Materiality assessment
49 Our value chain
50 Environmental disclosures
52 Climate change
56 Resource use and circular economy
59 Social disclosures
61 Own workforce
65 Workers in the value chain
66 Consumers and end users
67 Governance disclosures
69 Assurance Report
Corporate Governance
71 Chair’s introduction
72 Board of Directors
74 Our Group Management Team
75 Governance framework
76 Directors’ Report on Corporate Governance
81 Audit and Risk Committee Report
84 Nomination Committee Report
87 Remuneration Committee Report
91 Remuneration Policy Report
100 Annual Report on Remuneration
112 Report of the Directors
Financial Statements
115 Directors’ responsibilities statement
116 Independent Auditors’ Report
126 Group Income Statement
127 Group Statement of Comprehensive
Income
128 Group Balance Sheet
129 Group Cash Flow Statement
130 Group Statement of Changes in Equity
132 Notes to the Group Financial Statements
182 Company Balance Sheet
183 Company Statement of Changes in Equity
184 Notes to the Company Financial
Statements
Supplementary Information
191 Supplementary Financial Information
195 Financial History
197 Corporate Information
197 Financial Calendar
197 Annual General Meeting 2026
198 Glossary of Terms
Contents
1
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial highlights
Group revenue +10.4%
£2.52bn
2024: £2.28bn
Dividend for the year
+2.0%
37.75p
2024: 37.0p
Adjusted operating profit
(i)
+7.1%
£190.2m
2024: £177.5m
Net cash (before IFRS 16 leases)
+£1.9m
£274.0m
2024: £272.1m
Adjusted operating profit margin
(i) (ii)
-30bps
7.3%
2024: 7.6%
Adjusted returns on capital employed
(i)
+60bps
10.9%
2024: 10.3%
Free cash flow
-5.6%
£168.3m
2024: £178.2m
Adjusted earnings per share – basic
(i)
+5.1%
75.4p
2024: 71.8p
2
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Statutory highlights
Statutory operating profit +14.6%
£174.8m
2024: £152.6m
Net (debt)
+£8.3m
(£123.4m)
2024: (£131.7m)
Statutory operating profit margin
+20bps
6.9%
2024: 6.7%
Statutory earnings per share – basic
+15.4%
70.3p
2024: 60.9p
(i) The term ‘Adjusted’ means before exceptional items, amortisation of intangible assets arising on acquisitions and acquisition related items in both years.
Other ‘Alternative Performance Measures’ (APMs) are detailed on pages 191 to 194.
(ii) Before property profit.
Financial highlights
Grafton Group is a European multinational
distributor of construction related products
and solutions comprising four geographic
segments serving the Island of Ireland,
Great Britain, Northern Europe and Iberia.
In our home Irish market, we also operate
the leading home improvement retailer.
Island of Ireland Great Britain Northern Europe Iberia
Number of branches/
stores 122 2024: 115 122 2024: 122 136 2024: 140 93 2024: 92
Revenue
£1,071.6m 2024: £1,016.2m £765.4m 2024: £767.0m £469.7m 2024: £469.3m £212.9m 2024: £29.7m
Adjusted operating
profit*
£111.0m 2024: £107.5m £49.2m 2024: £46.4m £29.6m 2024: £35.3m £13.6m 2024: £0.3m
Adjusted operating
profit margin
10.4% 2024: 10.6% 6.4% 2024: 6.0% 6.3% 2024: 7.5% 6.4% 2024: 1.1%
Brands
Our business
at a glance
* Before property profit of £5.9m (2024: £4.0m) and central activity costs of £19.1m (2024:£16.0m).
3
Grafton Group plc
Annual Report and Accounts 2025
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Year in review
July
Chadwicks unveils refurbished Sallynoggin branch
Chadwicks Sallynoggin, Dublin reopens after a major
refurbishment, another milestone in its nationwide rebrand and
upgrade programme. With over 2,000 new products, specialist
centres and a food outlet, the transformation delivers smarter
solutions and greater choice for customers across Ireland.
November
Selco introduces permanent price cuts on core building
materials
In November, Selco reinforced its commitment to delivering great
value for customers by reducing prices on 357 of its most
frequently purchased building materials. The new prices, available
both in branch and online, are permanent rather than a
promotional offer, helping tradespeople manage costs with
greater confidence.
June
Anu Ora appointed Chief Executive Officer of IKH
Anu is a highly experienced senior leader with broad expertise
in Finland’s food retail sector and automotive parts industry.
Earlier in her career, she spent 12 years with The Boston
Consulting Group, specialising in supply chain and growth
strategy across the Nordic region.
February
Woodie’s joins A.R.E.N.A. Alliance
In February, Woodie’s joined the A.R.E.N.A. Alliance, an
international group of leading DIY distributors from Europe and
Canada. This partnership provides Woodie’s with access to
high-quality products at competitive prices, enhancing their
product range through collective buying power and expertise.
May
Grafton acquires HSS Hire Ireland
Grafton acquires HSS Hire Ireland, a leading tool and equipment
hire specialist operating from eight locations across the Republic
of Ireland. The business joined Chadwicks Group, complementing
its Sam Hire brand and enabling a full-service national hire
offering for projects from DIY to large civil works. The acquisition
supports Chadwicks’ strategy to broaden its capabilities in
adjacent product categories.
December
Leyland SDM opens its 36th Store in Tower Bridge Rd, London
The opening of the new store represents a substantial investment
in the area and continues to demonstrate Leyland SDM’s ongoing
commitment to supporting local tradespeople, DIY enthusiasts
andthe wider community.
4
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Annual Report and Accounts 2025
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Great Britain
Number of branches/stores
122
2024: 122
Revenue -0.2%
£765.4m
2024: £767.0m
2024
2023
2022
2021
2025
£ 76 7. 0 m
£0.00bn
£0.00bn
£0.00bn
£765.4m
Selco is a trade and business only distributor of building materials that
operates a retail style self-select format. Trading from 74 branches in
Great Britain, including 32 in London, it is primarily focused on trade
customers engaged in small residential repair maintenance and
improvement (RMI) projects.
selcobw.com
Leyland SDM is one of the most recognisable and trusted decorating
and DIY brands in Central London where it distributes paint, tools,
ironmongery and accessories from 36 stores.
leylandsdm.co.uk
TG Lynes is a distributor of materials and plant for mechanical services,
heating, plumbing and air movement, operating from a distribution centre
in Enfield, North London.
tglynes.co.uk
CPI EuroMix is the market leader in dry mortar manufacturing in Great
Britain, operating from ten strategically located factories that provide
almost national coverage and principally supplies mortar to new
housebuilding developments.
cpieuromix.com
StairBox is an industry leading manufacturer and distributor of bespoke
wooden staircases and windows operating from a state-of-the-art
production facility in Stoke-on-Trent, England, where it also operates
under the Wooden Windows brand.
stairbox.com
Island of Ireland
Number of branches/stores
122
2024: 115
Revenue +5.4%
£1,071.6m
2024: £1,016.2m
2024
2023
2022
2021
2025
£1,016.2m
£0.00bn
£0.00bn
£0.00bn
£1,071.6m
Chadwicks Group is Ireland’s leading distributor of building materials
operating from 64 locations in the Republic of Ireland under the
Chadwicks, The Panelling Centre, Davies, Cork Builders Providers,
Heiton Steel, Telfords, Proline, Sitetech and HSS Hire Ireland brands.
chadwicksgroup.ie
Woodie’s is Ireland’s market leading DIY, Home and Garden retailer
with 35 stores nationwide and online offering an extensive range of DIY
products, paints, lighting, homestyle, housewares, bathroom products
and kitchens. Woodie’s is also a leading retailer of seasonal categories
including gardening and Christmas ranges.
woodies.ie
MacBlair is the leading distributor of building materials in Northern
Ireland, trading from 23 locations under the MacBlair, Doorways,
Watershed and Wood Floor Warehouse brands.
macblair.com
Our main brands
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Annual Report and Accounts 2025
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Our main brands continued
Northern Europe
Number of branches/stores
136
2024: 140
Revenue +0.1%
£469.7m
2024: £469.3m
2024
2023
2022
2021
2025
£469.3m
£0.00bn
£0.00bn
£0.00bn
£469.7m
Our Netherlands business, trading as Isero and Polvo, is the No. 1
specialist distributor of tools, ironmongery and fixings in the
Netherlands trading from 121 branches and offering a
comprehensive range of quality products totrade professionals
supported by an exceptional level of customerservice.
isero.nl polvobv.nl
IKH is a leading distributor of workwear and personal protective
equipment (PPE), tools, spare parts and accessories in Finland
where it distributes its products through a network of independently
operated IKH partner stores, third-party distributors and 15
owned-stores.
ikh.fi/en
Group performance
Group revenue by segment
£2.52bn
2024: £2.28bn
  Island of Ireland: 42.5% (2024: 44.5%)
  Great Britain: 30.4% (2024: 33.6%)
  Northern Europe: 18.6% (2024: 20.6%)
  Iberia: 8.5% (2024: 1.3%)**
Adjusted operating profit by sector excluding central activities*
£203.4m
2024: £189.5m
  Island of Ireland: 54.6% (2024: 56.7%)
  Great Britain: 24.2% (2024: 24.5%)
  Northern Europe: 14.6% (2024: 18.6%)
  Iberia: 6.6% (2024: 0.2%)**
* Before central activity costs of £19.1m (2024: £16.0m) and before property profit of £5.9m (2024: £4.0m).
Other Alternative Performance Measures (APMs) are detailed on pages 191 to 194.
** Grafton acquired Salvador Escoda on 30 October 2024.
Iberia
Number of branches/stores
93
2024: 92
Revenue
£212.9m
2024: £29.7m
2024
2023
2022
2021
2025
£29.7m
£0.00bn
£0.00bn
£0.00bn
£212 .9m
Salvador Escoda, acquired on 30 October 2024, is one of Spain’s
leading distributors of air conditioning, ventilation, heating and
refrigeration products. Headquartered in Barcelona, with over 50
years of trading history, the business operates from 93 branches
and4 distribution centres covering the whole of Spain.
salvadorescoda.com
6
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Annual Report and Accounts 2025
02-42
Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
+ Read more on pages 21 and 22
Our Purpose: Building progress together
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Our
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Our
communities
and the
environment
Our
suppliers
Our
shareholders
Our
colleagues
Our
customers
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Our purpose and values
Building progress together
Our purpose reflects what we do and what we stand for as a business.
It is about our passion for progress, for the benefit of all our stakeholders.
For our customers:
by delivering a high-quality and efficient service, providing
product choice and innovation, and building strong and
enduring customer relationships.
For our shareholders:
by focusing on building a strong and resilient business
tocreate sustainable shareholder value.
For our people:
by providing a pathway for colleagues to develop, looking
after theirsafety and wellbeing, providing fair reward and
being a great place to work.
For our communities and the environment:
by operating ethically and responsibly, reducing our
environmental impact and giving back to our
localcommunities.
For our suppliers:
by building trusted, long-term partnerships focused on
mutual growth and joint innovation to drive product quality
and sustainability.
7
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Annual Report and Accounts 2025
02-42
Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Our strategy is based on What sets us apart Our structured approach to capital allocation
Strong market positions:
Building and maintaining a strong portfolio of
brands in geographies with long term growth
characteristics which are expected to exceed the
growth rate of their underlying economies.
Core geographic focus:
ournear-termfocus is on reinforcing existing
market positions while building a pipeline of new
geographic opportunities for longer-term growth.
Federated operating model:
clear local accountability, supported by a
performance-led management regime and
shared Group expertise.
Geographical diversification:
Our international presence providesgreater
resilience than a focus on a single country.
Customer focus:
we ensure that our predominantly trade
customers get the products and solutions
they want, when they want them.
Highly cash generative:
the Group’s capacity to turn its profits into
free cash flow is an underlying strength.
Financial discipline:
we aim to maintain our investment grade
credit rating (max financial leverage of
2.0 Net Debt/EBITDA).
Our capital allocation priorities are as follows:
1
Strengthening our existing business and
investing capital to fund organic growth.
2
Maintaining core dividend at cover of
2-3 times earnings.
3
Funding inorganic growth with a focus
on long-term shareholder value creation.
4
Returning surplus capital to shareholders
through share buybacks or special dividends.
Our long-term ambition is to be the leading European multinational distributor of construction related products and solutions
Our strategy
Our strategy for growth
8
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Annual Report and Accounts 2025
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Strategic Report
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Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Business model
Our operating model How we add value Outputs
Focus on building materials and
construction related products
Our businesses deliver value through regional and
national branch networks of market-leading brands.
Weprimarily serve small and medium-sized contractors
and installers active in residential repair, maintenance
and improvement (RMI) and new-build markets.
Geographic diversity
We operate in four geographical areas: Island of
Ireland, Great Britain, Northern Europe and Iberia
which provides resilience by reducing dependence
onany single location.
Federated structure
We operate a federated structure with clear local
accountability overseen by a performance-led
management regime, using our core operational
skills and knowledge to drive optimal outcomes from
each of our operating businesses.
Capital allocation
Disciplined approach to deliver long term value for
shareholders and a clear framework for capital allocation.
Differentiated local brands
We operate differentiated brands with strong local
management teams that have the relevant skills and
experience to deliver our strategy.
Service excellence
Commitment to excellence in service for our
customers who are primarily trade customers.
Power of the Group
Central subject matter experts and cross-business
resources allow us to leverage economies of scale,
synergies and expertise to support key initiatives in
existing businesses and the development of newly
acquired businesses.
Financial discipline and ambition
We target sustainable growth through the cycle to
maintain our investment grade credit rating, support
our programme of growth and provide sustained
shareholder returns.
Market leadership
Strengthening our market positions in our existing
geographies: Island of Ireland, Great Britain, Northern
Europe and Iberia.
Cyclical resilience
Strong financial structure and geographic
diversification tomitigate volatility.
Industry leading margins & returns
Supported by operational excellence and
disciplined capitalallocation.
Financial growth
Achieving growth in earnings per share through
organic development, M&A, best practice replication
and sound capital allocation.
We build value through local
strength and expertise combined
with Group support
9
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
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Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Investment case
Why invest
in Grafton?
Delivering value for shareholders
throughout the cycle
Growth, acquisition and
integration capability
Operational strength and expertise
Long-term growth potential
Resilient business model
• Consistent delivery of ROCE > WACC.
• Industry leading operating margins.
• Track record of strong free cash flow generation:
over £700 million generated over the last four years.
• Investment grade credit rating giving resilience in
case of unexpected events or market downturns.
• A disciplined approach to capital allocation with
opportunities to:
• Invest in existing business and fund organic growth.
• Grow the dividend whilst maintaining dividend
cover at 2-3 times earnings.
• Fund inorganic growth with a focus on creating
long-term shareholder value.
• Return surplus capital to shareholders.
• Track record of organic development and
continuous improvement.
• Significant experience in acquiring and successfully
integrating businesses.
• Proven track record in enhancing and growing
acquired businesses.
• Strong management teams in each geography
toexecute the local strategy.
• Highly engaged and experienced colleagues in
branches, understanding the needs of the local
customer.
• Subject matter experts in key functional areas at
thecentre to support local teams and a programme
to share knowledge and leverage best practice.
• We operate in markets with structural long-term
growth potential:
• Shortage of housing and growing population.
• Need to improve the existing housing stock
andbuilt environment.
• Need to increase energy efficiency and reduce
carbon emissions.
• Leading market positions in several European
markets providing greater resilience than a single
country focus.
• Trusted local brands in each geographic market,
tailored to the needs of local customers.
• Federated operating model gives local
accountability, supported by a performance-led
management regime and shared Group expertise.
10
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Ian Tyler, Chair
Dear Shareholder,
I am pleased to present, on behalf of the Board,
Grafton’s Annual Report and Accounts for the
year ended 31 December 2025.
The Group delivered a resilient performance for the
year, with adjusted operating profit slightly ahead
of expectations at £190.2m, mostly driven by the
first full year contribution of Salvador Escoda in
Spain. Our performance for the year reflects the
advantage of our diversified operations across
ourfour trading segments: Island of Ireland,
GreatBritain, Northern Europe and Iberia, which
positions us well to leverage growth in the Island
ofIreland and Iberia as we prepare for recovery
inour weaker performing markets.
Strategy
Grafton’s long-term growth ambition is to be the
leading European multinational distributor of
construction related products and solutions. Our
customers are predominantly trade customers and
whilst we operate in different geographies and
serve many product segments, our customers
share many common characteristics and needs,
not least the certainty and trust of getting the
products and solutions they want, when they want
them.
Our objective is to create value for our
shareholders by deploying capital and seeking to
build our presence in markets and formats in
geographies which have long-term growth
characteristics which are likely to exceed the rate
of growth of their underlying economies based on
the expected long-term spend on residential and
commercial property improvement, maintenance
and development. We recognise that construction
markets are cyclical and we try to look beyond the
short term to create long-term, enduring value. Our
geographic diversity provides greater resilience
than a focus on a single country.
We operate a federated structure with clear local
accountability overseen by a performance led
management regime, using our core operational
skills and knowledge to drive optimal outcomes
from each of our operating businesses.
Where we look to add value as a Group is in the
shared knowledge and expertise which we have in
serving our trade customer base. We retain a small
number of subject matter experts in key functional
areas at the centre of the Group and augment this
team with cross-business resources and a
programme of knowledge sharing and best
practice. This helps to support key initiatives in
existing businesses and to assist the development
of newly acquired businesses.
We operate in four geographical areas: Island of
Ireland, Great Britain, Northern Europe and Iberia
and our near-term focus is to strengthen our
presence in these existing geographies while
building a pipeline of new geographic opportunities
for longer-term development. While we remain
open to value-creating opportunities, capital
deployment will primarily focus on reinforcing
existing market positions in the near term.
Capital allocation remains a key priority for the
Board. Given the cyclical nature of our industry, we
aim to maintain our investment grade credit rating
with a maximum financial leverage of around 2
times EBITDA when compared to lease adjusted
net debt. The ceiling for financial leverage is
considered with due regard to the position in the
economic cycle with higher levels of leverage
sustainable during an upswing.
Creating value for our
stakeholders
“ Grafton’s long-term growth
ambition is to be the leading
European multinational distributor
of construction related products
and solutions.”
Chair’s statement
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Financial Statements
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Supplementary Information
Grafton is in a financially strong position; at the
end of December 2025 our net cash position was
£274.0m and net debt position inclusive of leases
was £123.4m, equating to financial leverage of
0.39 times. This strength enables the Group to take
advantage of the continuing opportunities to
deploy capital to generate future value for
shareholders. Furthermore, an underlying strength
of Grafton is its capacity to turn its profits into free
cash flow. We calculate our free cash flow after we
have paid our finance costs, made the lease
payments on our property, invested in the
replacement capital expenditure we need to make
and paid our taxes. Judged against this
benchmark, Grafton has generated more than
£700m in free cash flow over the last four years.
Within the framework of limiting financial leverage
to around 2 times, we allocate capital over the
longer term based on the following order of priority:
1. Strengthening our current business and
investing capital to fund organic growth;
2. Core dividend at a target coverage ratio of
between 2 and 3 times earnings;
3. Funding inorganic growth to generate long-term
value for shareholders with such investments
assessed against the potential benefits to
shareholders of a return of surplus capital; and
4. Returning surplus capital to shareholders
through share buybacks or special dividends
depending upon the Board’s view of their
respective relative value to shareholders.
Over the years, the Group has been consistently
disciplined in its capital allocation. In 2021, it
disposed of a material part of the Group with the sale
of the traditional GB merchanting business because
the Board did not believe it would deliver either the
financial returns or growth prospects to meet
Grafton’s objectives. Since May 2022, Grafton has
reduced its share count by over 20% through share
buybacks, deploying £428m of capital to achieve this.
Following extensive market review, Grafton entered
the fast-growing Spanish air conditioning market in
late 2024 with the acquisition of Salvador Escoda.
When deciding to make acquisitions, the Board
always considers the alternative returns afforded
byway of share buybacks and vice versa.
With the current financial position of the Group and
its underlying cash generation ability, it retains the
capacity to both make acquisitions and return capital
to shareholders.
Returns to shareholders
The Board recommends a final dividend for 2025
of27.00 pence per ordinary share. Subject to
shareholder approval, the dividend will be paid on
21 May 2026 to shareholders on the Register of
Members at the close of business on 24 April
2026, the record date. Together with the interim
dividend of 10.75 pence per share paid on
10 October 2025, this brings the total dividend
forthe year to 37.75 pence per share,
anincreaseof 2.0% on 2024.
During the year, the Board approved two additional
share buyback programmes, returning £56.6m of
capital to shareholders. This brings the total cash
returned to shareholders over the seven share
buyback programmes completed since May 2022
to £428.3m. We have today announced a new
buyback programme for £25.0m which will
commence on 5 March 2026.
Sustainability
In 2025 we have continued to focus on our material
sustainability priorities including health and safety,
climate change, supply chain due diligence and
diversity. Details of the Group’s sustainability
strategy, targets, performance, policies and
programmes are outlined in the Sustainability
Statement on pages 43 to 70.
Board changes
Mrs. Susan Murray and Mr. Vincent Crowley retired
from the Board in October 2025 as part of the
normal cycle of Board refreshment. On behalf of
the Board, I would like to thank Susan and Vincent
sincerely for their commitment and dedication
throughout their years of service.
We are delighted to have appointed David Dillon
and Andrea Gisle Joosen as Non-Executive
Directors in May and July 2025 respectively.
Andrea assumed the role of Chair of the
Remuneration Committee in September 2025.
Both David and Andrea bring significant experience
and expertise to the Board and I look forward
toworking with them in the years ahead.
Chair’s statement continued
We were also delighted to appoint Dr. Rosheen
McGuckian, who has served on the Board since
2019, to the position of Senior Independent
Director in October 2025.
Conclusion
The Board’s focus for 2026 is on continuing to
deliver growth and enhance shareholder value
through ongoing investment to strengthen and
consolidate our market positions.
I would like to thank all of our colleagues, led
byCEO Eric Born and the management teams
across the Group, for their continued dedication.
The hard work and commitment of all of our
colleagues is central to Grafton’s success.
I would also like to thank our shareholders for your
support throughout the year and I look forward to
meeting some of you at this year’s AGM which will
be held at 10.30am on Friday 15 May 2026 at the
IMI Conference Centre, Sandyford Road, Dublin 18.
Ian Tyler
Chair
4 March 2026
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Supplementary Information
Eric Born, Chief Executive Officer
Resilience and strength
of our operations
“ The Group’s gross margin
increased by 50 basis points
during 2025, driven by a strong
focus on margin management
across all businesses.”
Chief Executive Officer’s statement
“We are very encouraged by our strong acquisition pipeline,
supported by our highly cash generative business that
retained £274m net cash at year-end, and which has
supported the return of over £428m to shareholders by way of
share buybacks since May 2022.”
Delivering profitability ahead of analysts’
consensus, despite inflationary pressures and
challenging conditions in some of our markets,
reflects the successful execution of our strategy of
scaling positions across multiple geographies
combined with a strong operational focus. We’ve
sustained our focus on margin management,
whilst also using our robust balance sheet to invest
in strengthening our market positions and our
customer proposition. Grafton’s resilience in 2025
points to substantial profitability upside as
demand recovers in weaker markets and as we
scale our presence organically and through
complementary acquisitions.
We are very encouraged by our strong acquisition
pipeline, supported by our highly cash generative
business that retained £274m net cash at
year-end, and which has supported the return of
over £428m to shareholders by way of share
buybacks since May 2022.
We expect continued growth in the Island of
Ireland and Iberia however elsewhere market
conditions remain mixed. Though market
improvement in Great Britain and Northern Europe
is expected to be gradual, we remain upbeat on
outlook over the medium term based on structural
demand tail winds, positive operating leverage and
the scalability and efficiency of our businesses as
markets normalise.
Business review
Grafton’s performance in 2025 highlights the
resilience and strength of its cash generative
diversified operations, its sustained focus on
margin management, and its continued investment
in strengthening its market positions, despite weak
trading conditions outside the Island of Ireland and
Iberia. Trading activity reflected a marked
slowdown in the second half in several markets,
partially mitigated by tight cost control and the
benefit of self-help actions in all geographies.
The Group’s cost discipline and investment in its
market position over recent years has paved the
way for a very positive operating leverage effect as
weaker markets recover and incremental sales
contribute disproportionately to profitability. We
continue to see opportunities for consolidation
across our markets and, consistent with our long
-term ambition to be the leading multinational
distributor of products and solutions to the
European construction market, we remain focused
on identifying and executing acquisitions to
reinforce and increase our market presence.
The Group’s gross margin increased by 50 basis
points during 2025, driven by a strong focus on
margin management across all businesses. This
improvement was supported by targeted pricing
actions, a strong focus on customer value,
procurement efficiencies, and strengthened
supplier support.
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Supplementary Information
Chief Executive Officer’s statement continued
Grafton has established an experienced senior
leadership team to execute the Group’s strategy
across our geographies. Mario Ballarin was
appointed to the new role of CEO Grafton Iberia to
lead the advancement of the Group’s growth
ambitions in the region. Our management teams
continue to take decisive actions to mitigate labour
and property cost pressures by focusing on
productivity improvements, streamlining
processes, and implementing efficiency initiatives.
The Group is also investing in technology that
enables greater operational efficiency, including
successful implementations of new ERP systems
in both Woodie’s and Leyland SDM.
Adjusted operating profit before property profit
increased to £184.3m (2024: £173.5m) with the
increase driven in large part from the first full year
of contribution from Salvador Escoda in Spain.
Adjusted operating profit of £190.2m
(2024: £177.5m) included property related profits
of £5.9m (2024: £4.0m).
We are pleased with the results of our Island of
Ireland business which achieved good growth in
profitability in 2025 underpinned by year-on-year
sales growth across all businesses. Growth in
profits was driven by strong performances in both
Woodie’s and Chadwicks.
Despite a continuing weak RMI market backdrop,
especially in the greater London area and slow
recovery in the housebuilding sector, our Great
Britain business delivered profit growth in the year,
albeit from a cyclical low. Targeted commercial
actions improved gross margin, offsetting high
labour and property costs, despite subdued
demand.
Northern Europe saw lower profits due to reduced
sales in Finland and inflation driven overhead
pressure in both the Netherlands and Finland. The
Netherlands started the year strongly but softened
in the second half, while Finland continued to face
economic and construction sector weakness.
In Iberia, Salvador Escoda has been successfully
integrated into the Group during its first full year of
ownership. Trading in the year, which was in line
with pre-acquisition expectations, contributed
revenue of £212.9m and adjusted operating profit
of £13.6m. This region provides a strong platform
for Grafton to substantially scale our operations
there over the next five years, through a
combination of organic growth and market
consolidation opportunities.
Change to operating segments
During the financial year ended 31 December
2025, the Group has adopted a new reporting
structure which better reflects the Group’s strategy
- the distribution of construction related products
and solutions serving geographic markets with
scalable formats that can deliver long-term growth
for shareholders.
The Group is now organised into four geographical
areas: Island of Ireland, Great Britain, Northern
Europe and Iberia. Previously Grafton was
organised on the basis of: five distribution
segments, one retailing segment and one
manufacturing segment.
The operating segments are now aligned with
these geographical areas and better align with how
the Board manages the business, assesses
performance and allocates capital and resources
for organic and inorganic growth:
• Island of Ireland - comprising Chadwicks,
Woodie’s, MacBlair and MFP (divested 31 May
2025)
• Great Britain - comprising Selco, Leyland SDM,
TG Lynes, CPI EuroMix and StairBox
• Northern Europe - comprising Isero and Polvo in
the Netherlands and IKH in Finland
• Iberia - comprising Salvador Escoda in Spain
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Supplementary Information
Comparative figures for 2024 have been restated
to reflect the new structure. The realignment has
no impact on the Group’s consolidated financial
results.
Dividends and share buybacks
The Board is recommending a full year dividend of
37.75 pence per share, an increase of 2.0% on
dividends of 37.00 pence paid for 2024. The final
dividend for 2025 is 27.00 pence (2024: 26.50
pence) per ordinary share, an increase of 1.9%. An
interim dividend of 10.75 pence per share
(2024: 10.50 pence) was paid on 10 October 2025.
The final dividend has been increased at a lower
level than the rate of growth in adjusted earnings
per share, consistent with the Board’s intention to
re establish full year dividend cover more firmly
within its medium term target range of two to three
times adjusted earnings. The total dividend for
2025 of 37.75 pence is covered 2.0 times by
adjusted earnings per share of 75.43 pence
(2024: 71.78 pence and 1.9 times cover).
The Group’s cash outflow on dividends paid during
the year was £72.6m (2024: £73.2m). A liability for
the final dividend has not been recognised at
31 December 2025 as there was no payment
obligation at that date.
The final dividend will be paid on 21 May 2026 to
shareholders on the Register of Members at the
close of business on 24 April 2026, the record date.
The ex-dividend date is 23 April 2026. The final
dividend is subject to approval by shareholders at the
Annual General Meeting to be held on 15 May 2026.
Reflecting its disciplined approach to capital
deployment and supported by its resilient balance
sheet and strong cash conversion, Grafton has
completed seven share buyback programmes
since May 2022. This has returned cash of
£428.3m to shareholders through share buybacks
reflecting the repurchase of 49.28m ordinary
shares at an average price of £8.69 per share. In
total, the Group has reduced its share count by
20.5% since the first buyback programme
commenced.
Capital allocation decisions remain under the
ongoing oversight of the Board, which is
committed to a disciplined and balanced approach
to the deployment of capital. Reflecting the
Group’s continuing strong cash generative
performance, a new share buyback programme of
up to £25.0m is announced today, commencing on
5 March 2026. The Group’s robust cash generation
provides the flexibility to return capital to
shareholders through dividends and share
buybacks, while simultaneously maintaining the
capacity to pursue an active and growing pipeline
of acquisition opportunities.
Progress on sustainability
On pages 43 to 70 we have published our
sustainability progress and performance for 2025.
This covers the five areas of our strategy: Planet,
Customer and Product, People, Community and
Ethics.
2025 saw the legislative landscape relating to
sustainability change rapidly. Our governance
committees including the Board and Executive
Sustainability Committee stayed up to date on
these developments and have reaffirmed the
businesses commitment to sustainability.
We are pleased to demonstrate progress in the
following key areas:
Health and safety
• Since 2021, lost time injury frequency rate has
reduced by 16.3% and severity rate has reduced
by 38.6%. In 2025, we developed an all-colleague
reporting system to log safety hazards and
concerns in addition to our established incident
reporting systems
HR
• Senior leadership appointments to strengthen
the management of our businesses and
execution of our strategy as follows:
• Carmen Lothian appointed as Group Chief
Human Resources Officer following the
retirement of Paula Harvey
• Nathan Bishop appointed to a new role of
Group Chief Information Officer to lead our
Technology, AI and Digital strategy
• Frank Elkins appointed as CEO to lead our
businesses in Great Britain
• Anu Ora appointed as Managing Director to
lead our business in Finland
• Mario Ballarín appointed to the newly created
position of Grafton Iberia CEO to lead our
expansion in Spain
• Selected a Group-wide talent system which is
being rolled out across the Group to support our
performance management culture
• Over 750 colleagues participating in government
funded training schemes across the Group
Climate change
• 40.3% reduction in absolute market-based
Greenhouse Gas emissions in 2025 vs the 2021
base year for scope 1 and 2
Supply chain due diligence
• Launched our EcoVadis supply chain due
diligence programme
• 89.5% of suppliers by spend have had the initial
risk assessment*
Chief Executive Officer’s statement continued
* Spend excludes Salvador Escoda. These suppliers will be
uploaded in phase 2 of the programme in 2026 as their
sustainability onboarding is completed.
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Financial Statements
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Supplementary Information
Operational waste
• 99.2% diversion of operational waste from landfill
Community investment
• Over £1.7m donated to charities and good
causes through cash, in kind or volunteering,
which equates to 0.93% of our adjusted operating
profit before property profit for the year,
significantly higher than our target of 0.8%
Human rights
• Completed a human rights risk assessment and
published our Human Rights Policy
Outlook
Positive trading conditions are expected to
continue in the Republic of Ireland (“ROI”) and
Spain, however, in our other geographies, markets
are anticipated to remain challenging in 2026.
Whilst the Island of Ireland and Iberia segments
performed strongly, meaningful recovery in Great
Britain and Northern Europe did not materialise as
anticipated in 2025 and the exit rate of activity
from 2025 was weaker than expected;
consequently, the timing of any improvement in
these two segments in the year ahead remains
uncertain.
Our experienced management teams will continue
to maintain a tight focus on efficiency, cost control
and delivering value to customers. Despite
moderating momentum through the second half,
the outlook for Grafton remains favourable,
supported by structural growth drivers, strong
market positions across all regions, the recovery
potential in Great Britain and Northern Europe, a
robust balance sheet and a healthy acquisitions
pipeline.
In our Island of Ireland segment, we expect the
construction market in the ROI to continue to
deliver solid growth, supported by increased public
sector capital investment and a favourable
economic backdrop, while no significant volume
uplift is anticipated in Northern Ireland due to
ongoing weakness in the local economy.
We remain vigilant that retail consumer sentiment
in the ROI has turned slightly more cautious, with
ongoing cost of living concerns contributing to
weaker confidence.
In Great Britain, the near term outlook for the
construction market remains subdued following
the loss of momentum in the latter part of 2025.
While easing inflation and supportive interest rates
should help, growth in 2026 is likely to be modest
and weighted towards the second half.
In Northern Europe, the Dutch construction market
is expected to recover gradually in 2026 after
growth slowed significantly in the second half of
2025, while in Finland any meaningful construction
volume improvement is likely to be delayed until
the second half of 2026.
In Iberia, the Spanish construction market is
expected to maintain its recovery in 2026, with
growth of around 3–4%, supported by sustained
housing demand, substantial investment in
renewable energy and transport infrastructure, and
the accelerating shift toward energy efficient and
sustainable building practices.
Average daily like-for-like revenue
change in constant currency
Q4 2025
1 Jan 2026 –
28 Feb 2026
Island of Ireland +0.9% +3.1%
Great Britain 0.0% (5.7%)
Northern Europe (2.3%) +0.8%
Iberia +4.4% +4.8%
Total Group +0.2% +0.2%
Iberia pro forma
**
+2.6%
** Like-for-like results are presented on a proforma basis to reflect
the performance of Salvador Escoda, which was acquired by
the Group on 30 October 2024, as though it had been part of the
Group for the entire comparative period.
Group average daily like-for-like revenue in the
period from 1 January 2026 to 28 February 2026
was 0.2% ahead of the same period last year.
Trading in the early part of the year was impacted
by prolonged wet weather across our businesses
in the Island of Ireland and Great Britain. However,
the Island of Ireland remained ahead of the prior
year, supported by softer comparators, following
the impact of Storm Éowyn in 2025.
Notwithstanding unfavourable weather conditions,
the market environment in Great Britain remained
challenging. In Northern Europe, the return of
Chief Executive Officer’s statement continued
winter weather conditions supported strong
trading activity in Finland, while trading in the
Netherlands was negatively affected by the timing
of public holidays. Our business in Iberia performed
strongly, with the momentum achieved in 2025
carrying into the new year.
Eric Born
Chief Executive Officer
4 March 2026
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Key performance indicators
Revenue
£2.52bn
2024
2023
2022
2021
2025
£2.28bn
£2.3 2bn
£2.30bn
£ 2 .11bn
£2.52bn
Our progress in 2025
Revenue increased by 10.4% to £2.52bn and
increased by 9.6% in constant currency.
Risks
• Macro-economic conditions
• Competition
Adjusted operating profit
margin before property profit
7.3%
2024
2023
2022
2021
2025
7.6 %
8.8%
11. 3%
12.9 %
7.3 %
Our progress in 2025
The adjusted operating profit margin before
property profit is down 30 bps to 7.3%.
Risks
• Macro-economic conditions
• Competition
Adjusted operating
profit margin
7.5%
2024
2023
2022
2021
2025
7. 8 %
8.9%
12.4%
13.6%
7.5 %
Our progress in 2025
The adjusted operating profit margin is down 30
bps to 7.5% from 7.8% in 2024.
Risks
• Macro-economic conditions
• Competition
Adjusted return on
capital employed (ROCE)
10.9%
2024
2023
2022
2021
2025
10.3%
11.9%
17.2 %
19.4%
10.9%
Our progress in 2025
ROCE increased by 60 bps primarily due to the
increase in adjusted operating profit.
Risks
• Macro-economic conditions
• Competition
Adjusted operating profit
£190.2m
2024
2023
2022
2021
2025
£ 17 7. 5 m
£205.5m
£285.9m
£288.0m
£190.2m
Our progress in 2025
Adjusted operating profit, including property profit,
increased by 7.1% to £190.2m.
Risks
• Macro-economic conditions
• Competition
Net cash – before IFRS 16 leases
£274.0m
2024
2023
2022
2021
2025
£ 27 2 .1m
£379.7m
£458.2m
£588.0m
£274 .0m
Our progress in 2025
Retained a strong cash position with net cash,
before lease liabilities, of £274.0m, an increase of
£1.9m from net cash of £272.1m at the end of 2024.
Risks
• Macro-economic conditions
• Competition
• Acquisitions
Adjusted earnings per share
75.4p
2024
2023
2022
2021
2025
71.8p
7 7.9 p
96.6p
93.0p
75.4p
Our progress in 2025
Adjusted earnings per share was up 5.1% on prior
year as a result of the increase in the adjusted
profit after tax and a lower weighted average
number of shares in issue from share buybacks in
the year.
Risks
• Macro-economic conditions
• Competition
Free cash flow
£168.3m
2024
2023
2022
2021
2025
£178.2m
£203.0m
£159.3m
£180.8m
£168.3m
Our progress in 2025
Strong free cash flow of £168.3m which represents
an 88% conversion of cash of adjusted operating
profit. A decrease of £9.9m from the free cash flow
position at the end of 2024.
Risks
• Macro-economic conditions
• Competition
Financial KPIs
The key performance indicators (KPIs) below are used to track performance and increase value for shareholders.
+ Read Alternative Performance Measures definitions on pages 191 to 194
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Supplementary Information
Key performance indicators continued
Health and safety –
keeping people safe
Lost time injury frequency rate
(LTIFR) / 100,000 hours worked
0.84
2024
2023
2022
2021
2025
0.87
0.86
0.92
1.0 0
0.84
Our aim
We believe nothing we do is so urgent that we
cannot do it safely. This belief is fundamental
across all our operations to ensure our colleagues,
customers and everyone we work with returns
home safe and well at the end of each day.
Our progress in 2025
Our focus on the key health and safety priorities
around the Group resulted in a continued reduction
in lost time injury frequency and severity during
theyear.
During the period 2021 to 2025, the Lost time
injury severity rate (LTISR) has reduced by 38.6%
and the LTIFR has reduced by 16.3%.
Environmental –
reducing our greenhouse gas emissions
Reduction in market-based Scope 1 & 2
GHG emissions (tCO
2
e) since 2021
40.3%
2024
2023
2022
2021
2025
34, 861
40, 011
46,283
55,808
33,290∆
Our aim
Our aim is to run our businesses in an
environmentally responsible manner. We aim
toprotect natural resources, minimise waste
andreduce our greenhouse gas emissions.
Our progress in 2025
Since the 2021 base year we have reduced Scope
1 and 2 emissions by 40.3% through a variety of
initiatives using the market-based calculation
methodology. We have also calculated our Scope 3
emissions for 2024 which show a 17.6% reduction
against the 2021 base year.
As set out in further detail on page 55, emissions
data for 2021 to 2024 has been recalculated
andrestated in line with the Group’s GHG
Recalculation Policy.
Diversity and inclusion –
being a welcoming, inclusive place to work
Percentage of women in senior
management
38%
2024
2023
2022
2021
2025
32%
28%
23%
17%
38%
Our aim
Being a diverse, inclusive and socially conscious
business is critical to our future success. Our aim
is to ensure that all of our people, regardless of
gender, ethnicity, age, disability, religion, socio-
economic background or sexual orientation,
canreach their full potential and be valued for
being themselves.
Our progress in 2025
Despite operating in a traditionally male dominated
industry, we continually aim to enhance female
representation across the Group. Our commitment
to an inclusive workplace is demonstrated through
diversity recruitment strategies, expanded benefits
for work-life balance and active colleague
participation in diversity initiatives. The number
ofwomen in senior management across the
Groupincreased to 38% in 2025.
Non-financial KPIs
The non-financial KPIs below are used to measure our commitment to responsible business practices.
Customer and product - providing safe
responsibly sourced products
Supply chain due diligence
EcoVadis
programme
launched
Our aim
Our aim is to collaborate with our suppliers to
secure the consistent supply of products for our
customers and to ensure that the principles of our
sourcing standards are met. We are also focused
on providing responsibly sourced and more
sustainable options to our customers and
increasing circular economy opportunities.
Our progress in 2025
In 2025 we launched our EcoVadis programme
which is a core part of our supplier due diligence
process. We launched a training video and carried
out training sessions involving 80 commercial
colleagues and held monthly drop-in clinics for
commercial teams. At the year end, 89.5% of
suppliers by spend had undergone initial risk
assessment, excluding Salvador Escoda whose
suppliers will be uploaded in phase 2 of the
programme in 2026 as their sustainability
onboarding is completed.
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How we listen
and respond to
our stakeholders
Stakeholder engagement
Engaging with our key stakeholders
Strong stakeholder relationships are essential for
long-term success. The Board, Group management
and business management teams assess the impact
of their decisions on each of their stakeholder groups.
With our federated structure, each of our businesses
engages directly with their stakeholders on an ongoing
basis. Our governance framework delegates authority
to local management supported by an appropriate
control environment at Group level, enabling
businesses to consider the needs of their own
stakeholders in their decision-making.
The Board reviews engagement effectiveness through
reports and feedback via our governance structure.
Our colleagues
• A strong sense of purpose and a company
that lives by its values.
• A diverse and inclusive work environment,
where their overall safety, health and
wellbeing is valued.
• A business that does the right thing for
people and the environment.
• A culture where people can thrive, with
opportunities for training, development
and progression.
What’s important to our stakeholders
Our communities and the environment
• Building a successful and sustainable
business that respects people and planet.
• Operating our business in a way that respects
the environment.
• Supporting local and national causes.
• Making a positive contribution to the
communities where we operate.
Our suppliers
• An efficient route to market for their products.
• Communication and engagement.
• Feedback on market demand and
customer reaction.
• Long-term collaboration to build strong,
lasting relationships.
Our customers
• Availability of a wide range of products and
services on time and at competitive prices.
• A safe and efficient on-site experience at
convenient branch locations.
• Online capability and ease of access
to products.
• Providing responsibly sourced and more
sustainable options to customers.
Our shareholders
• Financial performance and growth that
maximises shareholder returns in a
responsible way.
• A clearly communicated strategy and
business model.
• Appropriate and considered decision
making that is in the long-term interests
of the Group.
+ Read our governance framework on page 75
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Stakeholder engagement continued
Our approach to engagement How we engage Actions in 2025
Customers
We build strong customer relationships by delivering quality
service, embracing innovation, seeking feedback, and
adapting to change with digital and sustainable solutions.
• Regular customer engagement to build ongoing relationships.
• Continued investment in online platforms and development of online
sales capabilities to respond to changing customer requirements.
• Investment in branch network for improved customer experience.
• Collaboration with buying groups to improve product sourcing and
deliver increased value to customers.
• Woodie’s partnered with Virtualstock to onboard suppliers faster
andlaunch more products online, expanding customer choice
andconvenience.
• Leyland SDM partnered with TradeKart to offer rapid delivery
ofdecorating and DIY products across London.
• Woodie’s partnered with the A.R.E.N.A. alliance to strengthen
sourcing capabilities, aligned with its commitment to deliver quality
and value tocustomers.
Colleagues
Our colleague engagement strategy includes structured
feedback, open forums, confidential reporting, and regular
communication to ensure colleagues feel heard, recognised,
and supported in their professional growth.
• Colleague engagement surveys.
• Colleague Forum Meetings at larger businesses in the UK and Ireland
attended by Non-Executive Directors.
• Internal communication platforms, town halls, newsletters, and
business unit CEO blogs.
• Our SpeakUp reporting service allows for anonymous reporting if
colleagues feel unable to discuss a concern with line management.
• Survey results and feedback were shared with management and
colleagues to develop action plans for improving engagement and
resolving concerns.
• Designed a comprehensive Group-wide performance management
process and system.
• Launch of a new SpeakUp service, improving security and
communication between reporters and investigators, which
resulted in a 7% increase in SpeakUp reports compared to 2024.
Communities and the environment
We respect the environment, support local and
nationalinitiatives, and contribute to our communities.
Byresponsibly sourcing products and minimising waste
inmanufacturing, we ensure lasting quality and high
environmental standards.
• Local activities at branch level including volunteering, charitable
donations and providing employment and work experience
opportunities.
• Continued progress towards fulfilling our commitment to achieving net-
zero greenhouse gas emissions across our value chain by 2050.
• Engaging with global standards for responsible sourcing of
construction products.
• Over £1.7m donated to charities and good causes in 2025 through
cash, in kind or volunteering, significantly exceeding our target of
0.8% of adjusted operating profit.
• 40.3% reduction in absolute market-based GHG emissions vs
2021baseline.
• 99.2% waste diverted from landfill.
• Achieved EcoVadis Silver Top 15% sustainability rating.
Shareholders
We recognise the importance of regular dialogue and
communication with our shareholders.
• Engagement with shareholders ahead of the AGM.
• Regular trading updates on Group performance.
• CEO and CFO hosted live analyst and investor presentations after final
and half-year results.
• Consultation with major shareholders on proposed changes
toDirectors’ Remuneration Policy for 2026.
• All AGM resolutions passed with high level of shareholder approval.
• Feedback from Remuneration Policy consultation helped shape the
final Policy which will be put to shareholder vote at the 2026 AGM.
• The Board commissioned an investor perception study during the
year which provided the opportunity for investors to share their
perspectives on the Group’s strategy, financial position, capital
allocation, management and governance.
Suppliers
We engage suppliers through clear communication, structured
assessments, strong compliance and risk management,
andby using EcoVadis to drive sustainability, support
improvement plans, and encourage investment in
low-emission technologies.
• Commercial teams in each business regularly communicate with
suppliers both informally and at scheduled review meetings.
• Supplier conferences held at the Woodie’s and Selco businesses.
• EcoVadis programme launched with commercial teams and suppliers.
• Enhanced supplier engagement and supply chain due diligence.
• 89.5% of suppliers by spend (excluding Salvador Escoda which will
be rolled out in 2026) had undergone initial risk assessment on
EcoVadis at the year end.
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Our values in action
Our values
support our
purpose
and help ensure that everything we
do is aligned with what we stand for
as a Group.
Be brilliant for our customers
Leyland SDM partners with TradeKart for rapid
delivery in London
In May, Leyland SDM partnered with TradeKart to offer rapid
delivery of decorating and DIY products across London.
Customers can now order via the app and receive site deliveries in
as little as 30 minutes, boosting convenience and efficiency for
tradespeople.
Watershed unveils refurbished luxury bathroom
showroom in Coleraine
In October, MacBlair unveiled its refurbished Watershed
showroom in Coleraine, featuring 15 luxury bays, a 3D design
service, and expert advice. It’s the first in a planned branch
upgrade programme, blending inspiration, technology, and
service for trade and retail customers.
Value our people
Chadwicks sparks conversation with Elephant
in the Room campaign
Chadwicks partnered with Elephant in the Room to raise
awareness of hidden mental health challenges. Bespoke elephant
sculptures, designed by colleagues, toured branches across
Ireland, symbolising the personal challenges often faced in
silence and encouraging open dialogue.
Free mortgage advice for all UK colleagues
Mortgage Advice Bureau works with Grafton Group in the UK to
offer free support to colleagues navigating the mortgage process.
Advisers provide tailored guidance and access to exclusive deals
from over 90 lenders, helping colleagues make informed
decisions about their financial future.
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Ambitious
Selco celebrates class of 2025 apprentices
In November, Selco celebrated its class of 2025 apprentices, with
50 colleagues completing programmes from Retail and Selling to
Leadership and Specialist Skills, including the first-ever Women in
Leadership cohort.
Woodie’s annual Woscars
In October, Woodie’s held its annual ‘Woscars’ ceremony at Croke
Park, a renowned stadium in Dublin, to recognise colleagues and
teams from across its 35 stores and the support office.
The event celebrated the hard work that goes into making
Woodie’s a Great Place to Work.
Entrepreneurial and empowering
StairBox and Wooden Windows join NMBS buying group
In February, StairBox and Wooden Windows joined the NMBS
buying group, the UK’s leading society for independent builders
and merchants. This membership provides access to over 1,250
independent merchants, a cost-effective market route,
participation in the UK’s largest buying event, and extensive
marketing opportunities.
Salvador Escoda specialist training sessions
Salvador Escoda offers free training for installers’ guilds and
associations across Spain. In 2025, more than 200 professionals
attended specialised events on gas regulation, gas detection, and
industrial heating in locations throughout the country, gaining
valuable insights and practical knowledge from industry experts.
Sustainable, trustworthy and responsible
Isero maintains top-level
CO
2
Performance Ladder certification
Isero maintained level 5 certification on the Dutch CO
2
Performance Ladder, the highest standard for carbon reduction.
Renewed annually since 2017, it reflects Isero’s commitment to
cutting emissions across its operations and supply chain through
transparent reporting and collaboration.
CPI EuroMix colleagues unite behind Safety
EuroMix colleagues took part in interactive Safety Citizenship
sessions designed to strengthen safety awareness. Interactive
roadshows encouraged colleagues to look out for one another,
customers, and the public. Teams nationwide took part in
hazard-spotting activities, open discussions and signed safety
pledges to promote awareness and safer sites.
Our values in action continued
Regional overview
Island of
Ireland
Our Island of Ireland segment includes the
Chadwicks and Woodie’s businesses in the ROI,
along with our MacBlair business in Northern
Ireland. Chadwicks is a leading distributor of
building materials, operating from 64 locations.
Woodie’s is the market leading DIY, Home and
Garden retailer, supported by a network of 35
stores and a growing online platform. Both are
complementary businesses that enable the Group
to serve the broadest range of customers with
construction related products in the ROI. In
Northern Ireland, MacBlair is a leading distributor
of building materials, operating across 23
branches.
Average daily like-for-like revenue increased by
3.5% in the year underpinned by year-on-year
growth across all businesses. Woodie’s delivered
another year of strong growth, supported by a
particularly strong performance in plants and
garden products. Growth was driven
predominantly by increased transaction volumes,
alongside incremental gains in average transaction
values. Continued investment in our digital
offering, including the successful rollout of a new
ERP system in 2025, drove a 30.2% year on year
increase in online sales (61% above 2022 levels),
with online channels representing almost 5% of
total sales for the year. Despite modest growth in
the segments of the Irish construction market
served by Chadwicks, the business delivered a
positive sales performance with particularly strong
performance across the hardware, heating and
plumbing categories.
ROI’s economy provided a supportive backdrop in
2025, with full employment and relatively modest
inflation, including energy deflation in the first half
of the year, helping to sustain resilient consumer
spending. While overall housing completions of
just over 36,000 surpassed expectations, this
increase was largely driven by apartment
construction, and the share of smaller units in the
affordable and social housing segments continues
to rise. In contrast, smaller-scale developments
and medium to large-sized housing schemes,
markets that offer a more attractive customer
profile for Chadwicks, have continued to decline as
a proportion of Ireland’s total housing activity.
Activity in the commercial sector has begun to
recover after several years of decline, and
government supported investment in
infrastructure continues to grow. However, the
ramp up in housing supply remains slower than
market demand, constrained by external factors
including planning delays, challenges in securing
utility connections, and ongoing labour shortages.
RMI activity remains subdued as affordability
concerns continue to weigh on demand. In
Northern Ireland, market conditions remain
challenging, with the construction sector delivering
modest growth in 2025, primarily due to growth in
new housing, from a low base.
Gross margin increased by 20 basis points in the
year, driven primarily by the strong performance of
Chadwicks, where active commercial management
maintained disciplined pricing, secured improved
supplier support, and delivered additional supply
chain efficiencies.
Overheads were higher than 2024 due to
inflationary pressures, led by government
mandated wage increases in both jurisdictions and
higher national insurance costs in Northern
Ireland, alongside broader general cost inflation.
All our businesses have continued to focus on
productivity improvements by streamlining
processes, leveraging technology and proactively
managing rostering to help offset the impact of
wage inflation.
Adjusted operating profit before property profit
increased to £111.0m (2024: £107.5m) and
adjusted operating profit margin before property
profit was 20 basis points below 2024 at 10.4%
reflecting the continued impact of inflationary
pressure on overheads.
Performance 2025 £’m 2024 £’m Change* Constant Currency Change*
Revenue 1,071.6 1,016.2 5.4% 4.3%
Adjusted operating profit before property profit 111.0 107.5 3.2% 1.8%
Adjusted operating profit margin before property profit 10.4% 10.6% (20bps) –
* Change represents the movement between 2025 v 2024 and is based on unrounded numbers.
122
Number of branches/stores (2024: 115)
42.5%
Percentage of Group revenue (2024: 44.5%)
54.6%
Percentage of Group adjusted operating profit
excluding central activities (2024: 56.7%)
Key brands
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While consumer sentiment in the ROI has turned a
little more cautious, the medium term growth
outlook for the construction sector remains
positive supported by consistent government
policy and increased investment in housing and
infrastructure under the revised €112bn National
Development Plan (2026–2030). Solid growth is
expected in the overall construction market in the
ROI in 2026 supported by a step-up in investment
in the public sector capital programme and a
generally favourable economic environment. In
Northern Ireland, a significant uplift in volumes is
not anticipated in 2026 due to the underlying
weakness in the local economy.
The integration of HSS Hire Ireland, acquired on
31 May 2025, into Chadwicks continues to
progress with the short-term focus on systems
integration. HSS Hire Ireland is a tool and
equipment hire specialist operating from four
branches and four customer distribution centres in
the ROI. It offers an extensive range of
conventional hire products as well as specialist
equipment with a particular focus on powered
access machinery. This acquisition aligns with
Chadwicks’ strategy of consolidating its market
position and enhancing its value proposition by
broadening its offering to support its long-term
growth objectives.
We continue to explore organic and inorganic
growth opportunities in the Island of Ireland to
complement and strengthen our existing footprint,
while also investing in the expansion of our product
range and digital platforms to better meet the
evolving needs of customers.
The consolidated results for 2025 include five
months of trading, representing adjusted operating
profit of £1.0m, from the Group’s MFP piping
business in Ireland prior to its divestment on
31 May 2025 to Wienerberger AG which mainly
operates through Pipelife Ireland Solutions Limited.
The net profit on the disposal of the MFP business
was £8.1m in the year which is reported under
‘Exceptional items’. As part of the agreement to
sell MFP, Grafton will continue an ongoing trading
relationship for the supply of products with Pipelife
Ireland Solutions Limited.
Regional overview -Island of Ireland continued
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Regional overview continued
Great
Britain
Our Great Britain segment comprises both
distribution and manufacturing businesses with
apredominant geographical exposure to London
and the Southeast. Our distribution operations
include Selco, the leading trade only builders’
merchant focused on the RMI market and
operating 74 branches; Leyland SDM, a well
knowndecorating and DIY retailer with 36 London
stores; and TG Lynes, a specialist distributor of
commercial pipes and fittings based in London.
Our manufacturing operations include CPI
EuroMix, which supplies dry mortar to national,
regional and local housebuilders across Great
Britain from ten plants, and StairBox, the market
leading manufacturer of bespoke timber staircases
as well as wooden windows and doors.
Average daily like for like revenue in Great Britain
increased by 0.4% year-on-year, with strong growth
in our manufacturing businesses, which benefited
from softer comparators, largely offset by a
modest decline in our distribution businesses,
which represent a greater share of overall sales.
The UK economy began the year with stronger than
expected growth but lost momentum in the second
quarter as the temporary boost from housing and
exports faded and wider uncertainties weighed
onconfidence. Although the construction market
initially showed signs of improvement, conditions
weakened from late Q2 and remained subdued into
the second half, with the Autumn budget further
dampening consumer sentiment. Overall, RMI
demand has remained soft, particularly in London
and the Southeast, which accounted for 60% of
Grafton’s Great Britain revenue in the year reflecting
persistent weakness in household confidence and
finances. With housing starts in London at just
6,000 units in 2025, the weakest level in over 40
years, muted new build activity translated into
lowertransaction volumes and, consequently,
softerRMI demand. The recovery in housebuilding
has progressed more slowly than anticipated, as
persistent affordability challenges and ongoing
macro-economic uncertainty, continued to
constrain sales momentum.
Despite subdued volumes and increasing
competitive pressures, gross margin in Great
Britainincreased by 120 basis points during the
year, reflecting the effectiveness of our commercial
strategy and consistent margin progression across
all businesses. Targeted commercial actions,
including securing enhanced supplier support
and,for example, introducing delivery charges in
Selco, more than offset significant cost pressures,
particularly those arising from higher labour and
property related expenses. Towards the end of the
year, Selco initiated headline price cuts across 357
of its most frequently purchased building materials
to improve its value proposition which has been
well received by our customer base.
Although overheads increased year on year due
toinflationary pressures across the cost base, the
increase was contained by our tight management
of costs. On a like for like basis, overheads rose
by1.8%, reflecting cost reduction initiatives
implemented across the businesses and strict
controls on discretionary expenditure.
Although still well below the returns we would
expect in a normal market, adjusted operating
profit before property profit increased to £49.2m
(2024: £46.4m) and adjusted operating profit
margin before property profit was 40 basis points
higher at 6.4% as the improvement in gross margin
more than offset higher overheads.
Looking ahead to 2026, the near term outlook for the
UK construction market remains subdued following
the marked loss of momentum in the latter part of
2025. While inflation is expected to moderate over
the year and interest rates are projected to remain
supportive, overall growth in the construction market
is likely to be modest and weighted towards the
second half. Despite current softness in the market,
significant pent up demand persists, with industry
volumes still well below historical norms. The
medium term outlook remains positive, underpinned
by Government plans to materially increase new
housing delivery in response to population growth
and an enduring supply shortfall.
Despite the difficult market environment in recent
years, the Group has continued to expand its branch
network and invest in refurbishing existing locations,
while broadening our product range to better support
customers. The UK remains one of Europe’s largest
construction markets and a region where we have
a long track record of successful operations. We
remain committed to growing our presence there,
pursuing new organic growth opportunities across
our existing businesses alongside potential
acquisition targets.
Leyland SDM opened a new store on Tower
BridgeRoad in December 2025 and successfully
implemented a new ERP in the second half of the
year positioning the business to accelerate its
investment in its digital offering for customers.
Frank Elkins, appointed CEO of Selco and Great
Britain Distribution in August 2024, assumed
operational responsibility for all our businesses,
including manufacturing, in Great Britain from
December 2025.
Performance 2025 £’m 2024 £’m Change*
Revenue 765.4 767.0 (0.2%)
Adjusted operating profit before property profit 49.2 46.4 6.2%
Adjusted operating profit margin before property profit 6.4% 6.0% 40bps
* Change represents the movement between 2025 v 2024 and is based on unrounded numbers.
122
Number of branches/stores (2024: 122)
30.4%
Percentage of Group revenue (2024: 33.6%)
24.2%
Percentage of Group adjusted operating profit
excluding central activities (2024: 24.5%)
Key brands
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Northern
Europe
Our Northern Europe segment comprises our
businesses in the Netherlands and Finland. Our
business in the Netherlands, which trades under
the Isero and Polvo brands across 121 branches, is
the market leader in the distribution of
ironmongery, personal protective equipment
(“PPE”), tools and fixings products. IKH is a leading
distributor, based in Finland, of workwear, PPE,
tools, and spare parts, with a number two market
position in its core tools and PPE segments.
Average daily like-for-like revenue declined by 0.5%
in the year, with moderate growth in the
Netherlands more than offset by a pronounced
decline in Finland. Sales increased in the
Netherlands, driven primarily by strong branch
sales and growth in national key accounts, in
addition to increases in project related sales and
modest price increases of circa 1%. After a strong
start to the year, momentum in the Netherlands
eased as several major construction projects
reached completion and the start of new projects
was delayed. Sales in Finland declined sharply due
to persistently difficult market conditions,
unfavourable weather that reduced demand for
seasonal products both at the start and end of the
year, and temporary operational issues that
disrupted the internal supply chain. These internal
challenges gradually eased in the second half of
the year following decisive management actions.
The market in the Netherlands showed a strong
start to 2025, supported by continued signs of
recovery; however, momentum slowed in the
second half. Despite robust growth in housing
transaction volumes, the recovery in annualised
housing permits did not materialise, and housing
completions in 2025 are expected to show a slight
decline relative to 2024. Political uncertainty,
stemming from the collapse of the Dutch coalition
government and the inconclusive election
outcome, continued to weigh on market activity in
2025. In Finland, the economy continues to
experience ongoing weakness where the
government has implemented austerity measures
to address its fiscal deficit. Furthermore, the
expected recovery of the construction sector failed
to materialise in 2025 as the market continued to
decline.
Gross margin increased by 90 basis points in the
year, reflecting strong performances in both the
Netherlands and Finland. In the Netherlands, active
commercial management actions more than
offset the adverse mix effect of large construction
projects and key accounts accounting for a higher
proportion of sales, while gross margin in Finland
improved primarily through optimisation of rebates
and procurement efficiencies.
Overheads increased year-on-year, reflecting
general inflationary pressures, wage inflation
arising from industry wide collective labour
agreements in the Netherlands and strategic
investment to strengthen the management team,
and one off costs associated with business
improvement projects in Finland.
Adjusted operating profit declined to £29.6m
(2024: £35.3m) and adjusted operating profit
margin was 120 basis points lower at 6.3% largely
reflecting lower sales in Finland and the continued
impact of inflationary pressure on overheads
across both geographies.
Market conditions in the Netherlands are expected
to recover gradually in 2026 after a relatively
subdued second half of 2025. The formation of a
new minority coalition government is a positive
development; however, cross party support will be
essential to advance the policy measures required
to support the construction sector in the near
term. The medium-term outlook in the Netherlands
remains positive, supported by a strong project
pipeline among major construction contractors
and a persistent structural housing shortage,
underpinned by continued population growth. The
recovery of the construction market in Finland is
expected to be further delayed with any meaningful
improvement in volumes in 2026 likely to be
weighted towards the second half.
A new branch was opened in Harderwijk in 2025,
advancing our strategy of targeted expansion into
the eastern Netherlands and complementing our
strong existing footprint across the west, central,
north, and south of the country. Good progress
was achieved in the Netherlands in 2025 on a multi
year business improvement initiative focused on
the operating model and supporting systems,
which, once fully implemented, will enhance
customer experience, increase efficiency, and
reduce cost to serve.
Anu Ora was appointed as the new CEO of IKH
with effect from June 2025. Anu is a highly
experienced business leader with extensive
experience in the food retail sector and the
automotive parts distribution industry in Finland.
Anu, together with recent appointments
strengthening the senior management team, will
be focused on further reinforcing and developing
IKH’s proposition in the marketplace.
Performance 2025 £’m 2024 £’m Change* Constant Currency Change*
Revenue 469.7 469.3 0.1% (1.1%)
Adjusted operating profit 29.6 35.3 (16.2%) (17.2%)
Adjusted operating profit margin 6.3% 7.5% (120bps) –
* Change represents the movement between 2025 v 2024 and is based on unrounded numbers.
Regional overview continued
136
Number of branches/stores (2024: 140)
18.6%
Percentage of Group revenue (2024: 20.6%)
14.6%
Percentage of Group adjusted operating profit
excluding central activities (2024: 18.6%)
Key brands
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Number of branches/stores (2024: 92)
8.5%
Percentage of Group revenue (2024: 1.3%)*
6.6%
Percentage of Group adjusted operating profit
excluding central activities (2024: 0.2%)*
Key brands
Iberia
Our Iberia segment comprises Salvador Escoda, a
Spanish distributor of Heating, Ventilation and Air
Conditioning (“HVAC”), water, and renewable
energy solutions serving professional installers
across the residential, commercial, and industrial
markets, which the Group acquired on 30 October
2024. The business offers a portfolio of more than
100,000 products focused on the HVAC sector,
over 90% of which are specialised technical
installation items serving installation companies,
technicians and small distributors. The business
stands out for its extensive private label offering
with high quality own brands accounting for
approximately 60% of sales in 2025.
Salvador Escoda’s operations span 93 branches
positioned across Spain, supported by four key
distribution centres located in Barcelona, Madrid,
Seville and Valencia. Although its network reaches
most parts of the country, Salvador Escoda has a
particularly strong footprint in Spain’s warmer
regions, including Catalonia, Valencia, Andalusia
and Madrid underpinned by favourable demand
dynamics for energy efficient HVAC solutions.
Salvador Escoda reported revenue of £212.9m
(2024: £29.7m) and delivered an adjusted
operating profit of £13.6m (2024: £0.3m) in 2025
representing an adjusted operating profit margin of
6.4%. The year on year increase reflects the benefit
of an additional ten months of trading in 2025
compared with the prior year. Trading to date,
under the Group’s ownership of the business, has
been in line with pre-acquisition expectations.
On a pro forma basis in comparison to prior year,
average daily like for like revenue increased by 6.1%
compared with 2024, driven by strong growth in
the air conditioning, ventilation and refrigeration
categories, as well as generally favourable market
conditions. Gross margin declined slightly in
comparison to prior year, primarily due to
competitive pressure across certain product
categories and discounting to sell through aged
inventory. Overheads were higher, reflecting
inflationary pressures, the opening of new
branches and additional recruitment to strengthen
the management team. Taking all factors together,
adjusted operating profit for 2025 was higher than
prior year, largely due to the improved sales
performance.
The Spanish economy delivered another year of
strong expansion in 2025, with GDP expected to
grow by approximately 3%, driven by rapid
population growth, strong private investment, and
continued strength in the tourism sector. The
Spanish construction market is forecast to
continue its recovery momentum, with growth of
around 3–4% anticipated in both 2025 and 2026,
supported by sustained housing demand,
substantial investment in renewable energy and
transport infrastructure, and the accelerating shift
towards energy efficient and sustainable building
practices. The HVAC sector is set for robust
growth, driven by tighter energy efficiency
regulations, rising consumer focus on efficiency,
the adoption of advanced technologies in retrofit
projects, and the impact of climate change
increasing temperatures across the Iberian
Peninsula.
Salvador Escoda has been successfully integrated
into the Group during its first full year of ownership.
A comprehensive due diligence process enabled a
well structured integration programme, which was
positively embraced by local management and
strengthened through active collaboration with
Group functions and sister businesses. Despite
navigating significant change in 2025, the business
delivered a stronger trading performance,
outperforming the prior year on both a reported
and pro forma basis. The investments made in
2025 to strengthen the management team have
created a strong foundation for the business to
accelerate both organic and inorganic growth in
the coming years.
The Group continues to support the local
management team in driving organic growth, with
new branches opened in Vic in Catalonia and
Plasencia in Extremadura in the year. We
continued to advance our pipeline of acquisition
opportunities across the HVAC sector and
adjacent sectors within the highly attractive and
fragmented Iberian market. This region provides a
strong platform for us to act both as a consolidator
and a long term compounding growth business,
supporting our ambition to substantially scale our
operations over the next five years.
Effective from early January 2026, Mario Ballarín
stepped into the role of CEO for our Iberia
business, where he will lead the advancement of
the Group’s growth ambitions in the region. Mario
brings extensive experience in driving business
performance, acquisitions, and integrations,
gained during his time at Bunzl plc, where he most
recently served as Managing Director for South
and Eastern Europe, the Middle East, and the
Nordics.
Performance 2025 £’m 2024* £’m
Revenue 212.9 29.7
Adjusted operating profit 13.6 0.3
Adjusted operating profit margin 6.4% 1.1%
* Salvador Escoda was acquired on 30 October 2024.
Regional overview continued
27
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Corporate Governance
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Financial Statements
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Supplementary Information
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Financial Statements
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Supplementary Information
Overview
The Group’s businesses in the Island of Ireland
contributed 42.5% (2024: 44.5%) of Group revenue,
Great Britain 30.4% (2024: 33.6%), Northern Europe
18.6% (2024: 20.6%) and Iberia 8.5% (2024: 1.3%).
Our geographies broadly had one fewer trading
daycompared to the same period in the prior year,
except for the Netherlands, which had two fewer
trading days and Spain which has one day more
forthe period under ownership.
Revenue
Group revenue was up 10.4% to £2.52bn from
£2.28bn in 2024. Group revenue in the like-for-like
business increased by 1.3% (£30.1m) on the prior
year. The growth in average daily like-for-like
revenue was 1.7% compared to prior year.
Incremental revenue from the Salvador
Escodaacquisition, which was completed in
2024,increased revenue by £180.1m. The HSS
HireIreland acquisition, which completed on
31 May 2025, increased revenue by £14.5m.
New branches opened in 2024 and 2025 in The
Netherlands (five), Great Britain (three) and Spain
(two) contributed incremental revenue of £3.0m
in2025. Business disposals and closed branches
reduced revenue by £8.0m in 2025.
Currency translation of revenue in the euro
denominated businesses to sterling increased
revenue by £17.6m as a stronger euro slightly
increased the level of reported results as compared
to the prior year. The average Sterling/Euro rate of
exchange for the year ended 31 December 2025
was Stg85.68p compared to Stg84.66p for the
year ended 31 December 2024.
Adjusted operating profit
Adjusted operating profit of £190.2m was up from
£177.5m last year, an increase of £12.7m (7.1%).
This result for the year included property profit
of£5.9m (2024: £4.0m) which relates to profit
onproperty disposals of £2.8m, a fair value gain
of£1.0m on two investment properties in Ireland
and an additional fair value gain of £2.1m on one
investment property in Great Britain.
Adjusted operating profit before property profit
of£184.3m was up from £173.5m last year, an
increase of 6.2%. The adjusted operating profit
margin before property profit declined by 30 basis
points to 7.3%.
Net finance income and expense
The net finance expense was £9.7m which
compares to a net finance expense of £0.1m
forthe year ended 31 December 2024. This
incorporates an interest charge of £15.2m
(2024: £15.0m) on lease liabilities recognised
under IFRS 16. Interest income on cash deposits
amounted to £16.0m (2024: £23.4m).
Returns on deposits and account balances
decreased in the full year and reflected lower
Bankof England and European Central Bank base
rates compared to the prior year and lower cash
balances following share buybacks, the Group’s
Spanish acquisition in 2024 and the acquisition
ofHSS Hire Ireland in 2025.
Interest payable on bank borrowings denominated
ineuro and US Private Placement Senior Unsecured
Notes was £8.5m (2024: £8.3m). This reflects a
combination of weaker sterling offset by lower
interest rates payable on bank debtas the European
Central Bank rates reduced in 2025.
Financial review
David Arnold, Chief Financial Officer
Financial review
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Financial Statements
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Supplementary Information
Financial review continued
The net finance expense included a foreign
exchange translation loss of £2.4m which
compares to a gain of £1.6m in the prior year.
The average sterling/euro rate of exchange for the
year ended 31 December 2025 was Stg85.68p
(31 December 2024: Stg84.66p). The sterling/euro
exchange rate at 31 December 2025 was
Stg87.26p (31 December 2024: Stg82.92p).
Taxation
The income tax expense of £28.6m (2024: £30.5m)
is equivalent to an effective tax rate (before the
exceptional profit on disposal) of 18.2% of profit
before tax (2024: 20.0%). The rate after including
the exceptional profit on disposal is lower at 17.3%
(2024: 20.0%). The rate is lower than anticipated at
the start of the financial year and reflects the blend
of the Group’s corporation tax on profits in the five
countries where the Group operates and a credit
relating to updated estimates of amounts relating
to prior years.
Certain items of expenditure charged in arriving at
profit before tax, including depreciation on
buildings, are not eligible for a tax deduction.
This factor increased the rate of tax payable on
profits above the headline rates.
Cash flow
Cash generated from operations for the year of
£310.3m (2024: £298.3m) was strong and
benefitted from a reduction in working capital of
£12.0m (2024: reduction of £14.9m). Working
capital and inventory is a critical component of our
customer proposition; maintaining high levels of
stock availability is a key focus for all Grafton’s
businesses. The reduction in working capital was
achieved without compromising availability.
Interest paid in the year amounted to £24.3m
(2024: £22.5m) which included interest of £15.2m
on IFRS 16 lease liabilities (2024: £15.0m). Taxation
paid was £34.2m (2024: £29.0m). Cash flow from
operations after the payment of interest and
taxation was £251.8m (2024: £246.8m).
The cash outflow on the dividend payment
was£72.6m (2024: £73.2m) and £56.6m
(2024: £80.9m) was spent on the buyback of
shares, excluding transaction costs. The total
cash outflow on the dividend payment and
buyback of shares was £129.2m (2024: £154.1m),
excluding transaction costs.
Free cash flow of £168.3m (2024: £178.2m) was
generated in the year which represents a 88%
conversion to cash of adjusted operating profit
(2024: 100%). The definition of free cash flow is
set out in the Alternative Performance Measures
but it can be seen that it includes the payment of
interest, lease costs, tax and replacement capital
expenditure. Over the last four years, the Group
has generated £709m of free cash flow which is
equivalent to almost 40% of Grafton’s market
capitalisation as at 31 December 2025 and is a
demonstration of the strength of the Group’s
businesses to turn adjusted operating profit into
free cash flow.
Capital expenditure and investment in
intangible assets
The Group continued to maintain appropriate
control over capital expenditure which amounted
to £37.0m (2024: £39.6m). There was also
expenditure of £9.2m (2024: £7.3m) on software
that is classified as intangible assets.
Asset replacement capital expenditure of £21.5m
(2024: £23.9m) compares to the depreciation
charge (before IFRS 16) on property, plant and
equipment (“PP&E”) of £47.1m (2024: £42.8m) and
related principally to the replacement of
distribution vehicles, replacements/upgrades to
plant and machinery, roof repairs, hire assets,
forklifts, racking and other assets required to
operate the Group’s branch network.
The Group incurred development capital
expenditure of £15.5m (2024: £15.7m) on a range
of organic development initiatives including new
branches and branch upgrades and extensions in
Woodie’s, Chadwicks and also in the Netherlands.
The proceeds received from the disposal of PP&E,
properties held for sale and investment properties
was £5.3m (2024: £5.7m). The amount spent on
capital expenditure and software development, net
of the proceeds received on asset disposals, was
£40.9m (2024: £41.1m).
Pensions
The Group operates four legacy defined benefit
schemes (one in the UK and three in Ireland),
allofwhich are now closed to future accrual.
Thedefined benefit pension schemes had
anaccounting surplus of £7.6m at the year end,
animprovement of £6.3m from a surplus of £1.3m
at 31 December 2024.
The deficit on the UK scheme reduced by £5.5m to
£3.3m and the surplus on the schemes in Ireland
increased by £0.7m to £11.6m.
There was a scheme deficit of £0.7m
(31 December 2024: £0.8m) related to the
Netherlands business.
Net debt/cash
Net debt (including lease obligations) at
31 December 2025 was £123.4m
(31 Dec 2024: £131.7m). Our net cash position,
before recognising lease liabilities, was £274.0m
(31 Dec 2024: £272.1m).
The Group’s policy is to maintain its investment
grade credit rating while investing in organic
developments and acquisition opportunities. The
Group’s dividend policy is to maintain cover at
between two and three-times earnings.
Liquidity
Grafton was in a very strong financial position at
the end of the year with excellent liquidity, net cash
before IFRS 16 lease liabilities and a robust
balance sheet.
The Group had liquidity of £776.8m at
31 December 2025 (31 December 2024: £776.2m).
As shown in the analysis of liquidity on page 193,
accessible cash and deposits amounted to
£491.8m (31 December 2024: £505.4m) and there
were undrawn revolving bank facilities of £285.0m
(31 December 2024: £270.8m).
Group revenue
£2.52bn
2024
2023
2022
2021
2025
£2.28bn
£2.52bn
Adjusted operating profit before
property profit
£184.3m
2024
2023
2022
2021
2025
£173.5m
£184.3m
Adjusted operating profit
£190.2m
2024
2023
2022
2021
2025
£ 17 7. 5 m
£190.2m
Free cash flow
£168.3m
2024
2023
2022
2021
2025
£178.2m
£168.3m
Net cash (before IFRS 16 leases)
£274.0m
2024
2023
2022
2021
2025
£ 27 2 .1m
£274 .0m
Adjusted return on capital employed
10.9%
2024
2023
2022
2021
2025
10.3%
10.9%
30
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Financial Statements
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Supplementary Information
At 31 December 2025, the Group had bilateral loan
facilities of £337.6m (2024: £328.3m) with four
relationship banks, which all mature in August
2029 and debt obligations of £139.3m
(31 December 2024: £132.3m) from the issue of
unsecured senior notes in the US Private
Placement market.
The revolving loan facilities of £337.6m were
originally put in place in August 2022 for a term of
five years to August 2027. The arrangements
included two one-year extension options
exercisable at the discretion of the Group and the
four banks. The second one-year extension option
was agreed in July 2024 and these facilities are
now repayable in August 2029. This is
sustainability linked debt funding and includes an
interest rate incentive connected to the
achievement of carbon emissions, workforce
diversity and community support targets that are
fully aligned to the Group’s sustainability strategy.
The average maturity of the committed bank
facilities and unsecured senior notes was 3.6 years
at 31 December 2025 (2024: 4.6 years).
The Group’s key financing objective continues to
be to ensure that it has the necessary liquidity and
resources to support the short, medium and
long-term funding requirements of the business.
These resources, together with strong cash flow
from operations, provide good liquidity and the
capacity to fund investment in working capital,
routine capital expenditure and development
activity including acquisitions.
The Group’s gross debt is drawn in euro and
provides a hedge against exchange rate risk on
euro assets in the businesses in Ireland, the
Netherlands, Finland and Spain.
Shareholders’ equity
Shareholders’ equity increased by £52.5m to
£1.65bn at 31 December 2025 from £1.60bn at
31 December 2024. Profit after tax increased
shareholders’ equity by £136.6m. There was a
gain of £40.5m on retranslation of euro
denominated net assets to sterling at the year-end
rate of exchange. Shareholders’ equity was
increased for a remeasurement gain (net of tax) of
£2.3m on the pension schemes and was reduced
for dividends paid of £72.6m and by £56.7m for the
buyback of shares. Other changes increased
equity by £2.4m.
Return on capital employed
Adjusted Return on Capital Employed increased by
60 basis points to 10.9% (2024: 10.3%).
Principal risks and uncertainties
The principal risks affecting the Group are set
outon pages 33 to 38.
David Arnold
Chief Financial Officer
4 March 2026
Financial review continued
Overall responsibility for establishing
and maintaining an effective risk
management and internal control
framework and for reviewing
its effectiveness.
Risk management
Introduction to risk
management
The Directors acknowledge that they have overall
responsibility to establish and maintain an
effective risk management and internal control
framework and for reviewing its effectiveness. The
Directors recognise that such a system is designed
to manage rather than eliminate risk and can only
provide reasonable but not absolute assurance
against material misstatement or loss.
Risk management process
Risk management is a key factor in the successful
delivery of the Group’s strategic objectives.
The Group has established a risk management
process, which is closely aligned with the overall
strategic development of the Group, to ensure
effective and timely identification, reporting and
management of risk events that could materially
impact upon the achievement of Grafton’s
strategic objectives and financial targets.
A process for identifying, evaluating and managing
significant risks faced by the Group, in accordance
with the UK Corporate Governance Code and the
FRC Guidance on Risk Management, Internal
Control and Related Financial and Business
Reporting, has been in place throughout the
accounting period and up to the date the financial
statements were approved.
These risks are reviewed by the Audit and Risk
Committee and by the Board, who also consider
any emerging risks for inclusion on the Corporate
Risk Register (CRR).
Executive management is responsible for
implementing strategy and for the continued
development of the Group’s businesses within the
parameters set down by the Board.
The Group’s Risk Management Framework is
designed to facilitate the development,
maintenance, operation, and review of risk
management processes that fulfil the Board’s
corporate governance obligations and support the
Group’s strategic objectives.
Group Risk Committee
The Group Risk Committee (GRC) is an internal
committee comprised of representatives of the
Group’s businesses and Group Head Office
functions. The GRC and executive management
are responsible for the oversight of risk
management in the Group.
The Committee is chaired by the Group CFO and
reports to the Audit and Risk Committee (A&RC).
The GRC met four times during the year to review
the risk management processes in the businesses
and to oversee the CRR. This included a horizon
scanning exercise to identify any new or emerging
risks which may impact the Group.
In addition, the GRC performed deep dive reviews
of specific risk areas including: information
security and data protection; Artificial Intelligence
(AI) and digital strategy; risks relating to
colleagues; sustainability and the impact of
climate change on business operations; and health
and safety risk. The results of these exercises were
shared with businesses and, where relevant, new
mitigating actions were established.
Emerging risks
The Board is required to undertake, under the 2024
UK Corporate Governance Code, a robust
assessment of the emerging risks that may impact
the Group. In response to this requirement,
consideration of emerging risks has been
integrated into the Group’s risk management
practices. Each business unit is required to
maintain an individual Business Risk Register
(BRR). Changes to BRRs, including any new risks
or risks that have increased in severity, are
reported and discussed at GRC meetings. As well
as the annual Horizon Scanning exercise
performed by the GRC, the A&RC performs a
review of the CRR each January which includes
consideration of any emerging risks.
Identified emerging risks which are not currently
considered significant enough to be recognised on
the CRR are recorded on a ‘watchlist’. Watchlist
risks are regularly reviewed by the GRC and A&RC
to consider whether they should be promoted to
the CRR.
Risk management framework
Audit & Risk
Committee
Oversees risk
management and internal
controls by reviewing
principal risks on the CRR
monitoring emerging risks,
receiving risk and control
reports from management
and auditors, and
approving audit plans.
Group Risk
Committee
Reviews and updates the
CRR, sets risk policies,
performs risk deep dives
and scans for emerging
risks, promotes best
practices, initiates
Group-wide risk
management actions,
andmonitors business
riskregisters.
Group Internal
Audit
Develops and delivers a
risk-based annual audit
plan, reviews internal
controls and risk
management actions, and
produces reports on audit
findings and progress on
activity to complete
control improvement
actions.
Business units,
Group functions
and colleagues
Responsible for managing
risk, maintaining and
monitoring BRRs,
identifying and reporting
emerging risks, and
implementing actions to
address audit findings at
business unit and
functional levels.
Business units, Group functions and colleagues
Group
Risk Committee
Group
Internal Audit
Audit
Risk Committee
Board
of Directors
31
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Financial Statements
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Supplementary Information
LIKELIHOOD
Probable Possible Unlikely Rare
Minor Moderate Major Severe
IMPACT
Risk management continued
Principal risk assessment
Corporate risk register
The CRR records the Group’s material risks, their
root causes and key risk indicators, and the actions
and controls in place and required to manage each
to an acceptable level of risk consistent with the
Group’s risk appetite.
Risks are assessed and prioritised based on
theirpotential likelihood of materialising in the
nextthree years and their potential impact. This
includes consideration of both financial (i.e. profit
and cash) and non-financial (e.g. reputation,
management effort) impacts. The principal risks
facing the Group are set out in detail on pages
33to 38.
All updates to the CRR are approved by the Group
Risk Committee and reported to the Audit and
RiskCommittee.
The Group also maintains a ‘watchlist’ of emerging
risks and risks that have previously been on theCRR.
This is regularly reviewed by the GRC toconsider
whether any should be promoted totheCRR.
Risk appetite
‘Risk appetite’ describes the amount of risk we are
willing, as a Group, to tolerate, accept or pursue
inorder to achieve our strategic objectives.
TheGroup has defined its risk appetite for each
risk on the CRR, including key risk indicators and
tolerance levels.
We have a higher (Open) appetite for risks that
present us with a clear opportunity for reward.
Weactively seek out those risks that provide the
greatest opportunities, whilst balancing with
appropriate mitigating actions, for example, with
acquisitions and our AI and digital strategy.
We have a lower (Cautious/Minimalist) appetite
forrisks that only have negative consequences,
particularly when they can impact our colleagues,
values, or business model. For example, health
andsafety, cyber security and internal controls.
Weaim to eliminate these risks, as much as
possible, with our mitigation efforts. The Board
regularly reviews their risk appetite for the Group’s
principal risks and uses this when deciding on risk
mitigation strategies.
Key to change in risk assessment
 
Increased
 
No change
 
Decreased
 
New
1
Corporate risk register heat map
Principal risk Risk appetite
1
Macro-economic conditions Open
2
Cyber security and data protection Cautious
3
Organic growth Open/Cautious
4
Acquisitions Open/Cautious
5
Competition Open
6
Colleagues – retention, recruitment, succession, diversity, wellbeing Open
7
Supply chain Cautious
8
IT systems implementation Cautious
9
AI and digital strategy Open/Cautious
10
Health and safety Minimalist/Cautious
11
Sustainability and climate change Cautious
12
Internal controls, fraud and ethics Cautious
5
6
2
4 3
11
97
8
10
12
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Financial Statements
191-198
Supplementary Information
Risk management continued
Key risks
The risks identified are those that could have a material
adverse effect on the Group’s business model, future
performance, solvency or liquidity.
These principal risks are incorporated into the modelling activity
performed to assess the ability of the Group to continue in
operation and meet its liabilities as they fall due for the purposes
of the Viability Statement on page 39.
1. Macro-economic conditions
The Group’s trading is affected by economic conditions and construction activity across its geographies.
Markets are cyclical with demand in part dependent on household discretionary spending on home
improvement projects. This can be influenced by factors including interest rates, credit availability,
inflation, property values, demographics, employment and GDP. Markets can also be impacted by
geopolitical events including international conflict, political stability and government policy.
Risk owner: The Board and business unit management teams
Potential impacts
• A deterioration in economic conditions in
Ireland, the UK, the Netherlands, Finland, or
Spain could result in lower demand in the
Group’s businesses and reduced profit levels.
KPIs
• Monitoring of key economic indicators for
relevant markets, including GDP growth,
unemployment and inflation rates.
• Monthly Management Information Pack
tracking trading performance against budget
re-forecast and prior year.
Mitigations
• Diverse geographical spread of Group businesses reduces exposure to single markets.
• Annual strategy review by the Board.
• Ongoing monitoring by the Board of Group performance.
• Quarterly Business Reviews by Group management with all business management teams.
• Continuous review of market and geopolitical conditions and indicators to assess investment
allocation.
• Use of business viability models to stress test for an economic downturns and cost increases.
Developments in 2025
The Group continues to assess target businesses across Europe to increase its market diversification.
Businesses have also employed cost control measures in response to challenging market conditions.
Emerging risks
• Significant uncertainty due to global geopolitical tensions.
2. Cyber security and data protection
Increasing levels of cyber crime represent a threat to the Group’s businesses and may lead to business
disruption or loss of data. The Group is exposed to the risk of external and internal parties gaining
unauthorised access to Group systems and deliberately disrupting its business. Specific risks exist for
newly acquired businesses in the Group which may not have a sufficient level of security from Day 1,
and where we use third parties for IT services (e.g. cloud facilities) who may not have adequate
resilience and recovery plans.
Risk owner: Information Security Steering Committee (ISSC)
Potential impacts
• A cyber attack could result in a disruption to the
business with the potential for a material loss of
revenue and profitability while systems are
being restored.
• Theft or leakage of sensitive or personal data
may result in regulatory breach, financial loss
and impact the reputation of theGroup.
KPIs
• Monitoring of cyber and data security breaches
and events.
• ISSC scorecard tracking deployment of security
measures including patching, anti-malware
software, firewalls, and penetration testing.
Mitigations
• ISSC including Group and business unit IT and information security management meet quarterly to
monitor external developments and track compliance with security standards.
• IT security and data protections policies, reinforced through mandatory colleague training, and
awareness campaigns. GDPR compliant data processes have been implemented.
• 24/7 monitoring of the Group’s network, supported by a third-party.
• Group Security Incident Management Plan with each business having cyber incident response and
backup plans which are regularly rehearsed.
• Security assessments performed on all key third-party IT service providers.
Developments in 2025
Delivery of projects to enhance the Group’s cyber defence capabilities, including an offensive security
program and an improved email security platform.
Information security resources at Group and business levels have been increased to respond to
increasing threats and ongoing monitoring of compliance with Group standards. Support is provided
to newly acquired businesses, to bring their environments up to this standard.
Emerging risks
• Increasingly sophisticated cyber attacks including the use of AI.
33
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71-114
Corporate Governance
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Financial Statements
191-198
Supplementary Information
3. Organic growth
The ability of the Group’s businesses to grow revenue and profit, through expansion of existing branch
networks and exploiting appropriate opportunities to move into new markets, is key to achieving the
Group’s financial goals. There is also the threat from new business models in the Group’s markets and
the need to respond to changing customer needs and trends.
Risk owner: The Board, Group senior management and business unit management teams
Potential impacts
• Lack of growth of Group turnover and profit due
to lack of appropriate sites for new stores/
branches, poor selection of site locations, or
inefficient store openings.
• Loss of market share due to failure to respond
effectively to new business models and new
product or market opportunities.
KPIs
• Monitoring of market share in relevant sectors.
• Evaluation of new store investments and
development Capex against Group hurdle rates
for operating profit, ROCE and payback.
• Monitoring of daily, weekly and monthly sales
and margin performance against budget.
Mitigations
• Comprehensive Quarterly Business Reviews by Group Management.
• Investment in new stores is subject to Business Case and capital expenditure (Capex) approval
processes.
• The performance of new stores/branches and returns on development Capex projects are subject to
post-investment reports which are reviewed by the Board.
• Lessons learnt from new store/branch openings are shared between businesses.
Developments in 2025
Organic growth risk has been separately recognised on the CRR for the first time.
During 2025 new stores were opened in the Netherlands, Leyland SDM and Salvador Escoda and
businesses including Chadwicks, Woodie’s, Isero and Selco continued to invest in their stores/
branches to ensure they meet and exceed customer expectations.
Emerging risks
• Trends towards modern methods of construction and off-site building.
• Long-term changes in customer needs and expectations.
4. Acquisitions
Growth through acquisition has historically been a key element in the Group’s development strategy.
The Group may not be able to continue to grow if it is unable to identify attractive targets, execute full
and proper due diligence, complete acquisition transactions, integrate the operations of the acquired
businesses and realise the anticipated levels of profitability, cash flows and return on invested capital.
Risk owner: The Board, Group senior management and business unit management teams
Potential impacts
• Lack of growth of Group turnover and profit due
to lack of appropriate acquisition targets.
• Loss of value due to overpaying for new
businesses.
• Under performance, additional cost or
excessive management time due to a failure to
integrate new businesses effectively.
KPIs
• Group Corporate Development pipeline of
acquisitiontargets.
• Evaluation of acquisition targets against
Grouphurdle rates for operating profit,
ROCEandpayback.
• Monitoring of integration activity against
100-day plans and roadmaps.
Mitigations
• Annual Board strategy day reviews and sets criteria for future acquisitions including hurdle rates.
• Group Corporate Development Team and individual businesses actively seeking and engaging with
potential acquisition targets consistent with strategic criteria.
• Detailed due diligence, involving specialist third parties where necessary, for all acquisitions.
• Board and Group senior management approval of all acquisitions subject to delegation of authority
limits.
• Preparation and management of 100-day integration plans and longer-term governance roadmaps.
• Post-investment reviews of all significant platform and bolt-on acquisitions with identification of
lessons learnt and implementation of lessons learned in future acquisitions.
Developments in 2025
The Group has continued to pursue its strategic aim of growth through acquisitions through the
purchase of HSS Ireland in the Island of Ireland segment by Chadwicks and the integration of Salvador
Escoda in the Iberia segment into the Group’s governance and operational framework.
Emerging risks
• Risks from the Group targeting new geographies for its acquisitions.
Risk management – Key risks continued
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
6. Colleagues – retention, recruitment, succession, diversity and wellbeing
Attracting and retaining colleagues with the relevant skills and experience and investing in training and
development is essential to sustaining existing operations and providing a platform for the growth of
the Group. The Group also acknowledges its responsibility towards diversity and inclusion, supporting
the wellbeing of its colleagues, and compliance with new and existing employment regulatory
requirements.
Risk owner: HR Forum and business unit management teams
Potential impacts
• Disruption to business operations due to loss of
key individuals, excessive turnover or
demotivated colleagues.
• Impact on growth due to inability to recruit,
retain and develop appropriately skilled and
diverse colleagues.
• Fines, reputational damage and impact on
management time from a breach of HR
regulation.
KPIs
• Group HR dashboard monitoring metrics
across businesses including turnover rates,
vacancy levels and colleague diversity statistics
(where allowed by local regulation).
• Results of colleague engagement surveys.
• Monitoring of national salary levels and
employment rates.
Mitigations
• Monitoring of HR metrics and resulting actions through Quarterly Business Reviews.
• Group HR Forum, including all business unit HR leads, meets regularly to initiate actions to address
common issues and responses to legislative changes, with external advice, if necessary, to ensure
compliance.
• Colleague engagement surveys conducted with action plans to address areas of concern.
• Established recruitment, performance management and development processes in each business.
• Succession plans in place for key management roles.
• Colleague forums established in each country, together with wellness and diversity programmes.
Developments in 2025
The Group has successfully reduced its overall level of colleague turnover with targeted actions by
specific businesses to improve recruitment and retention. We have increased the net risk level of this
risk to recognise the need for the Group to develop its pool of talent to support its growth ambitions. In
response to this, and as part of our overall HR digital strategy, we are implementing a new
performance management system which will be rolled out across the Group.
Emerging risks
• Changes in society and the workforce and our ability as a business to respond.
5. Competition
Grafton faces volume and price competition in its markets. Actions taken by the Group’s competitors
or new entrants into markets, as well as actions taken by the Group to maintain its own
competitiveness, efficiency and reputation for value for money, may exert pressure on product pricing,
margins and profitability.
Risk owner: Business unit management teams
Potential impacts
• Loss of market share to competitors and new
entrants resulting in lower revenue and profit.
• Lower sales prices to respond to competitor
actions resulting in reduced gross margins and
operating profits.
KPIs
• Monitoring of market share in relevant sectors.
• External scanning to obtain information
ofcompetitors’ activities and potential
newentrants.
• Monitoring of daily, weekly and monthly sales
and margin performance against budget.
Mitigations
• Comprehensive Quarterly Business Reviews by Group Management.
• Businesses monitor pricing developments and take corrective action when necessary.
• Businesses conduct surveys and review feedback from customers and take actions to maintain and
improve quality of overall product and customer service proposition.
• Investment by businesses in their distribution networks, existing branches and new businesses and
stores/branches.
Developments in 2025
During 2025, the continuation of suppressed consumer demand, particularly in the UK RMI and
Finnish construction markets, has meant that competitive pressures have remained high. The Group
and its businesses have continued to invest in its sales and distribution network to meet customer
needs and acquire bolt-on businesses, such as HSS Hire Ireland, to enhance the customer service
proposition.
Emerging risks
• Failure to harness AI technologies to drive efficiencies and generate value could make us less
competitive.
Risk management – Key risks continued
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
8. IT systems implementation
The Group’s businesses are dependent on IT systems and supporting infrastructure to trade. Either
the failure of key systems or the inability to compete through not having up-to-date trading platforms
could have a serious impact on the business. The Group accepts the risks of upgrading and
implementing new IT systems but recognises that these significant projects may result in over-runs
incurring additional cost and time, or failure to deliver required specification affecting current business
operations, resulting in data loss and impact on reputation.
Risk owner: Group IT and business unit management teams
Potential impacts
• Failure of system implementation to deliver
required specification disrupts business
operations and impacts on reputation.
• Project over-runs result in additional cost,
resources, and management time.
KPIs
• Regular updates to the Board on significant IT
projects and their status.
• Steering committees, including representatives
from Group functions meet regularly to review
project status.
Mitigations
• The Group Project Management Framework sets out the expected standards for significant change
projects, including governance and assurance structures, and project and risk management
reporting.
• Project business cases are subject to Group CEO and Board approval.
• System changes subject to full user acceptance and end-to-end performance testing.
• Go/No-go and business acceptance criteria defined for each phase of system deployment.
• Group Internal Audit perform reviews of initial project governance and risk management and provide
ongoing assurance through attendance at steering committee meetings with Group IT.
• Following implementation, the projects go through a thorough close process which includes a
lessons learnt exercise, with the results shared around the Group.
Developments in 2025
During 2025, the Group successfully completed an ERP upgrade project in Woodie’s and an ERP
replacement in Leyland SDM. A multi-year change programme for the Netherlands, which includes the
replacement of its ERP system has continued throughout 2025 with successful deployment of
modules covering procurement and central distribution for the Isero business.
A business case for the replacement of the ERP system in IKH in the Northern Europe segment has
been approved and it is expected that the implementation project will commence in 2026.
7. Supply chain
Product availability is a key factor for all Group businesses and the Group is exposed to the risk of
failure to supply by key suppliers, or to international events which may disrupt the supply chain or
increase the cost of products sold. The Group recognises its potential exposure to ethical sourcing
risks for certain products (e.g. timber) and the ethical behaviour of organisations in its supply chain
which may not meet Grafton’s expected standards or regulatory requirements. There is also a risk that
the Group does not collect all supplier rebates receivable, being a material amount, or that rebates are
accounted for incorrectly.
Risk owner: Group Procurement Board and business unit management teams
Potential impacts
• Disruption to business operations due to
supplier failure or interruption to the supply
chain.
• Loss of revenue and profit, and impact on
customers, due lack of availability of key
products.
• Fines and reputational damage from unethical
sourcing or a regulatory breach.
• Loss of rebate revenue and inaccurate reporting.
KPIs
• Businesses monitor product availability on a
weekly basis.
• Supplier performance and viability is
monitored.
• Ecovadis system assesses supplier risk.
• Rebate income tracked and accrued monthly.
Mitigations
• Businesses maintain relations with key suppliers and proactively manage instances of supplier
shortages and product allocations.
• Where possible, dual sourcing or identification of alternative suppliers for key products.
• Group Procurement Board including business unit procurement leads meets regularly to identify
cost and buying practice efficiencies.
• Supplier Code of Conduct issued and the use of EcoVadis to screen and obtain information from key
suppliers to confirm compliance with Grafton standards and relevant regulatory requirements.
• Written agreements with suppliers detailing the terms of all rebate arrangements. Finance and
procurement teams work closely to validate amounts due from suppliers based on these
agreements and quantities purchased.
Developments in 2025
Despite ongoing international events and uncertainty, key product availability has remained high at
most of our businesses. The Group has been implementing procedures to meet the requirements of
EU regulations, Carbon Border Adjustment Mechanism, the EU Due Diligence Directive and the EU
Deforestation Regulation. EcoVadis has been rolled out to all businesses who are engaging with
suppliers to improve sourcing standards.
Emerging risks
• Escalating geopolitical tensions including tariffs.
• Additional legislation for ethical sourcing and uncertainty over implementation requirements.
Risk management – Key risks continued
36
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
10. Health and safety
The nature of the Group’s operations exposes colleagues and third parties to health and safety risks.
This includes at our own branches, stores and sites, where risks include the manual handling of
products, slips, trips and falls and incidents involving, product storage and movement, forklift trucks
and delivery vehicles. Risks also exist during the delivery of products to customer sites including
loading and off-loading.
Risk owner: Board, Group Health & Safety and business unit management teams
Potential impacts
• Loss of life or injury to colleagues, customers
and third parties due to unsafe practices.
• Loss of reputation, fines from regulators and
impact on operations due to non-compliance
with health and safety legislation.
KPIs
• Monthly tracking of Lost Time Incidents Rates,
both frequency and severity, at Group and
business level.
• Monitoring of results of external inspections
and internal compliance audits.
• Colleague engagement survey responses on
health and safety at work.
Mitigations
• Health and safety forms part of the agenda at Group Board meetings, Quarterly Business Reviews
and business leadership meetings.
• Reporting covering injury frequency rates, lost time, hazard identification, risk management and the
cost of accidents and incidents are regularly reviewed by the Board and business management.
• Group minimum health and safety standards have been established and rolled out to businesses.
• Businesses record and report to Group on accidents and near-misses, with lessons learnt shared.
• Colleagues are required to complete health and safety training relevant to their role. Completion is
monitored by management.
• Compliance with health and safety regulations is monitored through a combination of external
inspections, site reviews by business unit compliance teams and Group internal audits.
Developments in 2025
The focus for 2025 has been on embedding Group minimum health and safety standards across
businesses, with particular emphasis on recent acquisitions.
9. AI and digital strategy
The Group recognises the need to have a digital strategy, including an online order and sales capability
that meets the needs of current and future customers. There are also risks from the use of new
technology, including AI, which may lead to unintended outcomes and impact operations and the
Group’s reputation.
AI and Robotic Process Automation (RPA) technology presents opportunities for the Group to improve
productivity although there is a need for the skills and resources to deliver on these.
Risk owner: Group AI Governance and Advisory Committee and business unit management teams
Potential impacts
• Loss of sales and profit if online sales capability
does not match competitors or fails to meet
customers’ expectations.
• Loss of competitiveness if the Group does not
use technology to improve efficiency.
• Loss of reputation and impact on operations if
AI is not used in an ethical manner or results in
unintended consequences.
KPIs
• Monthly tracking against budget of
onlinerevenue and growth.
• Group register of AI use is maintained and
monitored by the Group AI Governance
andAdvisory Committee.
Mitigations
• Businesses have specific digital strategies and improvement plans, with investments reviewed and
approved by Group management through the Capex and budget process.
• Monitoring of online sales performance through quarterly business reviews.
• Group AI Governance and Advisory Committee reviews and approves all new AI uses, including
confirming compliance with data protection and AI regulations (e.g. EU AI Act). Policies for AI
Governance and acceptable use have been issued.
• Investment in training for colleagues on the use of AI.
Developments in 2025
Digital and AI strategy risk has been separately recognised on the CRR for the first time.
The AI Governance and Advisory Committee has been formally established as a sub-committee of the
GRC and has formalised the approval process for new uses of AI and other emerging technologies.
Businesses have continued to invest in and improve their online offerings and channels and are
increasing the use of AI and RPA technology to enhance their operational processes.
Emerging risks
• The significant pace of development of AI and related technologies means that businesses need to
invest in solutions and their colleagues so they have the relevant skills and knowledge to use it and
ensure it is used in an ethical manner and complies with new regulation.
Risk management – Key risks continued
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Strategic Report
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Sustainability Statement
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Corporate Governance
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Financial Statements
191-198
Supplementary Information
12. Internal controls, fraud and ethics
The Group is exposed to the risk of failure in financial or operational controls in individual business units,
including the failure to prevent or detect fraud. There are also risks to the Group where colleagues, or
third parties working in association with Grafton, behave unethically or commit illegal acts.
Risk owner: Group Risk Committee
Potential impacts
• Financial loss, potential fines and impact on the
Group’s reputation with stakeholders and
regulators due to fraud, financial misstatement,
internal control failure, or non-compliance with
legislation.
• Additional costs of complying with new
regulations.
KPIs
• External and internal audit reporting of control
deficiencies and progress of remediation
actions.
• Reporting on instances of fraud and theft
across the Group and SpeakUp reports.
Mitigations
• Group Code of Conduct and Business Ethics and associated policies with mandatory colleague training.
• SpeakUp process established for colleagues and third parties to report concerns.
• Annual conflict of interest declaration process.
• Group Accounting Manual and delegation of authority matrices set out Group and business approval
thresholds and requirements.
• Risk management, internal controls and assurance framework including Group Internal Audit and
business level branch audit and loss prevention teams.
Developments in 2025
The Group has continued work that commenced in 2023 to comply with the internal control
requirements of Provision 29 of the 2024 UK Corporate Governance Code which is effective from
2026. This will establish an annual programme of testing all material financial, operational,
compliance and reporting controls including key anti-fraud controls.
The Group has also refreshed its fraud risk assessment as part of its compliance with the UK
Economic Crime and Transparency Act.
Emerging risks
• Use of AI to facilitate fraudulent acts.
11. Sustainability and climate change
The Group accepts its responsibility to minimise the impact its operations have on the environment and
to promote sustainable and ethical business practices amongst its customers, suppliers and colleagues.
The Group is also committed to being an inclusive employer and promoting diversity in its workforce.
The Group also recognises the potential financial and operational impact of wider climate change on
its business activities, either due to physical risks such as adverse weather events, or transitional risks
including changes in regulation affecting operations, our cost base or the products we sell.
Risk owner: Executive Sustainability Committee (ESC)
Potential impacts
• Increased operating costs due to climate and
environmental legislation and taxation.
• Potential fines for non-compliance.
• Impact on reputation if climate and
sustainability commitments are not met.
• Interruption to operations and additional costs
due to physical climate change threats (e.g.
flooding of branches, stores and sites, and
adverse weather impacting our supply chain).
KPIs
• Quarterly sustainability KPI dashboard which is
monitored by the ESC. Includes: reporting
against commitments for cutting carbon
emissions; diversity targets; community
investment; and responsible sourcing.
Mitigations
• A Group Sustainability Strategy is established with progress reported on annually. Businesses have
their programmes with activities aligned with Group targets.
• ESC meets regularly to review the quarterly KPI dashboard performance against Group targets,
including net-zero commitments.
• Developments in sustainability regulation are monitored by the Group Sustainability Team with
advice from external experts where necessary.
• Physical climate change risks and adverse weather events are monitored. Business continuity plans
are in place and sites at higher risk of flooding have flood response plans.
Developments in 2025
Businesses have continued to move forward with their sustainability plans and the Group remains on
target to meet its net-zero commitments. This includes establishing a sustainability strategy for
Salvador Escoda. The Group continues to monitor physical risks to its sites and take action to improve
resilience for at-risk locations.
Emerging risks
• Rapidly changing sustainability legislation and reporting requirements.
• Extreme climate conditions and events that may disrupt operations and supply chains.
Risk management – Key risks continued
38
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Annual Report and Accounts 2025
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Viability Statement
The Directors have assessed the viability of the Group over a
three-year period to 31 December 2028, taking account of the
Group’s current position and prospects, the Group’s strategy
and principal risks and how they are managed as documented
on pages 33 to 38. Based on this assessment, the Directors
have a reasonable expectation that the company will be able
to continue in operation and meet its liabilities as they fall due
over the period to 31 December 2028.
Period of viability statement
In accordance with Provision 31 of the UK
Corporate Governance Code 2024, the Board has
reviewed the length of time to be covered by the
Viability Statement, particularly given its primary
purpose of providing investors with a view of
financial viability that goes beyond the period of
the Going Concern Statement. The Directors have
determined that the three-year period to
31 December 2028 is an appropriate period over
which to provide its viability statement. The Group
prepares five-year plans as part of its annual
strategy review, however given the inherent
uncertainties, the outer two years are more
difficult to forecast. These two years are used
mainly for scenario planning with the Board
placing greater reliance on the initial three-year
period.
Approach to assessing viability
In making this statement the Directors have
considered the resilience of the Group, taking
account of its current position, the principal risks
facing the business in severe and reasonable
scenarios, and the effectiveness of mitigating
actions that could be taken to avoid or reduce the
impact or occurrence of the underlying risks that
would realistically be open to them in the
circumstances. This assessment has considered
the potential impacts of these risks on the
business model, future performance, solvency and
liquidity over the period with particular
consideration given to the Group’s debt funding
covenants including its interest cover covenant.
The Directors have also considered the Group’s
resilience and management’s response to the
Covid-19 pandemic as well as the experience from
the 2008 Global Financial Crisis.
The principal scenarios considered in the review
are those where negative macro-economic and
other impacts would be experienced across all of
the Group’s businesses. These scenarios ranged
from depressed economic activity levels in the
Group’s markets and intense competitive
pressures, to more severe cyclical economic
downturns. The Group also reviewed and
considered the impact of a cyber security denial of
service attack on the business which might restrict
trading and the operation of the Group’s
businesses. In addition, the assessment
considered a ‘reverse’ stress test to determine
what level of disruption would need to be
experienced before a breach of the Group’s interest
cover funding covenant was unavoidable.
The downside scenarios applied to the strategic
plan are summarised in the table below. The
reverse stress test shows that a breach of the
interest cover covenant would occur on denial of
service without any income for a period of four
months, and it assumes that the Group’s existing
surplus cash at 31 December 2025 of £274.0m is
invested in acquisitive growth but the Group would
still have adequate liquidity.
Whilst we believe the reverse stress test is highly
unlikely, the Group would be able to take a number
of further mitigating actions including
management of working capital, capital
expenditure and dividends.
In making their assessment, the Directors have
taken account of: (i) the Group’s net debt (including
lease liabilities) of £123.4m at the end of 2025 (net
cash position of £274.0m excluding lease
liabilities); (ii) the Group’s strong financial position;
(iii) headroom and duration of loan facilities
currently in place; (iv) key potential mitigating
actions of reducing the Group’s cost base, capital
expenditure and dividend payments; and (v) the
Group’s ability to generate positive cash inflows in
a scenario of falling revenue as working capital
invested in the business is reduced. These
mitigating actions were tested during the downturn
in the Group’s businesses from 2008 to 2012
which highlighted the resilience of its business
model to a very severe and protracted economic
downturn by historic standards.
Severe but plausible downside scenario
Scenario Severe downturn in market conditions.
Temporary suspension of trading.
Link to principal risks • Macro-economic conditions
• Organic growth
• Competition
• Cyber security and data protection
• Pandemic risk*
Level of severity tested Significant reduction in revenue and gross margin reduced
for up to three years offset by cost reductions in each year.
Conclusion • Net cash position before lease liabilities falls but remains strong.
• The Group remains within its banking covenants.
Reverse stress test scenario
Scenario Temporary suspension of trading for four months.
Assumed that Group’s surplus cash at 31 December 2025 of £274.0m is
invested into acquisitive growth.
Link to principal risks • Cyber security and data protection
• Pandemic risk*
Level of severity tested Inability to trade for four months during 2027 across all regions
without any mitigating income.
Conclusion • Operating loss in 2027, with a cash outflow.
• Group would require a waiver from lenders for the interest cover covenant
in 2027 but would be within all covenants in 2028 and 2029.
* Whilst pandemic risk is no longer a principal risk on the corporate risk register having been removed to the watch list during 2023, in light of
experience in 2020 and 2021 it is still considered a plausible but unlikely scenario by the Group for the purposes of the viability assessment.
39
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Risk management continued
Task Force on Climate-related Financial Disclosures
Grafton discloses against the Task Force on Climate-related Financial Disclosures (TCFD) framework. Where appropriate to avoid
duplication, this disclosure links to information contained in other sections of the report.
Additional TCFD related content is indicated throughout the report with 
TCFD
Grafton disclosure against the TCFD recommendation
In line with the Listing Rule UKLR 6.6.6 R the table below references where in the 2025 Annual Report we have made the disclosures recommended by the TCFD framework. We have also considered the TCFD
supplementary guidance for the materials and buildings sector and the relevance of that to Grafton Group businesses:
Recommendations Recommended disclosures Disclosure location
Governance
Disclose the organisation’s governance around climate-related risks and
opportunities.
a) Describe the Board’s oversight of climate-related risks and opportunities. Pages 67 and 68
b) Describe management’s role in assessing and managing climate-related risks and
opportunities.
Pages 67 and 68
Strategy
Disclose the actual and potential impacts of climate-related risks and
opportunities on the organisation’s businesses, strategy and financial
planning where such information is material.
a) Describe the climate-related risks and opportunities the organisation has identified over
the short, medium, and long term.
Pages 41, 42 and 50
b) Describe the impact of climate-related risks and opportunities on the organisation’s
businesses, strategy and financial planning.
Page 42
c) Describe the resilience of the organisation’s strategy, taking into consideration different
climate-related scenarios, including a 2°C or lower scenario.
Page 42
Risk management
Disclose how the organisation identifies, assesses and manages climate-
related risks.
a) Describe the organisation’s processes for identifying and assessing climate-related
risks.
Page 41
b) Describe the organisation’s processes for managing climate-related risks. Pages 41 and 51 to 53
c) Describe how processes for identifying, assessing, and managing climate-related risks
are integrated into the organisation’s overall risk management.
Pages 31, 32, 38 and 41
Metrics and targets
Disclose the metrics and targets used to assess and manage relevant
climate-related risks and opportunities where such information is material.
a) Disclose the metrics used by the organisation to assess climate-related risks and
opportunities in line with its strategy and risk management process.
Pages 51 to 54
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG)
emissions, and the related risks.
Page 54
c) Describe the targets used by the organisation to manage climate-related risks and
opportunities and performance against targets.
Pages 51 to 54
40
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Annual Report and Accounts 2025
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Strategic Report
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Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Risk management – Task Force on Climate-related Financial Disclosures continued
Risk management
Grafton has been formally managing its climate
risks and opportunities since 2014, initially with a
focus on implementing reductions across Scope 1
and Scope 2 GHG emissions. Since 2020,
sustainability and climate have been captured as a
high-rated risk in our CRR with assessments of
climate-related risks and opportunities being
conducted at both Group and business unit level.
The Group maintains a specific Sustainability and
Climate Change Risk Register, which is reviewed and
updated annually. For this we assess the recurring or
one-off impact of climate-related risks using both
financial measures, including revenue, profit and
cash, and non-financial, including management
effort, regulatory compliance and impact on
stakeholders. We have set numerical thresholds for
each of these metrics to define ‘significance’.
We would typically assess the likelihood of
business risk materialising in the next three years
whereas we monitor the likelihood of risks relating
to climate change risks over the short (1-3 years),
medium (3-10 years) and long term (over 10 years).
Our assessment of climate risks and opportunities
considers a range of scenarios which were
identified based on the guidance published by
TCFD and the International Panel on Climate
Change:
• Rapid decarbonisation – Government-led move
to a low-carbon economy in the next 10 years
with global temperature rises limited to at or
below 1.5°C (RCP 1.9 – 2.6)
• Moderate decarbonisation – Business-led/
government supported transition to a lower-carbon
economy over the next 5-15 years. Global temperature
rises limited to around 2°C (RCP 3.4 – 4.5)
• Limited climate action – Little or no concerted effort
to reduce carbon emissions resulting in global
temperature rises in excess of 4°C (RCP 6 – 8.5)
The scenarios stated above are used to consider a
range of possible outcomes for different climate
risks and opportunities at Grafton over the short,
medium and long term.
These time horizons have been set taking into
account the Group’s typical planning approach
(annual budget and five-year plan), useful life of
inventories (all inventory over two years old and a
high proportion aged between one and two years,
is fully provided for) and assets (majority of
properties are on a short leasehold i.e. < 15 years).
Based on these scenarios, the risks and
opportunities to the Group as recorded in the Group
Sustainability and Climate Change Risk Register are
set out in the table below, with their assessed
significance to the Group, the climate scenario under
which their impact is greatest and the timeframe over
which we expect the risk/opportunity to materialise.
The risks and opportunities apply across Grafton’s
geographies and sectors.
Risk type TCFD category Risk description and impact Significance, scenario &timeframe Mitigating actions, metrics & targets Opportunities
Transitional
Policy Increasing costs of complying with climate
change reporting and taxation regulations.
Major
<1.5°C
Short – medium term
• Measuring impacts of taxation (e.g. CBAM).
• Monitoring of potential regulation changes and estimating
impacts.
Additional transition costs to meet net-zero
commitments.
Major
>4°C
Long term
• Transition plan established with a net-zero target for 2050
(see pages 52 and 53).
• Progress against the transition plan is tracked on a
quarterlybasis.
Commercial advantage from lowering
emissions and investment in
renewable energy.
Reputation Failure to deliver on net-zero targets and
sustainability commitments negatively
impacts the Group’s reputation with investors
and other stakeholders.
Moderate
>4°C
Short – medium term
• Engaging with investor and stakeholders on our emission
reduction programme.
• Progress against the transition plan and sustainability metrics
reported annually.
Positive sustainability positioning and
success help attract investment and
other commercial opportunities.
Market Consumer preferences shift towards circular
business models and more sustainable
choices forbuilding materials.
Moderate
<1.5°C
Medium – long term
• Businesses are investigating and trialling different circular
economy models.
• Engagement with suppliers and monitoring customer trends.
Attract new customers and more
revenue by offering more sustainable
solutions (including circular economy).
Technology Decarbonisation technologies and new
building techniques reduces demand for our
current productportfolio.
Moderate
<1.5°C
Medium – long term
• Businesses monitor customer trends and adjust product and
service offerings to meet them.
New concepts and business
opportunities provide more diverse
revenue generating opportunities.
Physical
Business
interruption and
asset damage
(acute/chronic)
Increased costs and lost revenue due to
disruption to operations and damage to
property and stock as a result of flooding or
other adverse weather events.
Major
>4°C
Short – long term
• Identification of physical threats and at-risk properties.
• Mitigation action taken at all properties assessed as High
orVery High risk.
Supply chain
interruption
(acute/chronic)
Higher costs due to reduced product supply
and reduced revenue generation as a result of
weather events impacting availability.
Moderate
>4°C
Medium – long term
• Businesses monitor supply chain disruptions and have
developed contingency plans for higher risk suppliers.
Competitive advantage through
resilience planning.
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Supplementary Information
Risk management – Task Force on Climate-related Financial Disclosures continued
Resilience
The Group has some inherent resilience to the
impact of climate change given its geographical
and market spread but has taken steps to improve
its resilience and understanding of its exposure to
specific physical and transitional climate change
risks:
1. Physical climate change risks
During 2022 an exercise was conducted, with the
support of consultants from Marsh, to model the
climate change impact on properties across UK,
Ireland, Netherlands and Finland geographies. The
climate model used current asset location data
overlaid by historical and future climate data, under
two scenarios:
• Representative Concentration Pathway (RCP) 2.6
(i.e. consistent with a rapid decarbonisation
scenario); and
• RCP 8.5 (consistent with a limited climate action
scenario).
The exercise identified 44 sites that are currently at
a high or very high risk of flooding which increased
to 48 sites under RCP 2.6 scenario in 2050, and 63
sites under an RCP 8.5 scenario in 2100. This
analysis allowed businesses to focus flood
mitigation actions on those at-risk properties
including establishing flood emergency response
plans and making building alterations to minimise
flood damage and protect stock, as well as existing
drainage maintenance schemes. Mitigation work
at the properties assessed as either high or very
high risk of flooding, was completed in 2024.
Since completing this exercise, the Group has
continued to monitor its portfolio of properties for
any that may become at risk of flooding and take
appropriate mitigating action. This includes new
properties which come into the Group as part of
acquisitions, such as Salvador Escoda in Spain
and HSS Hire Ireland, with any history or threat of
weather-related physical impacts assessed as part
of the due diligence process.
During 2025 the Group experienced a weather-
related flood at one of its trading sites. The
incident did not result in significant damage or
repair costs, and there were no lost trading days as
a result of the flooding.
2. Transitional risk – impact of carbon taxation
based on Carbon Border Adjustment
Mechanism (CBAM) reporting
Using the data reported by EU-based businesses in
2025 for the purposes of the CBAM, we conducted
an exercise to estimate the annual CBAM cost to
the Group, predominantly iron, steel and
aluminium. Whilst the CBAM taxation model had
not been confirmed at the time of calculation, we
used insights from the EU Emissions Trading
System to estimate benchmark data. Overall, we
calculated this would have a moderate impact on
Group import costs and as CBAM becomes
established these costs will become embedded
into purchasing decisions and product costs.
3. Transitional risk – costs of carbon
neutralisation to achieve net-zero
Based on our Scope 1, 2 and 3 emissions for our
base year and net-zero target for 2050, validated by
the Science Based Targets initiative, which is
supported by the Group’s transition plan (see
pages 52 and 53) we have estimated the potential
cost to neutralise our residual annual emissions in
2050. This has used projections for carbon credits
costs in 2050 from the BloombergNEF Long-Term
Carbon Credit Supply Outlook 2025 under three
scenarios with costs ranging from 69 USD per
tonne to 104 USD per tonne. Based on these
calculations the risk could be severe which
reiterates the importance of effective transition
planning.
The Group will continue to assess and estimate the
impact of climate change risks to the business as
more data becomes available.
Impact on strategy and financial
planning
Climate change impacts on the Group’s strategic
planning in several ways. The Group’s
sustainability strategy has focused the business
on taking steps to reduce GHG emissions whilst
also growing activity. This has involved projects to
improve the energy efficiency of buildings
including LED lighting and solar panel installations,
and efforts to reduce vehicle emissions including
switching company cars to hybrid and electric
vehicles and use of alternative-fuelled commercial
vehicles (e.g., compressed natural gas,
hydrogenated vegetable oil).
The Group’s sustainability strategy has been
established recognising increasing investor
interest and scrutiny in how companies are
tackling climate change. We engaged with
shareholders and lenders as part of our ongoing
double materiality assessment for the Corporate
Sustainability Reporting Directive requirements.
Both stakeholder groups were clear that climate
change was an important priority for them.
Sustainability and climate change forms part of
the evaluation criteria for business investment, this
includes evaluating climate change threats to the
locations of any proposed acquisitions, which
include consideration of lease terms and
assessing the impact of capital expenditure on the
Group’s sustainability strategy prior to approval.
Climate-related issues and potential impacts on
business performance and assets are considered
as part of the Group’s one and five-year planning
and performance reviews. GHG targets are
embedded in our banking targets and in the
long-term incentive targets for senior leaders.
GHG reduction is a key consideration in the capital
expenditure process. In developing our proposed
targets and transition plan we have started to
model the associated financial impacts and
potential investment required.
Research and development take place within the
supply chain to our distribution businesses, and
our commercial teams work with suppliers to
identify new product opportunities. In our mortar
manufacturing business, the team are
investigating improvements that could be made to
reduce energy usage in the manufacturing
process.
The Group is also conscious of the impact of
climate change on the products and services it
offers. Businesses maintain dialogue with
suppliers and customers to ensure their product
offerings follow technical developments and
changes in market demand.
A significant portion of Salvador Escoda revenue is
from sales of air conditioning units which help
businesses and consumers in coping with the
impacts of climate change. The acquisition of HSS
Hire Ireland during 2025 is one example of the
Group’s commitment to resource reuse and
circular economy business models.
In 2025, our EU-based business units reported
against the CBAM reporting requirements.
Beginning in 2026, the CBAM will impose a carbon
price on high impact goods imported into the EU.
Impact on financial statements
Management have considered the current and
potential impact of climate change on the financial
statements, this includes the assessment for the
three risks set out above. Costs incurred to date
associated with projects to mitigate flood risk,
improve energy efficiency and reduce carbon
emissions have been absorbed within operating
expenses and capital expenditure. There has been
no material impact on the net realisable value of
inventory or the net value of fixed assets in this
year’s financial statements as a result of climate
change. No liabilities requiring provision in the
financial statements, have been identified in
respect of net-zero commitments and transition
planning.
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Financial Statements
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Supplementary Information
Building the foundations
for a more sustainable
future...
Sustainability Statement
2025 highlights
Health and safety
Since 2021 lost time injury frequency rate has reduced by 16.3% and severity rate has
reduced by 38.6%
Greenhouse gas emissions
40.3% reduction in absolute market-based GHG emissions vs 2021 base year
Supply chain due diligence
Launched EcoVadis Programme. 89.5% suppliers by spend undergone initial risk
assessment with 15.9% suppliers by spend already completed EcoVadis Rating*
Waste management
99.2% waste diverted from landfill Δ
Talent
Developed Group-wide performance management process and system
More than 750 colleagues participating in government-funded training schemes
Human rights
Completed a human rights risk assessment and published human rights policy
Product safety and quality
Developed Group Principles on Product Safety and Quality
Circular economy
Acquired HSS Hire Ireland, championing the hire market for tools and equipment
Legislation
Prepared for EU Deforestation Regulation (EUDR), Carbon Border Adjustment Mechanism
(CBAM) and Construction Products Regulation
Community
Over £1.7m donated to charities and good causes and over £1.0m raised by our colleagues
and customers
* Spend excludes Salvador Escoda. These suppliers will be uploaded in phase 2 of the programme in 2026 as their sustainability
onboarding is completed.
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Supplementary Information
CEO and CFO Introduction
Given the legislative backdrop in the European
Union (EU) the Governance Committees including
the Board and Executive Sustainability Committee
have discussed important ESG legislation at
length. The priority areas have been the EUDR and
CBAM given the timescales and resourcing
implications.
Although details and implementation dates for the
legislations are evolving, we are confident that we
have established robust programmes to ensure
effective preparation.
Beyond the legislative landscape the Group has
remained committed and focused on its
sustainability strategy especially health and safety,
climate change, supply chain due diligence and
diversity and inclusion.
Our business leaders continue to embed health
and safety into daily operations and advance our
programme through targeted initiatives in our
priority risk areas, including vehicle movements,
safe deliveries, and the safe storage and handling
of products. We are making progress towards our
net-zero climate change targets. Our EcoVadis
programme has been established and is overseen
by our Governance Committees.
Significant improvements have been made in
integrating sustainability throughout the
organisation. Sustainability is embedded into
finance, procurement, HR and risk governance
groups. The sustainability structures around the
Group have also been strengthened with business
units bringing their expertise, insights and ideas
together through our newly established
Sustainability Forum.
We look forward to the impact that this forum will
have as we continue our commitment and activity
to build a more sustainable future.
Eric Born
Chief Executive Officer
4 March 2026
David Arnold
Chief Financial Officer
4 March 2026
This 2025 Sustainability Statement is structured
using the European Sustainability Reporting
Standards (ESRS) as a guide as we prepare to
comply with the Corporate Sustainability Reporting
Directive (CSRD) as per the legislative timeline.
While we have used the ESRS as a guide, this 2025
statement is not compliant with the CSRD.
Inside this section
44 CEO & CFO introduction
45 General disclosures
46 Sustainability at Grafton
47 Materiality assessment
48 Our value chain
50 Environmental disclosures
51 Climate change
56 Resource use and circular economy
59 Social disclosures
61 Own workforce
65 Workers in the value chain
66 Consumers and end-users
67 Governance
69 Assurance report
In 2025, we built upon the significant progress achieved in
2024. Our ongoing commitment remained focused on material
ESG topics, including health and safety, climate change, supply
chain due diligence and diversity and inclusion.
Navigating a changing
ESG landscape
44
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Supplementary Information
General disclosures Notes Location
Basis for preparation
Report covers the 2025 financial year from 1 January 2025 to 31 December 2025.
The scope of the report includes our operations in the Island of Ireland, Great Britain, Northern
Europe and Iberia.
EY has completed a limited assurance engagement over selected performance data.
The EY assurance statement can be found on
page 69 and 70. Information within the scope of
this assurance is indicated throughout the
report with a ∆
Disclosures in relation to specific circumstances
Any divergence from the scope outlined in the basis for preparation notes above is indicated in
the accounting notes presented next to each section.
The role of the administrative, management and
supervisory bodies
Information is presented in the Governance section. Pages 67, 68 and 75
Information provided to and sustainability matters
addressed by the undertaking’s administrative,
management and supervisory bodies
Information is presented in the Governance section. Pages 67 and 68
Integration of sustainability-related performance
in incentive schemes
Information presented in the Remuneration Committee Report. Pages 87 to 111
Statement on sustainability due diligence
Core elements of our sustainability due diligence process include:
• Double materiality assessment
• Stakeholder engagement
• Risk assessment and management
• Governance on sustainability issues
• Policies, actions, metrics and targets
Pages 47 and 48
Pages 19 and 20
Pages 31 to 42, 50, 59, 60 and 67
Pages 67 and 68
Throughout the Sustainability Statement
Risk management and internal controls over
sustainability reporting
ESG risk management is integrated into the Group risk management process. Pages 31 to 42, 50, 59 and 67
Market position, strategy, business model(s) and
value chain
Information presented in the Strategic Report and the value chain is presented in the
Sustainability Statement.
Pages 3 to 9 and 49
Interests and views of stakeholders
Information presented in the Strategic Report. Pages 19 and 20
Material impacts, risks and opportunities and their
interaction with strategy and business model(s)
Materiality assessment, matrix and impacts, risks and opportunities (IROs) presented in the
Sustainability Statement.
Throughout the Sustainability Statement
Description of the processes to identify and assess
material impacts, risks and opportunities
Materiality assessment and matrix presented in the Sustainability Statement. Pages 47 and 48
Disclosure requirements covered by the
undertaking’s sustainability statements
Disclosures presented throughout the Sustainability Statement.
Actions and resources in relation to material
sustainability matters
Disclosures presented throughout the Sustainability Statement.
Metrics in relation to material sustainability matters
Disclosures presented throughout the Sustainability Statement.
Tracking effectiveness of policies and actions
through targets
Disclosures presented throughout the Sustainability Statement.
Task Force on Climate-Related Financial Disclosures
TCFD-related content is clearly indicated throughout the report
TCFD
.
General disclosures
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Supplementary Information
Our sustainability strategy
is supported by our five
priority areas:
Sustainability at Grafton
Grafton’s sustainability strategy has five
priority areas that address ESG issues that
are important to our business, colleagues
and customers. The table on page 48 shows
how different material impacts link
to the five pillars of the Grafton sustainability
strategy.
While we are not required to comply with the Corporate Sustainability
Reporting Directive (CSRD) for 2025, our reporting is evolving in response
to CSRD requirements to make it easier for stakeholders to navigate and to
make reporting more comparable.
While European Sustainability Reporting Standard (ESRS) disclosures are
referenced, this 2025 statement is not compliant with CSRD requirements.
Our strategy aligns with the eight
UN Sustainable Development Goals that
we can have the biggest impact on:
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We carried out a preliminary double
materiality assessment in 2023 in
partnership with an external consultancy
firm to identify our material impacts as well
as ensuring that our strategy is focusing
on the most important issues.
A double materiality assessment looks at sustainability issues
through two lenses, the impact that a business has on society and
theenvironment as well as the financial impact an issue may have
onthebusiness’s performance.
This methodology aligned with the double materiality guidance
published by the European Financial Reporting Advisory Group (EFRAG)
in August 2023 taking into account the reporting requirements set out in
the European Sustainability Reporting Standards (ESRS).
We carried out extensive stakeholder engagement across customers,
colleagues, suppliers, large shareholders, lenders, internal subject matter
experts and governance committees. Feedback was scored, weighted
and presented in a materiality matrix showing Grafton’s most material
issues. The matrix was discussed and validated by the Board and then
further refined and is presented on page 48.
In 2025 we reviewed and refined the risks and opportunities associated
with our most material impact areas and the refined impacts, risks and
opportunities (IROs) are presented in each section of the report. We
plantoreview our materiality assessment to incorporate business changes
and the updated EFRAG guidance before we report against the CSRD for
the 2027 financial year.
*
* Subject to any further legislative changes.
Steps in double materiality assessment
Draft list of issues developed
Extensive research was conducted on Grafton and its peers. Initial
consultation was held with key colleagues across the Group and
a provisional list of material issues was drafted.
Assess importance of issues to
business, society and environment
Surveys were carried out with customers, colleagues and suppliers.
Interviews were carried out with large shareholders and lenders.
Workshops were held with subject matter experts at Grafton.
Rank impacts
Impacts were assessed using a scale of 1 (very low impact)
to 5 (very high impact) and ranked in order of importance.
Assess financial impact
Level of financial impact on business performance, profitability,
growth and reputation was assessed using the 1 to 5 scale.
Present impact on matrix
Draft matrix was developed and shared with governance committees.
Validate and refine matrix in
governance committees
Following the feedback received, the matrix was refined, issues were
grouped, and the final matrix was presented and approved by the Board.
Impacts, risks and opportunities
reviewed and refined
In 2025 we conducted a review of the impacts, risks and opportunities,
resulting in further refinement. The updates were reviewed and
approved by the Executive Sustainability Committee.
Materiality assessment
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4.5
3.5
2.5
2.5 3.5 4.5
1
Social and environmental impact
(scale 1 – 5)
Financial impact (scale 1 – 5)
5
2
4
3
8
6
7
9
10
11
Our top 11 material impact areas
1
Climate change
2
Equality, equity, diversity & inclusion
3
Product safety & quality
4
Colleague health, safety & wellbeing
5
Responsible sourcing in supply chains
6
Talent & reward
7
Resource use & circular economy
8
Sustainable raw material sourcing
9
Regulatory compliance
10
IT & cyber security
11
Privacy & data security
Materiality matrix
The matrix opposite presents the findings
ofthe double materiality assessment.
Itdisplays Grafton’s top 11 material impact
areas. Impacts were assessed using a
1to5scale. A materiality threshold was
applied, impact areas above 2.5 on both
axes were deemed material and presented
inthe matrix.
Linking material impacts to strategy
ESRS reference ESRS topical issues Strategy link Subtopics Disclosure reference
E1
Climate change Planet Climate change Pages 51 to 55
E5
Resource use &circular economy Customer & product Resource use & circulareconomy Pages 56 to 58
Sustainable raw material sourcing Page 57
S1
Own workforce People Equality, equity, diversity &inclusion Pages 61 and 62
Colleague health, safety&wellbeing Pages 63 and 64
Talent & reward Pages 62 and 63
Privacy & data security Page 68
S2
Workers in the value chain Customer & product and ethics Responsible sourcing in supplychains Page 65
S4
Consumers and end users Customer & product and ethics Health & safety
*
Pages 63 and 64
Product safety & quality Page 66
Privacy & data security Page 68
IT & cyber security Page 68
G1
Business conduct Ethics Regulatory compliance Pages 67 and 68
IT & cyber security Page 68
Privacy & data security Page 68
* Whilst customer health and safety was not specifically called out in the top 11 material impact areas our holistic approach to health and safety covers this important stakeholder group so it has been included as an area of disclosure.
Materiality assessment continued
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Supplementary Information
Upstream
Our value chain
DownstreamOwn operations
Raw materials and sourcing
1
5
7
8
Extraction, production and refinement
ofrawmaterials for products
Third-party manufacturing
3
5
7
9
Third-party manufacturing and
developmentofproducts for sale
Supply chain management
1
3
5
7
8
9
Supply chain due diligence, assessing risks
and acting accordingly. Building long-term
supplier relationships
Manufacturing
1
2
3
4
6
7
9
Running 11 manufacturing
sites for mortar, staircases
and windows in Great Britain
Logistics and distribution
1
2
3
4
6
Outbound logistics, inventory management
and product compliance
Distribution and retail branches
1
2
4
6
9
10
11
Operating 462 distribution and retail sites
as well as online sales operations
Sales and marketing
2
3
4
10
11
Sales viabranches, digital
platformsanddirect delivery
Direct customer operations
3
4
7
10
11
On-site delivery, trade credit support
andtechnical support
End customer operations
1
3
4
7
9
10
11
Products delivered and used in building
industry including aftersalescare and
warranty
Material impacts
1
Climate change
2
Equality, equity, diversity & inclusion
3
Product safety & quality
4
Colleague health, safety & wellbeing
5
Responsible sourcing in supply chain
6
Talent & reward
7
Resource use & circular economy
8
Sustainable raw material sourcing
9
Regulatory compliance
10
IT & cyber security
11
Privacy & data security
Stakeholder groups across our value chain
Customers Colleagues Communities and the environment Shareholders Suppliers
Our key business activities, stakeholder groups and value chain steps are set out in the diagram below. We have highlighted the relationships with our material
impact areas. Our sustainability programme addressed the full value chain from raw material sourcing, to supply chain due diligence, operational emissions and
waste, health and safety and customer engagement.
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Supplementary Information
It’s estimated that buildings account for 40% of
the energy usage across the EU and 36% of GHG emissions,
which mainly stem from construction, usage, renovation
and demolition. GHG emissions from material extraction,
manufacturing of construction products, as well as
construction and renovation of buildings are estimated
to be 5-12% of GHG emissions
TCFD
.
As a result, all players in this sector have a responsibility to take action to reduce emissions and
source materials responsibly and use them efficiently.
The stakeholder engagement carried out with customers, colleagues, investors, lenders and suppliers
for our double materiality analysis showed that climate change and resource use and circular
economy are important impact areas.
Environmental disclosures
Environmental impacts, risks and opportunities
TCFD
The table below summarises Grafton’s environmental IROs
ESRS Topical
issue Sub-topic Impact Value chain Risks & opportunities
Climate
change
Climate
change
mitigation
Scope 1, 2 & 3 GHG
emissions.
   
-
 
Transitional costs – investment in mitigation strategies such as energy efficiency, alternative technologies,
renewable energy and alternative fuels.
+
 
Reduction in carbon emissions due to success of transition plan.
-
 
Financial costs related to carbon taxation.
Resource use
and circular
economy
Resource use
Extraction/harvesting and
useof raw materials for
manufacturing process
including timber and
aggregates.
-
 
Environmental, social, reputational and commercial impacts of unsustainable raw material sourcing.
Raw material
sourcing
Use of raw materials in
products for sale to
customers notably timber.
-
 
Failure to meet regulation related to forest-based commodities, notably timber.
Key: Risk Opportunity
Upstream Own operations Downstream
Environmental
disclosures
E1: Climate change
E5: Resource use and circular
economy
Strategy
linkage
Planet
Customer and product
UN SDG
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Environmental disclosures – E1 Climate change
TCFD
Business activity Policy/approach Metrics/targets
Climate
Change
Environment
Policy
Net-Zero
Science Based
Target
Actions
Own operations
Actions and plans
This year Grafton has remained focused on
implementing initiatives that will reduce our GHG
emissions to ensure progress towards our Science
Based Targets Initiative targets.
Key decarbonisation levers for Scope 1 and Scope
2 are:
Electricity and energy savings
Grafton has increased its acquired renewable
electricity by 4% in 2025 to a total of 92%. Business
units continued to implement a range of
efficiencies including energy management
systems and equipment efficiencies.
This has been alongside our work on electrification
of premises, moving away from fossil-fuel sourced
heating such as natural gas and heating oil.
Grafton continues to install Solar PV arrays across
the estate, with ten new installations and the
expansion of six existing arrays in 2025.
We produced over 2,800,000kWh of renewable
electricity some of which was fed into the local
grid.
We have continued to implement
recommendations from the Energy Savings
Opportunity Scheme which include a range of
energy saving initiatives. Grafton will continue to
implement initiatives before the next phase of the
Scheme.
Vehicle fleet
In 2025, efforts to move to an alternative vehicle
fleet continued with the increased uptake in
BioCNG, Hydrotreated Vegetable Oil (HVO) and
electric vehicles across the fleet.
HVO use in our commercial fleet increased by 22%
compared to 2024, saving more than 2,000 tCO
2
e.
Our UK-based businesses entered into a shared
contract to increase HVO usage most cost-
effectively. The transition to an alternatively fuelled
vehicle fleet will continue as part of our transition
plan, with increased uptake of HVO and move to
electric vehicles where feasible across the fleet.
Value chain
Actions and plans
Data availability and accuracy
With over 99% of Grafton’s emissions being
indirect emissions generated in our value chain,
the support of our suppliers and manufacturers
will be essential to achieve our targets. Grafton
worked to improve its Scope 3 calculation process
in 2025 by improving the accuracy of purchasing
and associated emissions factors as well as a
focus on end of life treatment of products sold and
emissions of products in their use phase. In
conjunction with supplier engagement, Grafton
plans to further improve the accuracy of value
chain emissions. The introduction of CBAM to
some of the markets within which Grafton
operates has improved the accessibility of carbon
data provided by our suppliers.
Supplier engagement
Our work with EcoVadis will provide a route to
engage with suppliers on their environmental
performance including climate change.
We continue to partner with manufacturers to drive
investment in low emission technologies and
products. This is essential to decrease the
emissions from goods we sell to our customers
and the emissions the product may produce over
its lifetime.
Focused examples
Businesses including Selco and Woodie’s have
highlighted the importance of the EcoVadis
programme through their supplier conferences.
Isero maintained top-level CO
2
Performance
Ladder certification in the Netherlands. The
business has renewed this annually since 2017,
reflecting Isero’s commitment to cutting emissions
across its operations and supply chain through
transparent reporting and collaboration.
Salvador Escoda’s air conditioning offer is
important to support customers’ climate change
adaptation programmes. In 2025 Salvador
launched a new training programme focused on
solar energy, energy efficiency, and reducing
carbon emissions. It offers technicians hands-on
sessions, real-world examples and practical
guidance to help professionals improve system
design, performance and sustainable energy use.
Net-Zero Science
Based Targets
The Science Based Targets Initiative (SBTi)
has validated that the science-based
greenhouse gas emissions reductions targets
align to the SBTi Corporate Net-Zero
Standard.
SBTi has classified Grafton’s Scope 1 and 2
target ambition as in line with a 1.5°C
trajectory:
Overall net-zero target: Grafton Group plc
commits to reach net-zero greenhouse gas
emissions across the value chain by 2050.
Near-term targets: Grafton Group plc
commits to reduce absolute Scope 1 and 2
GHG emissions 48.5% by 2030 from a 2021
base year. Grafton Group plc also commits to
reduce absolute Scope 3 GHG from use of
sold products covering sold fossil fuels 42%
within the same timeframe. Grafton Group plc
further commits to reduce all other absolute
Scope 3 GHG emissions 42% within the same
timeframe.
Long-term targets: Grafton Group plc
commits to reduce absolute Scope 1 and 2
GHG emissions 90% by 2050 from a 2021
base year. Grafton Group plc also commits to
reduce absolute Scope 3 GHG emissions 90%
within the same timeframe.
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Financial Statements
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Supplementary Information
Transition plan
TCFD
Grafton’s climate transition
plan follows the principles of
the Transition Plan Taskforce
disclosure framework –
Ambition, Action, Accountability
Ambition
Foundations
Grafton’s targets have been validated by the
SBTiand are aligned with the 1.5°C trajectory
(page 51). Our double materiality assessment
showed that our stakeholders, colleagues,
customers and suppliers regard climate
changeasa priority.
Grafton’s business model and value chain are
presented on pages 9 and 49. As a distributor and
retailer of materials for the building industry there
are important changes that will need to take place
over the coming 25 years.
To drive the changes that are needed, Grafton
willwork extensively with suppliers and customers.
In the shorter term we will focus on improved data
collection, increasing the proportion of suppliers
with Science-Based Targets and encouraging
more suppliers to set targets with support
fromEcoVadis.
In the longer term there will be a focus on
alternative products, materials and energy usage
for products as well as scaling up circular business
models where possible.
Key assumptions and external factors
Financial growth
The targets are based on absolute emissions
reductions therefore organic business growth will
be captured in the emissions reduction trajectory.
However, as a business that acquires and divests,
we have published a recalculation policy to
account for any significant changes in the
business (www.graftonplc.com).
Policy developments
All businesses require policy support to enable
them to deliver such stretching targets. It will be
important that governments continue to drive
renewable electricity, support innovations in
alternative fuels and phase out high impact
products such as natural gas and oil boilers.
Industry innovations and developments
We rely on large industries such as chemicals,
steel and cement to provide the products that
customers such as builders, DIY enthusiasts and
developers need. These large industries have plans
in place to reduce their emissions and have been
subject to legislation, therefore delivering their
ambitions will be an important contributor to
Grafton achieving our targets.
Technological advancements
Longer term, technological advancements will
benecessary in how buildings are constructed
andthe technology used to power them as well
asin the transport industry for heavy goods.
Wewill work with our supplier partners where
possible to trial and promote these technologies,
but much of the innovation will take place within
our supply chain.
Data improvements
As a business Grafton sells hundreds of thousands
of products therefore the calculation of Scope 3
emissions is subject to assumptions. As Grafton
improves the monitoring of its emissions and
suppliers improve the quality of their data, we
willlikely need to recalculate our emissions.
In 2025 our base year recalculation to account for
key acquisitions and divestments was approved in
line with our base year recalculation policy.
Scope 1 & 2 transition plan
Heating and cooling
Initial focus on increased efficiency and long-term transition
to alternative forms of heating.
Commercial vehicles and plant
Phased transition to electric, bio-fuels or other alternative
technology in the long term.
Car fleet
Switch to alternative fuels and support this move with the
installation of charging points.
LPG
Initial focus on increased efficiency in manufacturing
process and long-term working with suppliers to develop
technological/efficiency innovations.
Electricity
Move to 100% certified renewable energy and increase solar
production capacity for new and existing sites. Continue to
improve monitoring of our energy use and increase efficiencies.
2030 Our target
48.5% reduction in
absolute Scope 1&2
GHG emissions
vs 2021
2025 Achieved
40.3% reduction
in absolute
Scope 1&2
GHG emissions
vs 2021
2021 Base year
2050 Our target
90% reduction in
absolute Scope 1&2
GHG emissions
vs 2021
56,000
0
tCO
2
e market based
Environmental disclosures – E1 Climate change continued
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Supplementary Information
5.0m
0
tCO
2
e
2021
Base year
2050 Our target
90% reduction in
absolute Scope
GHG emissions
vs 2021
2030 Our target
42% reduction in
absolute Scope 3
GHG emissions
vs 2021
2024 Achieved
17.6% reduction
in absolute Scope 3
GHG emissions
vs 2021
Action
Implementation strategy
The Executive Sustainability Committee ensures
that GHG emissions targets are embedded in the
business planning and operations of the business.
In 2025, the Committee was engaged on the
actions needed to meet our targets and approved
the recalculation of our base year to account for
acquisitions and divestments.
Our priority areas are displayed in the infographics
on pages 52 and 53. The actions are separated
into Scope 1 and 2, and Scope 3 so that the
relevant teams across each business unit can
takeownership for the delivery. Grafton includes
climate change in the budgeting process to ensure
that financial impacts of decisions are effectively
quantified.
Engagement strategy
Engagement across Grafton’s value chain and
especially with suppliers and customers is an
essential part of achieving the targets. Suppliers
will be required to share detailed data on the
products supplied and be encouraged to set
science-based targets. Collaboration to bring new
products to market will also be key.
Grafton’s supply chain due diligence process will
be extended to capture more detailed information
on GHG emissions.
Grafton collaborates across the industry through
groups such as the Builders Merchants Federation
and Euro-Mat. These forums provide an
opportunity for information and views to be shared
with other building materials distributors, suppliers,
and leading industry figures. As part of our
sustainability strategy, we consult key stakeholders
including customers, suppliers, shareholders and
lenders. This is used to gain feedback on their
priority areas and the actions that they would like
to see Grafton taking.
Training of colleagues
The Group sustainability team communicate
extensively with colleagues on climate change,
targets and reduction strategies. In 2025, training
for commercial colleagues has taken place as
wellas engagement at the Board, Executive
Sustainability Committee and individual business
unit reviews.
Accountability governance
Climate change governance follows the
sustainability governance process set out on
page 67.
Environmental disclosures – E1 Climate change continued
Scope 3 transition plan
Goods for resale
• Increase proportion of products sourced from suppliers
with science-based targets.
• Prioritise reductions in categories that make the biggest
contributions.
• Collate accurate product level emissions data from
Environmental Product Declarations or other Life-Cycle
Analysis.
• Increase circular business offering to decouple sales from
emissions.
Use of sold products
• Offer alternatives to energy intensive products such as
natural gas and oil boilers.
• Improving efficiency of energy using products as well as
reducing emissions associated with use through increased
renewables in the grid.
Other
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Supplementary Information
Greenhouse gas emissions reporting
TCFD
Scope 1 & 2 Unit 2021 base year 2024 2025 Change on 2024
Change on
base year
Scope 1* tCO
2
e 42,380.7 32,427.8 31,453.4 -3.0% -25.8%
Commercial vehicles tCO
2
e 15,312.8 12,202.3 11,821.6 -3.1% -22.8%
Gas heating tCO
2
e 7,205.6 5,160.5 5,149.7 -0.2% -28.5%
Manufacturing (LPG) tCO
2
e 12,982.4 10,648.9 10,579.7 -0.6% -18.5%
Scope 2 – location-based tCO
2
e 14,868.0 10,820.0 10,010.9 -7.5% -32.7%
Scope 2 – market-based* tCO
2
e 13,427.2 2,432.9 1,836.8 -24.5% -86.3%
Electricity tCO
2
e 12,019.1 1,963.4 1,457.2 -25.8% -87.9%
District heating tCO
2
e 1,408.1 469.5 379.6 -19.2% -73.0%
Scope 1 & 2 – location-based tCO
2
e 57,248.6 43,247.9 41,464.4 ∆ -4.1% -27.6%
Scope 1 & 2 – market-based tCO
2
e 55,807.8 34,860.7 33,290.2 ∆ -4.5% -40.3%
Scope 1 & 2 – market-based intensity** tCO
2
e/£m Revenue 22.3 14.4 13.1 -9.3% -41.4%
* Major sub-categories of Scope 1 and 2 data presented in the table. Additional contributions from electric vehicles, forklift trucks and fugitive emissions are incorporated in the totals.
** Intensity is calculated using GHG emissions on a like for like basis to align with revenue data.
Scope 3 Unit 2021 base year 2023 2024 Change on 2023
Change on
base year
Scope 3 tCO
2
e
4,798,277.9 4,051,012.0 3,953,169.1 -2.4% -17.6%
Goods for resale tCO
2
e
1,399,155.4 1,363,987.6 1,083,806.4 -20.5% -22.5%
Use of sold products tCO
2
e
2,786,767.9 2,316,163.3 2,677,118.6 15.6% -3.9%
Other categories tCO
2
e
612,354.7 370,861.1 192,244.1 -48.2% -68.6%
Energy consumption
Unit 2024 2025
% of total energy
consumption
Energy consumption
Mwh 192,164.1 193,209.2 100.0%
Fossil fuels
Mwh 145,286.8 141,408.6 73.2%
Renewable sources
Mwh 46,877.2 51,800.6 26.8%
Fuel
Mwh 7,207.8 8,795.0 4.6%
Self-generated
Mwh 883.4 1,518.0 0.8%
Acquired
Mwh 38,786.1 41,487.6 21.5%
Environmental disclosures – E1 Climate change continued
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Financial Statements
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Supplementary Information
Environmental disclosures – E1 Climate change continued
Accounting principles GHG emissions
We report our emissions as per the methods set out
in the GHG Protocol. Under the GHG Protocol, emissions
are categorised into Scope 1, 2, and 3.
We report our emissions in tCO
2
e and on
emissions from all entities over which we have
operational control. Please see our ‘Scope 1 and
2 GHG Criteria’ and ‘Scope 3 GHG calculation
methodology’ available at graftonplc.com.
Grafton states that recalculations to the base year
may occur given our business model. For more
detail, please see ‘GHG Recalculation Policy’
available at www.graftonplc.com.
Between 2024 and 2025, Grafton completed the
acquisitions of HSS Hire Ireland and Salvador
Escoda and the divestment of MFP. In line with
the GHG Protocol and our operational control
approach, emissions associated with these
changes have been updated in our Scope 1,
Scope 2 and relevant Scope 3 categories from
the date on which operational control was
obtained or relinquished. As the combined impact
of these acquisitions exceeded the materiality
threshold defined in our GHG Recalculation
Policy, we have undertaken a base year
recalculation to ensure comparability of
performance over time. Where full-year energy
and emissions data was not available, we have
applied estimation methodologies consistent
with our GHG Calculation Criteria. Integration of
both entities into Group-wide emissions
management and data systems is ongoing and
will further enhance data quality and consistency
for future reporting periods.
Scope 1 emissions
Direct GHG emissions from operations. This
includes emissions from our vehicle fleet, fugitive
emissions, combustion of fuels for heating and
manufacturing processes.
Scope 2 emissions
Indirect GHG emissions from electricity, heat and
steam, purchased and consumed by Grafton
Group. Location-based emissions are based on
national grid average emission factors for defined
locations. Market-based Scope 2 emissions refer
to indirect GHG emissions associated with
purchased electricity, heat and steam through
procurement of contractual instruments such as
Energy Attribute Certificates and Guarantees of
Origin from sources such as wind, hydro, solar
and biomass. For sites without such contractual
agreements and for other Scope 2 energy types
in the absence of supplier specific emission
factors and/or residual mix emission factors, the
national average emission factor has been
applied.
Total energy consumption from
fossil sources
Primary energy consumption from crude oil
petroleum products, and natural gas, as well as
consumption of externally purchased secondary
non-renewable energy such as electricity, heat,
steam and cooling. Energy consumption is based
on meter readings and/or invoices. Considering
the ESRS requirements, we have widened the
scope of the total energy consumption metric to
include all entities under operational control,
including fuel consumption in leased vehicles.
Total energy consumption from
renewable sources
Wood, biogas and externally purchased electricity
from renewable sources, such as wind, solar,
hydropower, biomass or biogas, as defined in the
contractual agreements. Consumption is based
on meter readings and/or invoices and
complemented with data on renewable energy
certificates for each site.
GHG intensity
Total GHG emissions per million net revenue. For
the purpose of disclosing GHG emissions
intensity (tCO
2
e per £m revenue), Grafton Group
uses a second set of market-based Scope 2
emission factors to ensure alignment between
the emissions data and the financial information
presented in each year’s Annual Report and
Accounts (ARA). While the Group’s GHG
Recalculation Policy requires restatement of
historical emissions when structural changes
occur—such as acquisitions or divestments—our
financial reporting does not retrospectively
restate prior-year turnover for such changes and
only reports comparative figures for the previous
two years.
To ensure consistency between the numerator
(GHG emissions) and denominator (net revenue)
in each reported intensity metric, the carbon
values used for intensity calculations are aligned
to the financial reporting boundaries and turnover
figures published in the ARA for that specific
reporting year.
This approach ensures that GHG intensity values
remain comparable with the financial information
reported to shareholders and are consistent with
the methodology applied by the Group Finance
function. It also ensures that intensity ratios
accurately reflect operational performance in the
period to which the financial statements relate.
Scope 3 emissions
We report our Scope 3 emissions using the
following Scope 3 accounting principles:
• Relevance – Our Scope 3 inventory contains
Goods for Resale, Goods Not for Resale, Use
ofSold Products, Capital Goods, Operational
Waste, Fuel and Energy Related Activities,
Upstream Transport and Distribution,
Downstream Transport and Distribution,
Processing of Sold Goods, Business Travel,
Employee Commuting, Downstream Leased
Assets, End of Life Treatment.
• Completeness – Our Scope 3 inventory reflects
our GHG emissions appropriately. Upstream
Leased Assets, Franchises and Investments are
not relevant for Grafton and are therefore
excluded from the inventory.
• Consistency – We have calculated our Scope 3
emissions for 2021, 2022, 2023 and 2024
withconsistent methodologies and reporting
boundaries. This lends us to performing trend
analysis and monitoring emission reduction
progress over time.
• Transparency – Our Scope 3 methodology
andassumptions can be found at
www.graftonplc.com.
• Accuracy – During the calculation process,
source data undergoes quality checks and
calculations are reviewed by a third-party
consultancy firm to ensure credibility in the
endemission analyses.
• The latest data for Scope 3 is 2024 due to the
complexity of the calculation.
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Supplementary Information
Environmental disclosures – E5 Resource use and circular economy
Careful resource management is central to our
sustainability programme. Our focus areas include
operational waste management, packaging, raw
material sourcing and circular business models.
Operational waste
Grafton works with waste management
companies to monitor waste, manage it
responsibly and look for opportunities to reduce it.
In partnership with our waste management
companies, teams work to divert the waste in our
own operations from landfill and in 2025 achieved
a 99.2% diversion rate ∆. In addition, 58.8% of our
operational waste was recycled.
We continue to look for opportunities to replace
plastic wrap used to distribute products with
recycled alternatives as well as trying to reduce the
amount used where possible by using collapsible
boxes, moving to cages or strapping products
together. However, all alternatives need to be
carefully assessed with our colleagues’ safety in
mind as many of our products are heavy and
safety is of the utmost importance.
Accounting principles
Operational waste includes all waste
generated in our operations. The data is
collated via third-party reports from waste
providers detailing disposal methods of
wastestreams.
Operational waste data
Total recycling rate
2024*
2023
2022
2021
2025
61.0%
5 6 .1%
59.5%
53.6%
58.8%
Total recovery rate
2024*
2023
2022
2021
2025
38.2%
42.5%
3 7. 2 %
39.0%
40.4%
Waste diversion from landfill
2024*
2023
2022
2021
2025
99.2%
98. 6%
96.6%
92.6%
99.2%∆
Total waste (tonnes per £m revenue)
2024*
2023
2022
2021
2025
6.1
6.0
6.6
7. 3
5.6
Packaging data
All businesses report packaging data as required
by legislation in their country of operation. The
biggest change to this system has been taking
place in the UK, where business units have
continued to report against the existing packaging
scheme and plastics tax regulations as well as the
new extended producer responsibility system.
Business units have been working closely with
suppliers to collect the data required on packaging.
Businesses based in the EU are also preparing for
the Packaging and Packaging Waste Regulation
which introduces rules and standards related to
the packaging put on the market.
Business activity Policy/approach Metrics/targets
Operational waste Environment Policy • Tonnes operational waste
• Operational waste diverted from landfill
• Operational waste recycled
Packaging Approach specific to
operational market
• Report packaging data as per regulations
Raw material
sourcing: timber
Deforestation Policy • Timber certified through internationally
recognised schemes
• Due diligence processes in place in all relevant
business units
Manufacturing:
rawmaterial use
Deforestation Policy
Supplier engagement
• Timber certified through internationally
recognised schemes
• Restoration plans in place for aggregate sites
Circular business
models
Approach specific to each
business unit
• Pilot circular business opportunities by 2025
• Promote products to customers with
sustainability attributes by 2030
* Restated to include data for Salvador Escoda which was
acquired in Q4 2024.
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Financial Statements
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Supplementary Information
Environmental disclosures – E5 Resource use and circular economy continued
The Group Deforestation Policy outlines the legal
requirements, responsible sourcing and due
diligence guidelines related to purchasing of forest
based commodities, timber in particular. This
policy is available at www.graftonplc.com.
In 2025 the focus has been on preparing for the EU
Deforestation regulation. Identifying products in
scope, reaching out to suppliers, planning the IT
systems needed to monitor data and establishing
the formal due diligence processes required to
meet the requirements.
Business units across the Group have been
sharing knowledge and best practice and
significant work has taken place to monitor the
changing requirements of the legislation.
Business units have also continued to promote the
certification of the products sold through
internationally recognised certification schemes.
Percentage of Selco timber certified to
internationally recognised standards in 2025
99.0%
Percentage of StairBox timber certified to
internationally recognised standards in 2025
99.6%
Across the Group we have achieved 90.9% of
timber certified either with full chain of custody or
supplier declared. This is less than our 100%
target, but the priority for 2025 has been preparing
for the deforestation regulation. We have plans in
place to increase this percentage further in 2026.
Raw materials for manufacturing
Our manufacturing businesses produce ready mix and bagged mortar products, bespoke staircases and windows. The manufacturing process is different,
butthe processes have been developed to minimise wastage, source raw materials responsibly and produce quality products that are made to last.
Raw material sourcing
Gaining greater traceability of priority raw materials is an
important focus. Timber is a key raw material for a number
of the distributors within the Group and for StairBox.
Mortar manufacture
CPI EuroMix operates ten manufacturing sites across Great Britain
sourcing cement, sand and additives from trusted suppliers to produce
the product and their manufacturing processes follow the following
standards:
• ISO 9001: Quality Management System
• ISO 14001: Environmental Management System
• BES 6001: The Framework Standard for Responsible Sourcing.
Attaining these certificates demonstrate CPI EuroMix’s commitment to
providing high-quality products using raw materials that are sourced
responsibly and following a manufacturing process designed to minimise
impact on the environment. CPI EuroMix received an ‘Excellent’
performance rating for their BES 6001 certification and use this
framework when considering new suppliers. CPI EuroMix has been
certified against ISO 9001 and ISO 14001 since 2016, and through
regular auditing across all locations and regularly reviewing internal
management systems maintain high-quality product manufactured
responsibly. CPI EuroMix has also worked with their cement suppliers
over time to ensure that GHG emissions associated with this raw material
are reduced and the sand suppliers have strong restoration plans in place
for all extraction sites.
Wooden staircase and window manufacture
StairBox uses state-of-the art technology to design and manufacture
made-to-measure products. This ensures that minimal waste is
generated in the installation of the product. Their sales teams have
extensive training to support customers to design the products to the
correct specifications.
StairBox operates a series of quality inspections throughout the
manufacturing process, prior to a final full quality sign-off prior to loading
and delivery. They have a chain of custody timber sourcing process to
ensure that the timber used is responsibly sourced. 99.6 % of StairBox
timber is certified by internationally recognised timber certification
schemes. The certification process provides confidence that timber
sourcing is not contributing to illegal deforestation, that strong labour
standards are met.
The chain of custody audit ensures full traceability of all materials from
initial source to end user as well as checking policies and procedures.
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Supplementary Information
Environmental disclosures – E5 Resource use and circular economy continued
Circular business models
Our business units are investigating and trialling different
circular business models. They fall into a number of categories.
TCFD
Additional environmental disclosures
Water management
Water is not a material issue within Grafton’s
operations as the branches and manufacturing
facilities are not large users of water. However,
Grafton is monitoring its water usage to ensure
that this resource is used as efficiently as
possible.
Biodiversity
There are various initiatives in place across the
Group that are designed to address biodiversity
as well as other environmental issues. Branches
work to support and promote biodiversity at a
local level. Chadwicks for example is a member
of the All-Ireland Pollinator Plan implemented by
the National Biodiversity Data Centre. As part of
this membership, biodiversity projects are
introduced to stores during refurbishments.
The Group’s timber sourcing programme
promotes responsibly sourced timber including
internationally recognised certification which are
tackling deforestation. We have a commitment
to work with our aggregate suppliers to ensure
that all extraction sites have restoration plans in
place. CPI EuroMix has engaged with all of its
quarries on this topic.
In 2026 we intend to introduce cleaning
materials and other products used in our
operations that are 100% bio-degradable.
Pollution
Grafton’s manufacturing businesses have
policies and procedures in place to monitor,
manage and minimise emissions associated
with the manufacturing process. CPI EuroMix
has ‘baghouse’ technology on all sites which
collects dust, and removes particulate matter
and harmful gases from the manufacturing
process. StairBox uses a bag filter to collect and
store dust in a silo which is regularly maintained.
There are alarms installed to alert the teams in
the case of a breach of the limits as well as a
response plan in place. For the distribution
businesses, air quality management associated
with the fleet is important. Selco has invested in
CNG fuelled vehicles in metropolitan areas as
they emit lower amounts of particulate matter
than standard diesel fuelled vehicles.
Grafton EcoVadis rating
For the second year Grafton Group achieved
Silver for our EcoVadis ESG ratings assessment
which is in the top 15% of responders.
1. Products as a service
In May 2025 Grafton completed the acquisition of
HSS Hire Ireland. This is a tool and equipment hire
specialist operating from four branches and four
customer distribution centres in the Republic of
Ireland. HSS Hire Ireland offers an extensive range
of conventional hire products as well as specialist
equipment.
This acquisition builds on our existing rental
business models which include Sam Hire in the
Republic of Ireland, TG Lynes plant rental service
and Selco’s partnership with HSS Hire in Great
Britain.
2. Sale of spare parts
Spare parts and rental offerings have been central
to the IKH business model for over 20 years. Spare
parts are offered for tools, large machinery and
tractor models. Maintenance and repairs of rental
products are performed in-house, maximising the
life of each product.
3. Take-back schemes
All of Selco’s branches now have a pallet collecting
scheme. Pallets from 32 branches along with
cardboard and soft plastics are taken to a central
distribution centre to be repaired or reused by a
third party. For the remainder of the estate, Selco
uses another partner organisation that collects,
repairs and reuses the pallets. This process
ensures that all plastic wrap is recycled rather than
sent to landfill. Our Netherlands businesses, Isero
and Polvo, have a strong focus on battery recycling
and tool repairs. Both businesses have collection
points in every branch for customers to take used
batteries, which are collected by a third-party and
recycled. Polvo offer a service whereby customers
can take tools to their local branch to be repaired
instead of being taken to landfill.
4. Repair & maintenance
Isero is innovating in the refurbishment space by
working with one of their value chain partners on a
sanitary ware refurbishment scheme collecting,
refurbishing and reselling certain products and
working to calculate the associated GHG
emissions savings.
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Financial Statements
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Financial Statements
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Supplementary Information
As a European multinational distributor of construction
related products and solutions, we interact with people
through our value chain:
our colleagues, our suppliers and
our customers.
Our colleagues are integral to our success as a business and we are committed to fostering an
environment where everyone can thrive. Our people initiatives prioritise safety, wellbeing (including
mental wellbeing), inclusivity, and professional development and are supported by comprehensive
policies.
Supply chain risk management is a priority for the Group, and we understand the importance of
effective management of the social impacts in our supply chain.
Engaging effectively with our customers is essential for the success of our business. We listen to their
ideas, concerns and respond to provide the best service we can.
Social disclosures
Social
disclosures
S1: Own workforce
S2: Workers in the value chain
S4: Consumers and end users
Strategy
linkage
People
Customer and product
Ethics
UN SDG
Social impacts, risks and opportunities
The table below summarises Grafton’s social IROs
ESRS topical
issue Sub-topic Impact Value chain Risk/opportunity
Own
workforce
Equality,
equity,
diversity and
inclusion
A diverse and inclusive
culture with strong colleague
engagement results in
colleague attraction and
retention.
-
 
Lack of diversity and inclusion within the workforce, including at senior levels, and a failure to provide equality and
equity in the treatment of colleagues with respect to protected characteristics and mental wellbeing, can adversely
affect retention and recruitment and may also result in non-compliance with relevant legislation.
+
 
A diverse and inclusive culture, combined with strong colleague engagement and programmes that support overall
wellbeing, including mental wellbeing, will attract potential colleagues and help motivate existing ones.
Talent
Attracting talent and
developing our existing
colleagues to drive their
careers and deliver business
performance.
-
 
Inadequate recruitment practices and ineffective training, development, engagement, pay and reward programmes,
may result in retention challenges and negatively affect the Group’s ability to attract, recruit and retain talent.
+
 
Clear career pathways, compelling employer brands in our businesses, and robust succession planning across the
Group are critical drivers of talent attraction, retention, and sustained business growth.
Reward
Pay, benefit and reward
packages for colleagues.
-
  Lack of competitive pay, comprehensive benefits and fair reward packages, including paying below competitors and
offering unequal compensation, can hinder the ability to attract and retain talent and may negatively affect
colleagues’ mental wellbeing and performance.
+
 
Offering competitive pay, benefit and reward packages and being transparent on gender pay will result in attraction
and retention of top talent and a diverse workforce.
Workers in the
value chain
Responsible
sourcing in
supply chains
The working conditions of
people through the supply
chain and adhering to all
associated regulations.
-
 
Working with trading partners whose activities result in negative environmental or social impacts. Failure to have in
place a strong due diligence process that meets regulations and protects the environment and people through the
supply chain.
Key: Risk Opportunity
Upstream Own operations Downstream
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115-190
Financial Statements
191-198
Supplementary Information
ESRS topical
issue Sub-topic Impact Value chain Risk/opportunity
Consumers
and end users
Product safety
and quality
The quality and safety
standards of the products we
sell impacts our customers
and end users and the
commercial success of our
business.
-
 
Inadequate product safety standards and quality assurance processes could result in the sale of unsafe or poor
quality products which may impact reputation, put customers at risk and lead to lost sales.
Own
workforce and
consumers
and end users
Data privacy
and data
security
Loss of colleague and
customer data impacts trust
and commercial success.
-
 
Poor security and privacy controls over customer and colleague data may lead to data breaches which negatively
impact customer and colleague trust and result in colleague retention issues and loss of customers. Failure to
comply with data protection regulation.
Health, safety
and wellbeing
Potential accident and injury
of colleagues going about
their work and customers
using our facilities.
-
 
Risk of personal injury or loss of life of colleagues, suppliers, customers or members of the public during branch
operations (including delivery) due to unsafe working practices. Failure to comply with health and safety regulation.
-
 
Insufficient attention to colleague safety and wellbeing, including mental health, may lead to underperformance or
retention issues, and an increased risk of regulatory non-compliance.
Social disclosures – Social impacts risks and opportunities continued
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Social disclosures – S1 Own workforce
The Group Chief Human Resources Officer, along with HR leaders in each business unit, ensure the effective
delivery and promotion of colleague initiatives across each of our businesses. TheGroup-wide HR Forum
serves as a platform to collaborate and share best practice, and monitors key metrics to ensure continuous
improvement. Unless otherwise stated, our disclosures are applicable to all colleagues across the Group.
Certain initiatives and programmes are tailored to meet the requirements of each local operational market.
Business activity Policy/approach Metrics/targets
Equality, equity,
diversity and
inclusion
• Group Equality, Equity,
Diversity and Inclusion
Policy
• Human Rights Policy
• SpeakUp Policy
• Alignment with FTSE Women Leaders Review
on gender diversity and the Parker Review on
ethnic diversity
• Percentage increase in the number of females
in a defined senior management group
• Year-on-year increase in the number of females
across all levels in our businesses
• Engagement surveys at least every two years
• Monitoring equal pay and a robust grading
structure
Talent • Group-wide performance
management process and
system with talent
management capability
selected
• Talent metrics in development
• Average hours of training per colleague
annually which is measured at business unit
level
Reward • Reward incentives across
the Group and in business
units are designed to drive
high performance
• Variable pay rewards
outstanding achievement
and commitment
• Compliance with EU pay transparency
legislation
• All colleagues receive at least 1% above the
local national minimum wage
Colleague health,
safety and wellbeing
• Health and Safety Policy,
Risk Assessments and
Safe Systems of Work
• Wellness at Work Policy
• Lost time injury frequency rate
• Lost time injury severity rate
Equality, equity, diversity and inclusion
We strive to create a workplace where everyone feels valued, respected, and empowered to contribute.
The Board receives regular updates on the progress of our equality and diversity initiatives. Our Group-
wide Equality, Equity, Diversity and Inclusion Policy ensures a consistent approach across the entire
business. Diversity and inclusion working groups assist our businesses to foster an inclusive culture.
Ourobjective is to maintain a workforce that represents the communities in which we operate.
All our colleagues are expected to support diversity, promote fair and respectful treatment of everyone,
challenge unacceptable behaviours and must comply fully with all legislation relating to equality and
diversity in their location.
Fair recruitment processes
We have objective and robust processes
forrecruitment and selection in each
ofourbusinesses.
Preventing workplace harassment
Each of our businesses has a Dignity at Work
Policy to help colleagues identify potential bullying
and harassment and to provide them with
resources to address these issues should they
arise. In our UK businesses, we have implemented
measures to ensure all stakeholders are informed
of our policy of zero tolerance on third-party
harassment. Many of our businesses have specific
women’s groups and inclusion networks to ensure
that the views of all colleagues are captured and
todrive our diversity agenda.
Our businesses support and leverage the
expertiseof a wide range of organisations
focusedon increasing equality, diversity and
inclusion. Grafton is a signatory to The Social
Mobility Pledge, and is also a member of the
Valuable 500. CPI EuroMix is a platinum member
of Women into Construction which promotes
gender equality in construction.
Promoting diversity in leadership
We were very pleased to increase the number of
women in senior management from 32% in 2024
to 38% in 2025. This progress reflects our
commitment to fostering an inclusive workplace
that values diverse perspectives and promotes
equal opportunities for all colleagues. We have
implemented recruitment strategies to attract
adiverse pool of candidates. Additionally,
ourbenefits programmes have been expanded
tosupport work-life balance and overall wellbeing
in line with our Wellness at Work Policy.
Ourinclusion networks and colleague forums
offeropportunities for colleagues to actively
contribute to our diversity initiatives.
Promoting the inclusion of colleagues
with disabilities
We are committed to fostering an inclusive
andsafe workplace and promoting psychological
safety. We make necessary adjustments to our
physical environment to support colleagues
withdisabilities, ensuring that all colleagues
canwork ina secure and accessible setting.
Weare committed to ongoing improvement in
thisarea, ensuring that our workplace complies
with health and safety regulations and promotes
inclusivity and accessibility and overall wellbeing.
Initiatives include:
• Accessibility improvements: Upgrading
ourfacilities to include automatic doors, and
accessible restrooms, ensuring ease of access
for colleagues with mobility challenges.
• Ergonomic workstations: Customising
workstations to meet the specific needs
ofcolleagues with disabilities, promoting
comfortand reducing the risk of injury.
• Assistive technology: Investing in technologies,
on our external websites to support users with
visual impairments.
Monitoring equal pay
Monitoring pay rates among colleagues is an
important step to ensure that everyone is fairly
rewarded for their work and contribution to our
business. We continuously review ways to address
any differences in pay and work hard to support
career development and progression for all
colleagues. Our businesses in the UK and Ireland
that are in scope for gender pay reporting under
local legislation publish their gender pay reports on
their websites. In Spain and Finland to comply with
local legislation, we submit equity data and plans.
The Group also reports gender diversity data under
the FTSE Women Leaders Review and ethnic
diversity data under the Parker Review. We were
pleased to have improved our ranking amongst the
FTSE 250 from 90 in 2024 to 57 in the 2025 FTSE
Women Leaders Review.
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Financial Statements
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Supplementary Information
Colleague engagement
The success of our business is closely aligned
withour corporate culture and the contribution
andcommitment of each of our colleagues.
Werecognise the fundamental importance of
colleague engagement and talent management to
the future growth of the Group. We seek to ensure
that all colleagues are fully engaged in their work
and with the workplace. We encourage their active
participation in decision-making processes.
Workplace forums, such as works councils and
colleague committees, serve as platforms for
discussing important work-related matters.
Theseforums allow colleagues to present ideas
and questions to business leaders who consider
their viewpoints and concerns. The forums aim to
foster trust and confidence between colleagues
and the business and plays a significant role in
ourengagement strategy and diversity strategies.
Colleague engagement surveys provide us with
valuable insights into colleague satisfaction and
sentiment. Colleagues across our business can
participate in formal engagement surveys at least
once every two years. Survey results are shared
with management teams and colleagues, and local
action plans are developed to improve
engagement. The results and action plans are
discussed with business unit management, and
turnover and retention rates are continuously
monitored. The engagement survey results are
also shared with the Board. In 2025 we appointed
Gallup as our Group-wide engagement survey
partner going forward.
Non-Executive Directors attend colleague forum
meetings at larger businesses in the UK and
Ireland at least once a year, allowing them to
gather the views of colleagues and learn about
their businesses directly. The Non-Executive
Directors then share this information with the
Board, providing a colleague perspective to assist
in decision-making and considering the views of
this important stakeholder group. Where directors
cannot attend due to language barriers, a
summary of the discussion is provided.
Grievance process
Formal grievance and disciplinary procedures
across all our businesses serve to protect
colleagues’ interests, ensure workplace grievances
are addressed objectively, and deliver effective
resolution to colleague concerns. Our aim is to
handle grievances promptly and fairly to maintain
apositive workplace environment and to prevent
issues from escalating. Our SpeakUp reporting
service, managed by a third party, allows
colleagues to report concerns confidentially
andanonymously.
Confidential feedback
All our businesses have grievance and
whistleblowing processes, including the SpeakUp
reporting service, described in further detail on
page 68, ensuring that colleagues have a facility
for anonymous reporting and protection against
retaliation. SpeakUp reports are documented and
reviewed, with an annual summary presented to
the Audit and Risk Committee.
Social bargaining, collective bargaining and
freedom of association
We respect the right to freedom of association
andcollective bargaining for all our colleagues
andmaintain a neutral stance regarding their
choices to join or not join a trade union.
Colleaguesare entitled to representation by
tradeunions or other elected representatives,
inline with local regulations.
Talent
Our businesses manage recruitment, development
and talent in a way that is suited to their people
and market. To support these programmes in 2025
we developed a Group talent management system
which will be implemented across the Group
beginning in 2026. This provides a simple uniform
system for managing performance, developing our
people and following best practice in people
management for our colleagues around the Group.
Our businesses continued to develop new and
existing colleagues through training and
development programmes. Across the Group,
more than 750 colleagues are engaged in
government-funded training schemes.
Social disclosures – S1 Own workforce continued
Total colleagues
2025 2024
Total headcount at the year end 10,001 10,003
Breakdown by region
Island of Ireland 3,634 3,578
Great Britain 3,504 3,571
Northern Europe 2,064 2,067
Iberia 799 787
Colleagues by contract type
2025 2024**
Permanent 96% 95%
Temporary 4% 5%
Full-time 77% 77%
Part-time 22% 23%
Zero hours colleagues* 1% n/a
* Included for the first time in 2025. Zero hour colleagues defined as employees without a guaranteed minimum number of working
hours. Work is offered as needed.
Colleagues by gender
2025 2024**
Male 72% 73%
Female 28%∆ 27%
Colleagues by age
2025 2024**
<30 20% 20%
30-50 46% 49%
>50 34% 31%
** Restated to include data for Salvador Escoda which was acquired in Q4 2024.
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Gender distribution in management
2025 2024
Number % Number %
Board of Directors
Female 3 38% 3 38%
Male 5 62% 5 62%
Group Management Team
Female 2 40% 2 40%
Male 3 60% 3 60%
Senior Management
Female 11 38% 10 32%
Male 18 62% 21 68%
Our policy is that all colleagues receive at least 1%
above the local national minimum wage. Our
businesses operate either in the UK or the EU, and
the countries in which we operate either have a
statutory national minimum wage or our colleagues
are covered by a collective agreement which
determines minimum pay levels for the sector. In
countries where there is a statutory national
minimum wage, we define the wage benchmark for
our colleagues to be national minimum wage +1%.
Implementation of the EU Pay Transparency
Directive is progressing across the Group. In
Ireland, Woodie’s and Chadwicks have completed
job evaluations, while Finland has finalised job
levelling and initial pay analysis in line with
compliance requirements. In Spain, the project
commenced in January 2026 with leadership
engagement underway, and in the Netherlands,
implementation is scheduled for January 2027
following a government deferral. Beyond regulatory
compliance, these initiatives are modernising
reward practices, strengthening transparency,
internal equity, and data-driven decision-making
across the Group.
CEO total remuneration metrics
The table on page 108 shows the ratio of the CEO’s
total remuneration to the lower, median and upper
quartile full-time equivalent remuneration of the
Group’s UK colleagues.
Social protection
We are committed to supporting our colleagues
through various life events that may impact their
income. Our benefits programmes are designed to
provide financial security and peace of mind. We
provide safeguards against income loss due to
major life events including loss of income due to
sickness, unemployment, workplace injury and
acquired disability, parental leave and retirement.
All our businesses operate within the EU or the UK
and all colleagues are covered by at least the
statutory minimum payments for sick pay,
redundancy pay, parental leave and redundancy
payments. Many of our businesses also provide
enhancements to these benefits.
Social disclosures – S1 Own workforce continued
Accounting principles
The 2024 data, which previously excluded
Salvador Escoda, has now been restated to
reflect its inclusion following the business
joining the Group in the last quarter of 2024.
The data above includes the members of the
Board of Directors of Grafton Group plc, the
Group Management Team (GMT) and Senior
Management as at 31 December 2025 and
31 December 2024.
The membership of the Board and the GMT is
set out on pages 72 to 74.
’Senior Management’ is the group reported for
the purposes of the FTSE Women Leaders
Review, which comprises the GMT and their
direct reports.
Colleague health and safety
We believe nothing we do is so urgent that we
cannot do it safely.
We remain committed to doing everything we can
to ensure that our colleagues, customers and
business partners return home safe and well each
day. We continue to embed health and safety into
our everyday business practices at all levels of the
Group.
Safety, Health, and Environment (SHE) teams in
each of our businesses work together with their
senior leadership teams and the Group SHE
Director to integrate health and safety planning into
all aspects of the business operation. Risk
assessments are completed locally in each
business with the significant findings and safe
systems of work designed to eliminate, reduce,
isolate and/or control risks whilst reflecting and
integrating with the reality of business operations.
Each business is subject to regular health and
safety audits, including branch compliance checks
by internal teams in the businesses, external
enforcement officer inspections, and higher-level
reviews by the Group SHE Director and the Internal
Audit and Business Risk team. These measures
support and drive a continual health, safety, and
wellbeing improvement plan in each business.
We encourage all colleagues to actively contribute
to our health and safety agenda by raising
concerns, making suggestions and providing
feedback on risk assessments and safe systems
of work. This is facilitated through a combination
of day-to-day management, team meetings, focus
groups, our ’Notify’ safety management system
and the Group Risk Committee.
Unsafe event and near-miss reporting across the
Group has increased by 30% from 2021 to 2025 as
colleagues at all levels have taken positive steps to
report unsafe events or near misses, which allows
local management to investigate them before
someone is injured, helping us to eliminate or
reduce the risk of future injuries.
Training and development
We invest in continuous learning and development
opportunities for our workforce to enhance skills
and career growth and offer equal access to
development opportunities, such as
apprenticeships, training programmes, mentorship,
and career advancement resources. We review our
talent and succession plans regularly to address
disparities, reinforcing our commitment to ensuring
fairness and equality in career progression.
We keep up-to-date records on recruitment,
training and promotion that provide a transparent
view of opportunities for colleagues and their
progression.
Reward
We take a comprehensive approach to pay,
benefits and reward to ensure that all colleagues
feel valued and motivated. We offer a range of
rewards and recognition programmes to celebrate
colleague achievements and milestones. We
continuously assess the evolving needs of our
workforce and regularly update our compensation
and benefits policies. Our benefits package
includes health insurance, retirement plans, and
wellness programmes.
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Financial Statements
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Supplementary Information
During 2025 we developed an additional reporting
level to encourage all colleagues to tell us about
hazards, conditions, concerns or suggestions
through the ‘Notify’ safety management system.
Safety Matters will be launched during 2026, with a
simple QR code giving all colleagues immediate
access to flag a concern or a suggestion and
upload a picture. This is intended to further engage
and empower all colleagues to own health and
safety in their local environment as well as flagging
potential issues that may have wider implications
across the business or even the Group.
In 2025, ongoing emphasis on the Group’s key
health and safety priorities contributed to a further
reduction in both lost time injury frequency and
severity. The individual activities and initiatives in
each business are tailored to their individual risks
but the key priorities remain focused on the
potential for significant injuries:
• Keeping pedestrians safe from moving vehicles
and plant;
• The safe handling and storage of products,
including safe working at height; and
• Safe customer deliveries.
Ensuring that all colleagues remain actively
engaged and involved with key priorities, as well
astheir respective local initiatives, is essential
forsupporting our efforts to maintain safety.
Initiatives in 2025 across all businessesincluded:
• Colleagues in CPI EuroMix and Selco stopped work
for a Safety Stand Down and Safety Pause safety
discussion with business leaders on various topics
including forklift truck operations, storage and
handling practices and being a Safety Citizen.
• Chadwicks further developed their ‘Yard of the Year’
competition to showcase ‘what good looks like’ and
won the Innovation award at the Irish Health &
Safety Excellence Awards for their forklift safety
observations app. They also successfully
completed their second ‘Tour de Forks’
competition, highlighting forklift operating skills and
safe practices in a gamified competitive format.
• Woodie’s increased their focus on traffic
management plans, fitted Halo perimeter lights
on forklift trucks and replaced all aircraft steps
with dedicated electric stock pickers to remove
the need for carrying products up and down the
steps.
• Several Isero departments achieved level 3
accreditation on the Safety Culture Ladder in
2025 and Isero and Polvo continued to convert
training on safe systems of work to e-learning
programmes. Many businesses in the Group
have started converting safe systems of work
and training topics into more interactive short
films to simplify the messages for colleagues.
In 2025, the Group lost time injury frequency rate
(LTIFR) reduced by 3.7% and the lost time injury
severity rate (LTISR) reduced by 6.8%.
During the period 2021 to 2025, the LTIFR and
LTISR reduced by 16.3% and 38.6% respectively.
Visible felt leadership of health and safety across
all levels of supervisors and managers in our
businesses will continue to be a fundamental
focus in 2026 to promote our commitment to
health and safety and to positively recognise
colleagues doing the ‘right thing’ whilst reinforcing
the correct behaviours where necessary.
Colleague wellness
We believe in supporting the physical, social,
emotional and financial aspects of our colleagues’
wellbeing, which includes mental wellbeing.
We recognise that mental health is just as important
as physical health. Our leadership team and Board
are fully committed to fostering workplaces where
colleagues can speak openly about mental health,
seek support without fear of stigma and feel
confident that their wellbeing matters. We want all
our workplaces to encourage open dialogue about
mental health supported by awareness, education
and everyday conversations.
Our Wellness at Work Policy outlines our strategy
and provides a baseline standard across all our
businesses. We provide health benefits and sick pay
to ensure our colleagues stay fit and are supported
during times of mental or physical ill health.
Social disclosures – S1 Own workforce continued
We also offer assistance to colleagues dealing with
personal or work-related problems that might
affect their job performance, health and wellbeing.
This benefit provides confidential support and
counselling services toour colleagues.
We ensure a safe and pleasant work environment,
provide mandatory health and safety and
job-specific training, and offer work breaks and
holidays, along with free hot and cold
refreshments. We offer communal spaces,
recognise key life events, and support paid
volunteer days and locally approved charities.
We encourage all our businesses to view wellness
through a diversity, equality and inclusion lens
toensure we are being equitable and fair with
support that can affect colleagues’ health and
financial outcomes.
Our CEO Mental Wellbeing Statement,
whichisavailable on our Group website,
www.graftonplc.com, sets out our leadership
approach to colleague wellbeing which underpins
colleague engagement and is to the benefit of
ourbusiness and all our stakeholders. It is
important that we all show care and respect for
each other, support work-life balance and that our
businesses provide the tools and resources to
support our colleagues.
Lost time frequency
Lost time injuries/100,000 hours worked
0.84
2024
2023
2022
2021
2025
0.87
0.86
0.92
1.0 0
0.84
Lost time severity
Working days lost/2,000 hours worked
0.16
2024
2023
2022
2021
2025
0.17
0.18
0.19
0.26
0.16
Accounting principles for
health and safety
Health and safety metrics cover all
colleagues. Lost time injury frequency rate
refers to the number of work-related injuries
resulting in lost working days per 100,000
hours worked. Lost time injury severity rate
refers to the number of lost working days due
to a work-related injury per 2,000 hours
worked. Days lost are calculated from the
firstfull day to the last, based on a five-day
working week.
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Financial Statements
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Supplementary Information
Business activity Policy/approach Metrics/targets
Responsible
sourcing in the
supply chain
Human Rights Policy
Supply Chain Due
DiligencePolicy
Supplier Code of Conduct
Deforestation Policy
Proportion of suppliers by spend risk assessed
on the EcoVadis IQ+ platform
Proportion of higher risk suppliers completed
ratings assessment
Social disclosures – S2 Workers in the value chain
We carried out 16 training sessions involving 80
commercial colleagues, held monthly drop in
clinics for commercial teams and launched a
training video for commercial colleagues.
At the end of our launch phase of our programme,
over 1,750 suppliers were uploaded and risk
assessed on the EcoVadis IQ+ platform accounting
for 89.5% of 2025 spend
**
.
Suppliers accounting for 9.72% of total spend
**
were deemed higher risk and are being engaged to
complete an EcoVadis Ratings Assessment or
share alternative third-party assessment.
15.9% of suppliers by spend
**
have completed an
EcoVadis Rating. The Ratings assessments take a
few months to complete and be verified and
scored so we are aiming to increase this
percentage in 2026.
In addition to the EcoVadis process, we have
established mechanisms in place to identify supply
chain concerns. These include supplementary
screening checks and the SpeakUp anonymous
reporting service, which allows stakeholders to
report any concerns confidentially to an
independent party with safeguards in place. We
also actively encourage open dialogue between
suppliers and our commercial teams.
Colleague training and engagement
In 2025 we launched our new due diligence policy
and associated process across the Group. We
completed training sessions with commercial
teams, held drop-in sessions and developed a
training video for new commercial team members.
From September 2025 we started internal
reporting on EcoVadis performance.
Value chain worker engagement
Engagement of value chain workers is a key
element of the EcoVadis rating process that higher
risk suppliers are assessed against.
Value chain worker channels
Our SpeakUp service is available for all suppliers to
share concerns.
Severe human rights abuses
No instances have been reported or identified
through the screening process.
Resources invested
Given the importance of supply chain
management and due diligence this is an
important area of investment.
We invest resources in our risk management and
screening platforms, sustainability, procurement,
analyst and audit resource in the Group and
businesses.
* Salvador Escoda suppliers will be uploaded in phase 2 of the programme in 2026 as their sustainability onboarding is completed.
** Spend excludes Salvador Escoda.
Supply chain risk management is a top priority for
the Group, and we understand the importance of
effective management of the environmental and
social impacts in our supply chain.
Our businesses source products from a range of
suppliers including:
• Branded building materials manufacturers
• Branded raw materials suppliers
• Own brand suppliers
• Distributors and agents
• Suppliers engaged through buying groups
Our due diligence process enables us to assess
whether our suppliers have effective processes in
place to manage their environmental and social
impacts, including ensuring fair working conditions
for individuals involved in the manufacture of the
products we sell. In 2025, we launched our
EcoVadis programme with our commercial teams
and suppliers.
Policies
The Grafton Group Code of Business Conduct and
Ethics outlines the standards expected of
colleagues when interacting with suppliers.
The Grafton Group Supplier Code of Conduct
defines our requirements for suppliers regarding
legislative compliance, human rights,
environmental sustainability and business
practice. The Code is available in multiple
languages and has been published on business
unit websites. It has been approved by the Group
CEO and Group Procurement Board.
The Codes are reviewed every two years, or sooner
if significant changes occur.
In 2025 we published our Human Rights Policy
following the completion of our human rights risk
assessment. Workers in the supply chain were one
of the key groups of people that formed part of this
assessment.
Supply chain due diligence
Our due diligence process is designed to identify
and mitigate risks within our supply chain. Each of
our business units manages their own sourcing
process. Businesses in the Group work with
EcoVadis on our due diligence process with the
Group Sustainability Team overseeing the process
and reporting*.
EcoVadis is a globally recognised sustainability
rating agency conducting assessments based on
international sustainability standards to assess our
supply chain partners.
Accounting principles
Supplier information is extracted from the
Group Procurement Dashboard. All suppliers
that the Group spent over 25,000 Euro with in
2024 were uploaded onto EcoVadis IQ+.
EcoVadis risk assess suppliers. Data points
are presented based on spend in 2025
reporting period excluding Salvador Escoda
who were completing their sustainability
onboarding programme in 2025.
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Corporate Governance
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Financial Statements
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Supplementary Information
Business activity Policy/approach Metrics/targets
Product safety
andquality
Group Product Safety and
QualityPrinciples
Internal Audit assessment of effective
implementation every three years
Social disclosures – S4 Consumers and end users
As a European multinational distributor of
construction related products and solutions,
ensuring we engage our customers effectively,
listen to their ideas and concerns and respond
appropriately is critical to our commercial success.
Our customers include:
• SMEs involved in RMI
• Large private sector customers involved in the
construction industry
• Public sector organisations
• DIY customers
Our business units engage with customers in a
range of different ways such as:
• Customer service teams
• Customer surveys
• Customer insight programmes
• Product return processes
• Face-to-face conversations in branch
These engagements provide valuable insights that
inform the development of our customer
propositions.
Impact area and disclosure
Product safety and quality
Product safety and quality processes of our
manufacturing businesses are incorporated in the
resource use and circular economy information on
page 57.
In addition, our distribution and retail businesses
have approaches tailored to their product and
supply mix. These processes include contractual
arrangements with suppliers to ensure products
meet appropriate standards, product recall
processes and procedures should a concern arise,
technical manuals covering products
specifications, safety and quality standards as well
as product testing regimes for certain product
categories.
Health and safety of customers in our
branches
The Group Health and Safety Policy and approach
covers our customers in branch. Further detail on
our approach to health and safety is set out on
pages 63 and 64.
IT and cyber security, privacy and data
security
Our approach to privacy and data security is set
out on page 68.
Additional social disclosures
Human Rights
Our human rights framework includes the
following elements:
Human Rights Policy
We published a human rights policy in 2025
which covers the Group.
Human Rights Assessment
We conducted a human rights risk assessment
in 2025 to evaluate the potential impacts on
various stakeholders, including workers in the
supply chain, colleagues, customers and
communities. The assessment focused on
salience by considering the number of people
affected, the severity of potential risks, the
ability to remediate these risks and the
processes in place for managing and monitoring
these risks.
Governance
The human rights framework is overseen by the
Executive Sustainability Committee who
approved the risk assessment and policy.
Management
We have a programme to manage each of our
salient issues related to own workforce and
suppliers which are covered in other sections of
this report.
Tracking progress and communication
Progress against the framework will be
assessed annually with details provided in the
appropriate sections of our Sustainability
Statement and Modern Slavery Statement.
Community
Our businesses operate in a diverse range of
communities and many of our colleagues come
from these communities. It’s incredibly
important to act as a good neighbour and use
our skills and experience to help those in need.
Colleagues care deeply about supporting
community programmes through volunteering,
fundraising and donating. As a business we are
proud to have contributed over £1.7m to
charities and good causes which equates to
0.93% ∆ of adjusted operating profit,
significantly higher than our target of 0.8%. We
also raised over £1.0m through colleague and
customer fundraising.
The contribution by the Group to communities is
made up of:
• Volunteering time by our colleagues paid for by
the business for a host of activities which
could include everything from supporting local
schools, refurbishing buildings, skills training
and fundraising.
• Monetary donations from the business to local
community groups, usually voted for by our
colleagues. These can take the form of
donations and matched funding for colleague
fundraising activities.
• In-kind donations which includes materials
donated at a local level to support the
refurbishment of buildings and services such
asmarketing, press and print needed to raise
awareness of the organisations and issues.
Total donated by Grafton via volunteering,
materials, sponsorships and cash donations
>£1.7m
Total donated by customers
and colleagues
>£1.0m
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Financial Statements
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Supplementary Information
To deliver our business and sustainability goals we underpin
our strategy with robust governance processes, policies and
procedures, effective training and awareness, responsible
sourcing and responsive management of risks and
opportunities.
Governance disclosures – G1 Business conduct
Governance and business conduct
TCFD
Business activity Policy/approach Metrics/targets
Ethical
business
practices
Bribery and
corruption
policy
Compliance on
ethical business
practice training
(covers bribery
andcorruption)
Sustainability governance is integrated into
Grafton’s overall governance structure as outlined
on page 75.
The Board of Directors has ultimate responsibility
for sustainability governance. Sustainability was
discussed in depth at two Board meetings during
the year and an update was shared by the Group
CFO at every Board meeting. Topics covered in
2025 included sustainability legislation (in particular
deforestation and CBAM), climate change, supply
chain due diligence, sustainability legislation,
progress, plans and reporting.
The Audit and Risk Committee is responsible for
overseeing and monitoring the Group’s risk
management systems and the steps taken to
mitigate key risks, including sustainability and
climate change.
The Executive Sustainability Committee (ESC) was
established in 2023 to develop and implement the
Group’s sustainability strategy subject to approval
and ultimate oversight by the Board. Its role is to
ensure that sustainability considerations are
appropriately embedded into the wider business
strategy and commercial decision-making
process, and that sustainability opportunities and
risks have been identified and that measures are
scheduled to capitalise on opportunities and
mitigate risks.
The ESC comprises the Group CEO, Group CFO and
Group Head of Sustainability as well as Group and
business leadership. It met three times in 2025.
Sustainability and climate risks and opportunities
are assessed and reviewed by the Group Risk
Committee (GRC) which is described in further
detail on page 31. The GRC evaluates each of the
Group’s material risks, including health and safety,
sustainability and climate change, to confirm that
the risk is appropriately described and prioritised,
and that the current mitigating controls and
actions are sufficient to manage the risk within the
Group’s appetite.
The Sustainability Working Group is led by the
Group’s Head of Sustainability and includes
functional heads with expertise in property, people,
environment and ethics. The Working Group is
Governance impacts, risks and opportunities
The table below summarises Grafton’s governance IROs
ESRS topical
issue Sub-topic Impact Value chain Risk/opportunity
Business
conduct
Bribery and
corruption
Zero tolerance ofbribery and
corruption essential to meet
regulations and operate as a
responsible business.
-
 
Bribery and corruption by colleagues or third parties results in financial loss to the business and reputation damage.
Failure to comply with anti-corruption regulation.
IT & cyber
security,
privacy &
data security
Potential breaches of data
can impact all stakeholders
of the business.
-
 
Risk that external or internal parties will try to gain unauthorised access intoGroup systems to deliberately disrupt
business operations, steal information or commit fraud, resulting in financial loss, impact on the Group’s reputation
and lead to disruption or breach of privacy for colleagues, customers and suppliers. Failure to comply with data
protection regulation.
Governance
disclosures
G1 Business conduct
Strategy
linkage
Ethics
UN SDG
Key: Risk Opportunity
Upstream Own operations Downstream
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Financial Statements
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Supplementary Information
responsible for facilitating actions to help the
Group and individual businesses implement the
sustainability strategy, and respond to the
identified climate risks and opportunities.
The Group Sustainability Strategy and Climate
Programme is being implemented by the individual
business units. The CEOs of those businesses are
responsible for implementing and managing their
own sustainability and climate change programme
which is consistent with the Group’s overall
strategy. Each business has formed its own
sustainability committee or working group to
monitor and manage its sustainability actions.
In2025 we established a Group Sustainability
Forum to share ideas and best practice.
The Group Head of Sustainability had regular
meetings during the year to discuss progress
andshare good practice with the teams in the
business units.
Share awards to the Group CEO, Group CFO and
senior management made in 2025 under the
Group’s Long Term Incentive Plan included targets
relating to GHG emissions reductions (Scope 1 and
2) and gender diversity in leadership.
Ethical business practices
The Group Code of Business Conduct and Ethics,
which is available on www.graftonplc.com, reflects
our responsibility to uphold high standards of
ethics and integrity, and it sets the standard of
behaviour which colleagues, contractors, agents
and businesses are expected to follow. The Code
and associated policies are the subject of
mandatory training courses which are accessed by
colleagues through the Group’s online learning
management systems.
Compliance rates are recorded and reported to the
Group Risk Committee and Group Internal Audit
who perform testing to confirm compliance with
key aspects of the Code and Group policies as part
of annual reviews. The mandatory training courses
are expected to be completed by colleagues within
the first three months of joining the Group, and
then retaken on a regular basis (either annually or
every two years depending on the course).
Governance disclosures – G1 Business conduct continued
Overall compliance rates for the completion of
mandatory training courses by colleagues across
the Group have improved and are either above or
approaching the target level of 95%.
Mandatory training compliance rates
2025 2024*
Business conduct
andethics 94.74% 92.44%
Information security
awareness 94.50% 89.23%
Regulatory
compliance 95.70% 91.59%
* Excludes Salvador Escoda as these colleagues were onboarded
to the training system after the reporting date.
Accounting principles
Colleague compliance with the requirement to
complete three online group mandatory
training courses is monitored and reported
against. The requirement is for new starters
to complete the training within three months
of joining and then renew as required by the
course in question.
The targeted population is colleagues of all
Group businesses and Group Head Office at
31 December for each year.
Data is taken from the learning management
system of the individual business units and
collated at Group. Compliance is expressed as
a percentage of total number of colleagues in
scope of the course and classed as compliant
divided by total number of colleagues in
scope of the course. The target for
compliance is 95%.
SpeakUp
The Group SpeakUp Policy is available on
www.graftonplc.com. Colleagues are encouraged
to report any concerns they have to their line
manager including anything of an ethical business
nature. In addition, the Group has an established
whistleblowing process in each of its territories.
The SpeakUp service allows colleagues to report
concerns confidentially to an independent party
with safeguards in place to ensure cases are
investigated fully and prevent retaliation to
reporters. Awareness of the process is raised
through colleague training, business
communications and posters at each of our
locations. A link to the reporting website is also
included on the Group and individual business unit
websites. We also encourage third parties,
including customers and suppliers to report any
concerns of wrongdoing by businesses or
colleagues through the service.
During 2025 the Group transitioned to a new
third-party provider for its SpeakUp service. The
change has improved the security over reports and
investigations, and enabled better engagement
between reporters and investigation teams. In
2025 there was a 7% increase in the number of
case reports received through the SpeakUp service
compared to 2024. 27% of cases were
substantiated following investigation and resulted
in remedial action including dismissal, disciplinary,
retraining and process improvement. The average
time taken to investigate and close cases was 20
days from receipt of the report which was within
the Group’s target of 30 days.
Privacy, data and cyber security
Grafton has continued to build on the progress of
previous years in respect of process improvements
and investment in information technology to detect
and protect our data and systems. Both data
protection and information security are key areas
of focus, underpinned by comprehensive policies
and ongoing awareness campaigns to ensure that
all colleagues play their part in keeping information
safe and secure. Each business has a cyber attack
incident plan setting out the steps to react to and
recover from a cyber incident, and regular
assessments are carried out to identify and resolve
vulnerabilities. These are rehearsed each year.
Keycyber security controls are subject to regular
dashboard reporting at a business level which is
monitored by the Group’s Information Security
Steering Committee. During 2025 the Group’s
information security controls framework was
rolled out to Salvador Escoda.
Anti-bribery and corruption
The Group Anti-Bribery and Corruption Policy sets
out the Group’s zero tolerance approach to all
forms of bribery and corruption, and the standards
expected of all colleagues. It includes thresholds
and approval requirements for the offering and
receiving of gifts and hospitality to and from third
parties by colleagues. All colleagues are required
to complete an annual declaration of
independence to confirm whether they have any
known conflicts of interest, as defined in the policy.
Any declared interests are reviewed by
management and HR, with actions to manage or
remove conflicts agreed with the colleague.
Colleagues are made aware of the policy
requirements through mandatory training and
awareness videos. Compliance with the policy and
the management of potential conflicts of interest is
reviewed and tested by Group Internal Audit
through annual compliance audits.
The Group conducts regular assessments of fraud,
bribery and corruption risks. The most recent
assessment was performed in 2025 as part of
activities to comply with the UK Economic Crime
and Corporate Transparency Act. Colleagues are
required to report potential instances of bribery
and corruption to management or through the
confidential SpeakUp service. All reported matters
are disclosed to the Audit and Risk Committee.
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Financial Statements
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Supplementary Information
Management of Grafton Group plc
Scope
We have been engaged by Grafton Group plc
(“Grafton”) to perform a ‘limited assurance
engagement,’ as defined by International
Standards on Assurance Engagements, here
afterreferred to as the engagement, to report
onGrafton’s selected performance data and
statements (the “Subject Matter”) contained in
Grafton’s (the “Company’s”) Annual Report for
theyear ended 31 December 2025 (the “Report”).
The Subject Matter includes the following selected
performance data, which are also marked with a ∆
symbol in the Report:
• Greenhouse Gas (GHG) emissions:
–Scope 1 and Scope 2 (location based) absolute
tonnes of carbon dioxide equivalent
–Scope 1 and Scope 2 (market based) absolute
tonnes of carbon dioxide equivalent
• Diversity:
–% of women in group operations: Total
numberof female employees in the continuing
operations of the Group divided by total number
of employees in the continuing operations of
theGroup expressed as a percentage.
• Contribution to the community:
–Investment and/or sustainability related
fundraising (including colleague time for paid
volunteering, sponsorship of community groups,
gifts in kind and cash donations, excluding
colleague and customer fundraising) as a
percentage of adjusted operating profit for the
Group.
• Waste:
–Total tonnes of waste diverted from landfill,
divided by the total tonnes of waste generated
in operations.
Independent practitioner’s assurance report
Other than as described in the preceding
paragraph, which sets out the scope of our
engagement, we did not perform assurance
procedures on the remaining information included
in the Report, and accordingly, we do not express
aconclusion on this information.
Criteria applied by Grafton
In preparing the Subject Matter, Grafton applied
the accounting requirements of the World
Resources Institute Greenhouse Gas Protocol and
Grafton’s publicly disclosed criteria that is available
on the Grafton website (the “Criteria”). Such Criteria
were specifically designed by Grafton to guide the
measurement and reporting of the Subject Matter.
As a result, the subject matter information may not
be suitable for another purpose.
Grafton’s responsibilities
Grafton’s management is responsible for selecting
the Criteria, and for presenting the Subject Matter
in accordance with that Criteria, in all material
respects. This responsibility includes establishing
and maintaining internal controls, maintaining
adequate records and making estimates that are
relevant to the preparation of the subject matter,
such that it is free from material misstatement,
whether due to fraud or error.
EY’s responsibilities
Our responsibility is to express a conclusion
onthepresentation of the Subject Matter based
onthe evidence we have obtained.
We conducted our engagement in accordance
withthe
I
nternational Standard for Assurance
Engagements Other Than Audits or Reviews
ofHistorical Financial Information
(‘ISAE 3000
(Revised)’) and
International Standard for Assurance
Engagements on Greenhouse Gas Statements
(‘ISAE3410’), and the terms of reference for this
engagement as agreed with Grafton on
6 November 2025 and 2 March 2026.
Thosestandards require that we plan and perform
our engagement to express a conclusion on
whether we are aware of any material modifications
that need to be made to the SubjectMatter in order
for it to be in accordance with the Criteria, and to
issue a report. The nature, timing, and extent of the
procedures selected depend on our judgment,
including an assessment of the risk of material
misstatement, whether due to fraud or error.
We believe that the evidence obtained is sufficient
and appropriate to provide a basis for our limited
assurance conclusions.
Our independence and quality
management
We have maintained our independence and
confirm that we have met the requirements of
theCode of Ethics for Professional Accountants
issued by the International Ethics Standards
Boardfor Accountants and have the required
competencies and experience to conduct this
assurance engagement.
EY also applies International Standard on Quality
Management 1,
Quality Management for Firms
that Perform Audits or Reviews of Financial
Statements, or Other Assurance or Related
Services engagements
, which requires that we
design, implement and operate a system of quality
management including policies or procedures
regarding compliance with ethical requirements,
professional standards and applicable legal and
regulatory requirements.
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Financial Statements
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Supplementary Information
Independent practitioner’s assurance report continued
Description of procedures performed
Procedures performed in a limited assurance
engagement vary in nature and timing from, and
areless in extent than for a reasonable assurance
engagement. Consequently, the level of assurance
obtained in a limited assurance engagement is
substantially lower than the assurance that would
have been obtained had a reasonable assurance
engagement been performed. Our procedures
weredesigned to obtain a limited level of assurance
onwhich to base our conclusion and do not provide
allthe evidence that would be required to provide
areasonable level of assurance.
Although we considered the effectiveness
ofmanagement’s internal controls when
determining the nature and extent of our
procedures, our assurance engagement was
notdesigned to provide assurance on internal
controls. Our procedures did not include testing
controls or performing procedures relating to
checking aggregation or calculation of data
withinIT systems.
The Green House Gas quantification process
issubject to scientific uncertainty, which arises
because of incomplete scientific knowledge
aboutthe measurement of GHGs. Additionally,
GHG procedures are subject to estimation
(ormeasurement) uncertainty resulting from
themeasurement and calculation processes
usedto quantify emissions within the bounds
ofexisting scientific knowledge.
A limited assurance engagement consists of
making enquiries, primarily of persons responsible
for preparing the Subject Matter and related
information and applying analytical and other
appropriate procedures.
Our procedures included:
• Conducted interviews with personnel to
understand the business and reporting
process, aswell as the process for collecting,
collating, andreporting the Subject Matter
during the reporting period
• Checked that the calculation methodologies
have been correctly applied in accordance
with the Criteria
• Undertook analytical review procedures
tosupport the reasonableness of the data
• Identified and tested assumptions supporting
calculations
• Tested, on a sample basis, underlying source
information to check the accuracy of the data
We also performed such other procedures as we
considered necessary in the circumstances.
Conclusion
Based on our procedures and the evidence
obtained, we are not aware of any material
modifications that should be made to the Subject
Matter as of 4 March 2026 for the year ended
31 December 2025, in order for it to be in
accordance with the Criteria.
Use of our assurance statement
This report is produced in accordance with the
terms of our engagement letter dated 6 November
2025 and 2 March 2026, solely for the purpose of
reporting to the directors of Grafton in connection
with the Subject Matter for the period ended
31 December 2025.
Those terms permit disclosure on Grafton website,
solely for the purpose of Grafton showing that it
has obtained an independent assurance report in
connection with the Subject Matter.
To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other
than the Company and the Company’s directors as
a body, for our work, for this report, or for the
conclusions we have formed.
Ernst & Young
Dublin, Ireland
4 March 2026
Chair’s introduction
Board activity
The Board balances its agenda to ensure it
coversall performance, operations, strategic
andgovernance matters. The typical board
agendaincludes the following matters:
General matters: minutes, matters arising and
reports from the Chairs of the Board Committees,
governance, legal and regulatory matters.
Performance and operations: updates on trading,
financial performance and operations, along with
updates from key Group functions such as Health
and Safety, HR, Internal Audit and Risk, Investor
Relations and Sustainability.
Corporate development strategy: allocation
ofcapital for organic growth and acquisitions;
strategic development of the Group.
Board composition
Grafton has a strong Board that drives strategy,
performance and growth of the business. The
membership of the Board reflects a diverse range
of backgrounds, education, cultures, expertise,
perspectives and business experience including
Executive and Non-Executive director experience
of the distribution sector.
We were delighted to welcome Mr. David Dillon
andMs. Andrea Gisle Joosen to the Board as
Non-Executive Directors and we are confident
thattheir combined knowledge and relevant
sectorexperience will be of significant benefit
tothe Group in the coming years.
In line with the Group’s policy, all Directors will
retire and seek re-election at the 2026 Annual
General Meeting (AGM). As noted in the
Nomination Committee Report, each Director
continues to perform effectively and has
demonstrated a strong commitment to the
roleand I strongly recommend that each of
theDirectors going forward is elected/re-elected
attheAGM.
The Board is committed to promoting diversity and
supports the recommendations of the FTSE
Women Leaders Review on gender diversity and
the Parker Review on ethnic diversity. Female
representation on the Board is 38%. I am pleased
to report that the Board meets the Parker Review
target of having at least one Director from an
ethnically diverse background.
Board Committees
Each of our Committees continued to perform
effectively during the year. The reports from each
Committee Chair in this Report provide details on
the key duties, responsibilities and activities of
each Committee during the year.
Board performance review
An internal performance review was completed
during the year following an external assessment
conducted in 2024. I am pleased to report that the
results indicate that the Board and its Committees
continue to operate effectively and uphold high
standards of governance.
The findings and observations from the internal
review are presented on page 80 and will be used
to guide and inform the Board’s priorities for the
current year.
Stakeholder engagement
Creating value and progress for all of our
stakeholders is a key aim of Grafton’s purpose
‘building progress together’. Maintaining strong
engagement and clear communication with our
stakeholders is therefore an essential part of our
activities and our future success.
A summary of how we engage with our various
stakeholder groups is set out on pages 19 and 20.
AGM
We look forward to welcoming shareholders
toour2026 AGM which will be held at The Irish
Management Institute, Sandyford, Dublin 18
at10.30am on Friday 15 May 2026.
Ian Tyler
Chair
4 March 2026
Ian Tyler, Chair
Directors’ Report on
Corporate Governance
Dear Shareholder,
On behalf of the Board, I am pleased to present our
Corporate Governance Report for the year ended
31 December 2025. This report summarises our
corporate governance framework including how
we apply the principles and provisions of the UK
Corporate Governance Code (‘the Code’).
Governance at a glance
100%
Board meeting attendance
8
Number of Directors at the year end
Board gender diversity Board independence Board nationality
 Male (5)
 Female (3)
 Executive (2)
 Non-Executive (5)
 Chair (1)
 UK (4)
 Ireland (2)
 Switzerland (1)
 Sweden (1)
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Supplementary Information
Board of Directors
Ian Tyler
Non-Executive Chair
Eric Born
Chief Executive Officer
David Arnold
Chief Financial Officer
Rosheen McGuckian
Senior Independent Director
Career
Ian Tyler joined the Board as Non-Executive Director
on 1 March 2024 and assumed the role of Chair at
the conclusion of the AGM in 2024.
Mr. Tyler was appointed Group Finance Director of
Balfour Beatty plc in 1999, Chief Operating Officer in
2002 and Chief Executive in 2005, a role he held
until 2013. Mr. Tyler has previously been Chair of
Amey UK plc, Vistry Group plc, AWE Management
Ltd, Al Noor Hospitals Group plc, Cairn Energy plc
and Affinity Water Limited. He is a former Non-
Executive Director of BAE Systems plc, Cable &
Wireless Communications plc, VT Group plc and
Mediclinic International plc.
Career
Eric Born joined the Group and the Board as Chief
Executive Officer on 28 November 2022.
Mr. Born was previously Chief Executive Officer of
Swissport International AG, the leading global
aviation services provider, and Chief Executive of
Wincanton plc, a leading provider of supply chain
solutions. He was formerly President, West & South
Europe of Gategroup, the global airline catering
provider, and prior to that he held a variety of senior
roles in the retail sector in Switzerland and the UK.
Mr. Born previously served as Non-Executive
Director of Serco Group plc and John Menzies plc.
Career
David Arnold joined the Group as Group Chief
Financial Officer on 9 September 2013.
Mr. Arnold was Group Finance Director of Enterprise
plc, the UK Maintenance and Support Services
business, from 2010 to 2013 and was Finance
Director of Redrow plc, the house builder, from 2003
to 2010. He previously held senior financial
positions with Six Continents plc, the hotels group
and Tarmac plc, the building materials company.
Career
Rosheen McGuckian was appointed to the Board on
1 January 2020 and was appointed Senior
Independent Director with effect from 21 October
2025.
Dr. McGuckian is Chief Executive Officer of NTR plc,
an unquoted Irish company that acquires,
constructs and manages sustainable infrastructure
assets.
Immediately prior to joining NTR plc, Dr. McGuckian
was Chief Executive Officer of GE Money Ireland,
the consumer finance division of General Electric.
Dr. McGuckian previously served as Non-Executive
Director of Green REIT plc, the Social Innovation
Fund of Ireland, the Irish Aviation Authority and the
Strategic Banking Corporation of Ireland.
Current external appointments
Non-Executive Director of Anglo American plc, b.p.
plc and Synthomer plc and Chair of BMT Group Ltd,
a privately owned design and technical consulting
firm.
Current external appointments
None.
Current external appointments
Non-Executive Director of Crest Nicholson Holdings
plc, a leading residential housebuilder operating in
Southern England and the Midlands.
Current external appointments
Chief Executive Officer of NTR plc; Non-Executive
Director of Sicon Limited, the parent company of
John Sisk & Son, an international engineering and
construction company.
Board length of service as at 4 March 2026
2.0 years
Board length of service as at 4 March 2026
3.3 years
Board length of service as at 4 March 2026
12.5 years
Board length of service as at 4 March 2026
6.2 years
Committee membership key:
 
Audit and Risk Committee
 
Nomination Committee
 
Remuneration Committee
 
Finance Committee
 
Chair
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Board of Directors continued
Avis Darzins
Non-Executive Director
Mark Robson
Non-Executive Director
David Dillon
Non-Executive Director
Andrea Gisle Joosen
Non-Executive Director
Career
Avis Darzins was appointed to the Board on
1 February 2022.
Ms. Darzins is a former Partner at Accenture in
London where she worked with many well-known
national and international brands in the retail and
consumer products sectors.
Ms. Darzins has extensive experience of business
change in a variety of sectors including Director of
Business Transformation at Sky plc.
Ms. Darzins is a former independent consultant
with EY. She served as Non-Executive Director at
Moss Bros Group plc until the business was taken
private in June 2020.
Career
Mark Robson was appointed to the Board on
1 December 2023.
Mr. Robson is a highly experienced former Chief
Financial Officer with a board level career in listed
companies spanning over two decades and
experience, gained at a senior executive level, of the
manufacture and distribution of materials to small
builders through a national branch network.
Mr. Robson joined the Board of Howden Joinery
Group plc as CFO in April 2005 and also served as
Deputy CEO for his final six years on the Board until
his retirement in December 2021. Prior to joining
Howdens, Mr. Robson served for six years as CFO
of Delta plc, the international industrials group.
Career
David Dillon was appointed to the Board on 12 May
2025.
Mr. Dillon is a highly experienced senior executive
with a 25-year career across Europe and the United
States at CRH plc, a leading provider of building
materials solutions. Mr. Dillon was a member of
CRH plc’s Executive Committee until the end of
2023, and most recently held the senior leadership
positions of President, Europe Lightside &
Distribution; President, Strategy & Development; and
President, Europe. Prior to CRH, he worked in the
airline industry with Aer Lingus Group plc.
Career
Andrea Gisle Joosen was appointed to the Board on
1 July 2025.
During her executive career, Ms. Gisle Joosen held
numerous leadership roles in the media and
technology sectors including as CEO of Boxer
Sweden and as Managing Director of Nordics for
Panasonic, Chantelle Group and Twentieth Century
Fox. She previously chaired Sweden-headquartered
Acast AB, Bilprovningen AB and Charge Amps AB,
and was a Non-Executive Director at Currys plc,
Billerud AB, ICA Gruppen, James Hardie Industries
plc and Mr Green & Co.
Current external appointments
Non-Executive Director of Marshalls plc, the UK’s
leading manufacturer of landscaping products;
Non-Executive Director of Safestore Holdings plc,
the UK’s largest self-storage company; Senior
Independent Trustee and Trustee Board member of
Barnardo’s, the UK’s largest children’s charity.
Current external appointments
Non-Executive Director of Morgan Sindall Group plc,
a leading UK construction and regeneration group.
Current external appointments
Non-Executive Director of John Paul Construction
Limited, a leading contractor operating in Ireland,
the UK and mainland Europe; Non-Executive
Director of Consolis Group, a European leader in
precast concrete solutions; Chair of Kyrie Farm CLG,
a charity based in Ireland.
Current external appointments
Non-Executive Director and Chair of the
Remuneration Committee of Viaplay Group AB
andEvoke plc; Non-Executive Director of Zühlke,
Logent AB, and Stadium AB.
Board length of service as at 4 March 2026
4.1 years
Board length of service as at 4 March 2026
2.3 years
Board length of service as at 4 March 2026
0.8 years
Board length of service as at 4 March 2026
0.7 years
Committee membership key:
 
Audit and Risk Committee
 
Nomination Committee
 
Remuneration Committee
 
Finance Committee
 
Chair
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Our Group Management Team
Eric Born
Chief Executive Officer
David Arnold
Chief Financial Officer
Susan Lannigan
General Counsel and Company
Secretary
Carmen Lothian
Group Chief Human
Resources Officer
Stephen Hunter
Group Corporate
DevelopmentDirector
Career
Eric Born joined the Group and the Board
as Chief Executive Officer on
28 November 2022.
+ Read more: See biography on page72.
Career
David Arnold joined the Group as
GroupChief Financial Officer on
9 September 2013.
+ Read more: See biography on page72.
Career
Susan Lannigan joined Grafton in April
2015 and was appointed General Counsel
and Company Secretary in July 2024.
Susan leads Grafton’s legal, company
secretarial and communications
functions. Susan previously worked as a
private practice solicitor and held
company secretarial roles in private
practice and in the financial services
industry.
Career
Carmen Lothian joined Grafton in
January 2026 as Group Chief Human
Resources Officer. Carmen began her
professional journey at Deloitte as a tax
consultant before moving into industry
where she held HR and Transformation
senior leadership positions across major
UK, US and Irish headquartered
organisations.
Career
Stephen Hunter joined Grafton on
1 January 2018 after relocating from
London to Dublin. Stephen has over 10
years’ experience in corporate finance,
having previously worked at EY and a
boutique corporate finance firm in
London. Stephen has been involved with
every acquisition since joining Grafton
and is also involved in the strategic
initiatives across the Group.
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Financial Statements
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Supplementary Information
Governance framework
The Group’s organisational structure is established and overseen by the Board and designed to enable the Group
to operate to the highest standard of corporate governance and facilitate effective decision-making.
Senior Leadership Team
Responsible for the operation of the Group’s
trading businesses and central functions and
for implementing the Group’s strategic,
governance and sustainability programmes.
Executive Sustainability Committee
Supervises and makes operational decisions in
relation to the Group’s sustainability activities.
+ Read more: Sustainability Statement page 67.
Group Management Team
Supports the CEO in executive management of
the Group.
+ Read more: Members of the GMT are set out
on page 74.
Group Risk Committee
+ Read more: The
responsibilities of the Group
Risk Committee are set out in
the Risk Management section
on pages 31 and 32.
Audit and Risk Committee
Responsible for the oversight
of the Group’s financial
reporting and its systems
ofrisk management and
internal control and
monitoring the effectiveness
of the Internal and External
audit functions.
+ Read more: Audit and Risk
Committee Report page 81.
Board Committees
Remuneration Committee
Responsible for ensuring that
Executive Directors are
incentivised to successfully
implement the Board’s
strategy and that
remuneration is aligned with
the interests of shareholders
and other stakeholders over
the longer term.
+ Read more: Report of the
Remuneration Committee
page 87.
Nomination Committee
Responsible for reviewing the
Board structure and ensuring
that it has the necessary
balance of skills, experience
and diversity to oversee and
deliver the Group’s strategy.
+ Read more: Report of the
Nomination Committee page
84.
Finance Committee
Responsible for considering
the financing requirements of
the Group, amendments to
the terms of existing bank
facilities, approval of leases
for assets other than
property up to a specified
level and litigation matters.
Chief Executive Officer
Responsible for the overall management of the
business, for proposing and delivering the
Group’s strategy and implementing and
delivering the annual business plan;
Ensuring effective leadership, coordination and
performance management of the executive
team; and ensuring the identification,
enhancement and development of the
executive leadership talent pool.
+ Read more: The responsibilities of the Chief
Executive Officer are set out on page 78.
Board of Directors
The Board is collectively responsible for the long-term success of the Group. Its role is to establish the Group’s purpose, values and strategy, to provide leadership and management oversight and to create
sustainable value taking account of the interests of all its stakeholder groups. It is also responsible for oversight of the health and safety performance of the Group and for establishing a framework to assess
andmanage risk, including sustainability and climate risk.
The Board is assisted by Board Committees, each of which is responsible for the matters delegated by the Board and set out in its own Terms of Reference.
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Directors’ Report on Corporate Governance
The Finance Committee is chaired by Mr. Eric
Born, CEO and also comprises Mr. David Arnold,
CFO and Mr. David O’Donoghue, Group Financial
Controller. The Committee considers the financing
requirements of the Group, considers amendments
to the terms of existing bank facilities, approval of
leases for assets other than property up to a
specified level, and litigation matters.
The Board is briefed on key discussions and
decisions by each Committee Chair at the Board
meeting following the relevant Committee meeting.
The Disclosure Committee is a Management
Committee comprising Mr. Eric Born, CEO and Mr.
David Arnold, CFO. The Committee holds meetings
as required to ensure the accuracy and timeliness
of compliance with the EU Market Abuse
Regulation.
Company purpose, values and strategy
A description of the Group’s purpose of ‘Building
Progress Together’, along with information about
our core values and strategy is available on pages
7 to 10.
Objectives and controls
The Group’s strategic objectives are set out on
page 8 and a summary of performance against the
Group’s KPIs is on pages 17 and 18. The Board
also receives regular updates across a broad range
of internal KPIs and performance metrics.
The Group has a clear risk management framework
in place as described on page 31 to identify and
manage the key risks to the Group’s business.
Engagement
A description of how the Board engages with its
stakeholders is set out on pages 19 and 20.
Colleague engagement
The Board has established structures to provide
for effective engagement by the Board with the
wider workforce. These include confidential
colleague feedback surveys, the results of which
are reported to the Board, and Non-Executive
Director engagement with colleagues through
Colleague Forums.
Non-Executive Directors attended meetings of the
Colleague Forums with colleagues from the UK and
Ireland during the year. The forums discussed a
wide range of topics which included training
opportunities, wellbeing, diversity and inclusion,
enabling Non-Executive Directors to hear colleague
feedback at first-hand and to update the Board. The
outcome of the meetings and the insights provided
helped inform the Board’s decision-making.
Business model and risks
The Group’s business model is set out on page 9.
The Risk Management Report on pages 31 to 42
contains an overview of the principal and emerging
risks facing the Group and a description of how
they are managed.
Assessing and monitoring culture
The Board recognises the importance of
communication and engagement with the wider
workforce as a means of assessing and
monitoring culture. Colleague Forums held during
the year in the UK and Ireland provided
opportunities for Directors to meet colleagues and
enable their views to be heard at Board level. The
Board, via the Audit and Risk Committee, receives
and considers whistleblowing reports received on
matters raised through SpeakUp, the independent
Group-wide confidential reporting service, and
through reports and observations from Internal
Audit reporting. Colleague engagement is also
monitored through engagement survey results.
Shareholder engagement
The Company recognises the importance of
regular dialogue and communication with
shareholders. Meetings are held with existing and
prospective institutional shareholders and the
Group’s largest shareholder principally after the
release of half-yearly and annual results. The
Group also issued Trading Updates in January,
May, July and November of 2025.
Presentations for analysts and investors were
hosted by the CEO and CFO on 6 March 2025 and
4 September 2025 following the announcement of
the Final Results for 2024 and the Interim results
for 2025 respectively and were made available via
live webcast on the Company’s website.
Recordings of the 2024 Final Results and the 2025
Interim results webcasts are available to view at
www.graftonplc.com.
The Group website provides the full text of all
announcements including the half-yearly and
annual results and investor presentations. As noted
above, the Group also issues regular trading
updates on the performance of the overall Group
and individual business segments. Significant or
noteworthy acquisitions are also announced to the
market.
While the Chair takes overall responsibility for
ensuring that the views of shareholders are
communicated to the Board as a whole, contact
with major shareholders is primarily maintained
through the CEO and the CFO. The Chair and the
Senior Independent Director are available to meet
with shareholders if they have concerns which
have not been resolved through the normal
channels of CEO or CFO or where such contacts
are not appropriate. The Board receives feedback
from investors following meetings with
management following the announcement of the
Final Results and the Interim Results and also
receives analysts’ reports on the Group.
In 2025, the Board commissioned an investor
perception study which provided the opportunity
for investors to share their perspectives on the
Group’s strategy, financial position, capital
allocation, management and governance. The
outcome of the study and the insights received will
help to inform the Board’s discussions on Group
strategy development.
Compliance with the 2024 UK
Corporate Governance Code
Grafton Group plc (‘the Company’) is incorporated
in Ireland and is subject to Irish company law. Its
shares are listed on the London Stock Exchange
and the Group is subject to the 2024 UK Corporate
Governance Code (‘the Code’) for the 2025
reporting year.
The Company has complied throughout the
accounting period with all relevant provisions set
out in the Code. This Report describes how the
Company applied the principles and met the
provisions of the Codeduring the year.
1. Board leadership and
company purpose
Board meetings
The Board met on eight occasions during 2025,
including a separate strategy meeting, and the
attendance of individual directors at each meeting
is set out in the table on page 78. The Board also
received updates on developments from
management between meetings as appropriate.
The Board takes the major decisions as set out in
the schedule of matters reserved to it for decision,
while allowing management sufficient scope to run
the business within a tight reporting framework.
The Group has arranged insurance cover up to a
specified limit in respect of legal actions against
directors and officers.
Board Committees
The Board is assisted by Committees that focus
on specific responsibilities as delegated by the
Board. The Terms of Reference of the Audit and
Risk Committee, Remuneration Committee and
Nomination Committee are available on the
Group’s website. Membership and length of
service of Board Committees is shown within each
of the Committee reports. Ms. Rebecca
McAleavey, Deputy Company Secretary, is
Secretary to the Audit and Risk Committee. Ms.
Susan Lannigan, Company Secretary, is Secretary
to the Remuneration Committee and the
Nomination Committee and she also supports the
work of the Audit and Risk Committee.
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Financial Statements
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Supplementary Information
All shareholders are invited to attend the AGM
which provides the opportunity for shareholders
toput questions to the Chair, Committee Chairs
and Executive Directors and to meet informally
with Directors before and after the meeting.
The Company Secretary communicates with
shareholders on corporate governance matters
asappropriate, particularly in the lead up to the
AGM and other shareholder meetings.
The Notice of AGM, which specifies the time,
date,place and the business to be transacted,
issent toshareholders at least 21 days before
themeeting. The AGM is normally attended by all
Directors. All resolutions to be tabled at the 2026
AGM will be decided on a poll in accordance with
the Articles of Association of the Company and
inline with market practice. In a poll, the votes
ofshareholders present and voting at the meeting
are added to the proxy votes received in advance
and the total number of votes for, against and
withheld for each resolution are announced.
Thisinformation is made available on the
Company’s website following the meeting.
All other general meetings are called Extraordinary
General Meetings (EGMs). An EGM called for the
passing of a special resolution must be called by at
least 21 clear days’ notice. Provided shareholders
have passed a special resolution at the immediately
preceding AGM and the Company allows
shareholders to vote by electronic means, an
EGMto consider an ordinary resolution may, if the
Directors deem it appropriate, be called at 14 clear
days’ notice. In view of the Group’s international
shareholder base, it is the Board’s policy to give 21
days’ notice of EGMs unless the Directors believe
that a period of 14 days is merited by the business
of the meeting and the circumstances surrounding
the business of the meeting.
A quorum for a general meeting of the Company
isconstituted by two or more shareholders present
in person and entitled to vote. The passing of
resolutions at a meeting of the Company, other
than special resolutions, requires a simple
majority. A special resolution requires a majority
ofat least 75% of the votes cast to be passed.
Shareholders have the right to attend, speak,
askquestions and vote at general meetings. In
accordance with Irish company law, the Company
specifies the record date for the general meeting,
by which date shareholders must be registered
inthe Register of Members of the Company to
beentitled to attend. Record dates are specified
inthe notice of general meeting.
Shareholders may exercise their right to vote
byappointing a proxy/proxies, by electronic
meansorin writing, to vote some or all of their
shares. Therequirements for the receipt of
validproxy forms are set out in the Notice
convening the meeting.
A shareholder, or a group of shareholders, holding
at least five per cent of the issued share capital of
the Company, has the right to requisition a general
meeting. A shareholder, or a group of shareholders,
holding at least three per cent of the issued share
capital of the Company, has the right to put an
itemon the agenda of an AGM or to table a draft
resolution for inclusion on the agenda of a general
meeting, subject to any contrary provision in Irish
company law.
Time commitment of the Chair and
Non-Executive Directors
The Chair and Non-Executive Directors are
required to confirm prior to appointment to the
Board that they will have sufficient time available
to discharge their responsibilities effectively and
that they have no conflicts of interest.
This matter is given very careful consideration by
the Nomination Committee and the Board before
any appointments are made. Following
appointment, the Board considers requests by
Directors wishing to undertake new directorships
and considers both the time commitment involved
and any potential conflicts of interest with their
roles as Directors ofGrafton.
The Board recognises the benefits of the Chair and
Non-Executive Directors having varied and broad
experience. It considers investor guidance on this
area as part of the annual review of the time
commitments of each Director. The Chair and all
Non-Executive Directors had a 100% attendance
record at all Board Meetings held during the year.
Ms. Andrea Gisle Joosen was unavailable for one
meeting of the Audit and Risk Commitment due to
pre-existing commitment prior to her appointment
to the Board. All Directors demonstrated high
levels of availability and responsiveness where
discussions were required from time to time
between Board Meetings. The Board remains
confident that the Chair and individual members
continue to devote sufficient time to undertake
their responsibilities effectively.
No new Directorships were taken on by
membersof the Board during the year except
forthe appointment of Ian Tyler as Non-Executive
Director of b.p. plc. This proposed appointment
was considered and approved in advance by
theBoard who were satisfied that subject to
areduction in Mr. Tyler’s existing mandates, that
hecontinues to devote sufficient time to undertake
his responsibilities effectively. Mr. Tyler stepped
down as Non-Executive Director and Senior
Independent Director of Synthomer plc
during2025.
2026 AGM
The 2026 AGM will be held at the Irish
Management Institute (IMI), Sandyford Road,
Dublin, D16 X8C3, Ireland at 10.30am on Friday
15 May 2026.
Stakeholder views
The Code provides that the Board should
understand the views of the Company’s key
stakeholders other than shareholders and describe
how their interests and the matters set out in
section 172 of the UK Companies Act 2006 have
been considered in Board discussions and
decision-making. An overview of how the Group
engages with all of its stakeholders is set out on
pages 19 and 20.
Whistleblowing
All colleagues have access to a confidential
SpeakUp reporting service which provides
aneffective channel to raise concerns to an
independent third party. The Board, via the Audit
and Risk Committee, receives regular reports
detailing all reports made through this service
andsubsequent action taken.
Conflicts of interest
The Board confirms that a system for the
declaration of conflicts of interests is in place.
Unresolved concerns
No unresolved concerns about the operation of
theBoard or the management of the Group were
raised by any Director during the year.
Directors’ Report on Corporate Governance continued
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Financial Statements
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Supplementary Information
Directors’ Report on Corporate Governance continued
2. Division of responsibilities
Chair
The Chair was independent on appointment to the
role in May 2024. The responsibilities of the Chair,
as set out on page 78, are set out in writing and
agreed by the Board.
Board balance and division
of responsibilities
The Board believes that it has an appropriate
balance of Executive and Non-Executive Director
representation and it is Board policy that no
individual or small group of individuals can
dominate its decision-making.
A statement of how the Board operates, including
aschedule of the decisions reserved for the Board
and those delegated to management, is set out
inwriting and agreed by the Board. The schedule
of matters specifically reserved for Board
decisioncovers:
• Strategic decisions and corporate developments;
• Risk management and internal controls;
• Acquisitions and capital expenditure above
agreed thresholds;
• Interim and final dividends and share purchases;
• Changes to the capital structure;
• Tax and treasury management;
• Approval of half-yearly and annual financial
statements; and
• Budgets and matters currently or prospectively
affecting the Group and its performance.
Effective and efficient functioning of
the Board
Directors have full and timely access to all relevant
information in an appropriate form. Reports and
papers are circulated to Directors in sufficient time
to enable them to prepare for Board and
Committee meetings. All Directors receive monthly
management accounts and reports covering the
Group’s performance, development proposals and
other matters to enable them to review and
oversee the performance of the Group on an
ongoing basis. Each year the Board typically
devotes one of its meetings to strategy and one to
the following year’s budget. The strategy meeting
covers the macro-economic, political and social
Chair
• Leading and managing the business of the Board to provide clear direction and focus for the Group;
• Demonstrating ethical leadership and promoting the highest standards of integrity and probity;
• Demonstrating objective judgement and promoting a culture of openness and debate;
• Setting the agenda and culture in the boardroom;
• Facilitating constructive Board relations;
• Ensuring that members of the Board receive a timely flow of accurate, high-quality and clear information; and
• Ensuring that there is timely and appropriate communication to shareholders.
Chief Executive Officer
• Being accountable to the Board for all authority delegated to executive management;
• Taking overall responsibility for the management of the business;
• Proposing and delivering the Group’s strategy;
• Implementing and delivering the annual business plan;
• Effective leadership, coordination and performance management of the executive team;
• Ensuring the identification, enhancement and development of the executive leadership talent pool; and
• Monitoring closely the operating and financial results of the Group against plans and budgets.
Senior Independent Director
• Being available to shareholders who have concerns that cannot be addressed through the Chair, the Chief Executive Officer or the Chief Financial Officer;
• Acting as a sounding board for the Chair;
• Acting as an intermediary for the other Directors when necessary;
• Working with the Chair and other Directors and/or shareholders to resolve significant issues; and
• When called upon, seeking to meet a sufficient range of major shareholders in order to develop a balanced understanding of their views.
The number of Board Meetings and Committee Meetings held during the year and attended by each Director was as follows:
Board Audit and Risk Remuneration Nomination
Number of meetings Total Attended Total Attended Total Attended Total Attended
I. Tyler 8 8 – – – – 4 4
E. Born 8 8 – – – – – –
D. Arnold 8 8 – – – – – –
R. McGuckian 8 8 5 5 6 6 4 4
A. Darzins 8 8 5 5 6 6 4 4
M. Robson 8 8 5 5 6 6 4 4
D. Dillon 5 5 2 2 3 3 1 1
A. Gisle Joosen 4 4 2 1 3 3 1 1
Retired members
S. Murray 7 7 4 4 3 3 3 3
V. Crowley 7 7 4 4 5 5 3 3
Mr. David Dillon was appointed to the Board on 12 May 2025 and member of the Audit and Risk, Remuneration and Nomination Committees on 18 June 2025.
Ms. Andrea Gisle Joosen was appointed to the Board and member of the Audit and Risk, Remuneration and Nomination Committees on 1 July 2025.
Mrs. Susan Murray stepped down as Chair and member of the Remuneration Committee on 2 September 2025.
Mrs. Susan Murray and Mr. Vincent Crowley stepped down from the Board on 21 October 2025.
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Financial Statements
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Supplementary Information
systems, construction market, housing market,
business sectors, competitive landscape and
challenges and opportunities in existing and
prospective countries of operation for the Group.
Italso covers a review of the existing portfolio of
businesses, specialist segments of the distribution
market, competitive landscape and possible
acquisition opportunities.
All Directors have access to independent
professional advice at the Group’s expense where
necessary to enable them to discharge their
responsibilities as Directors.
The Board has access to a Board Handbook
comprising a suite of governance documentation
setting out key roles and responsibilities, matters
reserved for Board decision and delegations of
authority. The Board, supported by the Company
Secretary, carried out a full review and update of
the Governance Handbook during the year.
Independence of Non-Executive Directors
The five Non-Executive Directors, Dr. Rosheen
McGuckian, Ms. Avis Darzins, Mr. Mark Robson,
Mr. David Dillon and Ms. Andrea Gisle Joosen are
considered by the Board to be independent in
character and free from any business or other
relationship which could materially interfere with
the exercise of independent judgement. The Board
has determined that each of the Non-Executive
Directors fulfilled this requirement and is
independent. In reaching that conclusion, the
Board considered the principles relating to
independence contained in the Code.
Board independence
71% of the Board, excluding the Chair, are
Non-Executive Directors whom the Board
considers to be independent.
Senior Independent Director
Dr. Rosheen McGuckian succeeded Mrs. Susan
Murray as the Senior Independent Director on
21 October 2025 and is available to act as a
sounding board for the Chair, and as an
intermediary for the other Directors, if necessary.
Dr. McGuckian is also available to shareholders
who may have concerns that cannot be addressed
through the normal channels of Chair, Chief
Executive Officer or Chief Financial Officer.
The role of the Senior Independent Director
isclearly set out in a document approved by
theBoard.
Performance of Executive Directors
Non-Executive Directors constructively
challengemanagement proposals and review
theperformance of the Group. During the year,
theChair and Non-Executives met with and
without the Executive Directors present.
Roles and responsibilities
There is a clear division of responsibility between
the Chair and the Chief Executive Officer. The
responsibilities of each role are clearly
documented in schedules approved by the Board.
Company Secretary
The Directors have access to the advice and
services of the Company Secretary, Ms. Susan
Lannigan, who advises the Board on governance
matters. The Company’s Articles of Association
and Schedule of Matters reserved for the Board
provide that the appointment or removal of the
Company Secretary is a matter for the full Board.
External commitments
The Board is satisfied that the external
commitments of the Chair and the Non-Executive
Directors do not conflict in any way with their
duties and Commitments to the Company.
Executive directors do not hold more than one
non-executive role in a FTSE 100 company or other
significant appointment.
Directors’ Report on Corporate Governance continued
3. Composition, succession and
evaluation
Board appointments procedure and
succession planning
The Board’s general policy is to keep the overall
composition and balance of the Board under
review and to manage the orderly succession of
Non-Executive Directors without compromising
the effectiveness and continuity of the Board and
its Committees.
A description of the work of the Nomination
Committee and the procedure for appointment
ofnew Directors is set out on pages 84 to 86.
The Board considers senior management
succession planning with a view to developing,
over the coming years, a strong succession
pipeline for key positions up to and including
Executive Director level.
Board composition
It is the Group’s policy that the Board comprises
amajority of Non-Executive Directors. At
31 December 2025, the Board was made up of
eight members comprising the Non-Executive
Chair, two Executive Directors and five
independent Non-Executive Directors.
The Board considers that its size and structure
isappropriate to the scale, complexity and
geographic spread of its operations and that the
number of Non-Executive Directors is considered
sufficient to enable the Board and its Committees
to operate effectively without excessive reliance
onany individual Non-Executive Director. The
Board believes that Executive and Non-Executive
Directors between them have the necessary skills,
knowledge and international business experience,
gained from a diverse range of industries and
backgrounds, required to manage the Group.
Theskills, expertise and experience of the Board
isused to review strategy, allocate capital, monitor
financial performance and consider executive
management’s response to market developments
and operational matters.
The terms and conditions of appointment of
Non-Executive Directors, which include the time
commitment expected from each Director, are
available for inspection by any person at the
Company’s registered office during normal
business hours and prior to the AGM.
The overall composition and balance of the Board
is kept under review as outlined in the programme
of work undertaken by the Nomination Committee
in its report on pages 84 to 86.
Director election/re-election
In accordance with the provisions of the Code, the
Board has decided that all Directors should retire
at the 2026 AGM and offer themselves for
election/re-election.
The Board undertakes a formal annual evaluation
of the performance of its Directors and is satisfied
that all Directors who are proposed for re-election
continue to discharge their obligations as Directors
and contribute effectively to the work of the Board
and its Committees.
Further details on the Board evaluation are set out
on page 80 and in the report of the Nomination
Committee on pages 84 to 86.
Chair tenure
Mr. Ian Tyler was appointed to the Board on
1 March 2024 as Non-Executive Director and Chair
Designate and assumed the role of Non-Executive
Chair on 2 May 2024.
Performance of the Chair and Non-Executive
Directors
The Non-Executive Directors, facilitated by
theSenior Independent Director, met during the
year without the Chair present to appraise his
performance. The evaluation of individual Directors
involved a meeting between each of them and
theChair.
The Board confirms that each of the Non-
Executive and Executive Directors continues to
perform effectively and demonstrate a strong
commitment to the role.
79
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Sustainability Statement
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Corporate Governance
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Financial Statements
191-198
Supplementary Information
Directors’ Report on Corporate Governance continued
2025 Board performance review
A formal review of the performance of the
Board,its Committees and individual Directors
isundertaken each year, including an external
evaluation every three years. The process
isdesigned to ensure that the effectiveness
oftheBoard is maintained and improved.
An internal performance review was conducted
during the year which involved each Director
independently completing a questionnaire
thatcovered a range of issues including the
effectiveness of the Board and its Committees,
strategy and development, internal controls and risk
management, monitoring financial and operating
performance and shareholder value creation.
The review concluded that the Board and its
Committees operate effectively and that each
Director contributes to the overall effectiveness
and success of the Group. The actions identified
from the 2025 performance evaluation related
primarily to strategy formulation and articulation,
and Board and executive succession planning.
The Chair, along with the Company Secretary,
willensure that areas identified for improvement in
the 2025 board evalution will be considered during
2026. In line with the requirements of the Code, the
next externally-facilitated performance evaluation
of the Board will occur in 2027.
The activity of the Board in 2025 also included
consideration of the recommendations made as
part of the external performance evaluation which
was conducted in 2024. This included ongoing
discussion on the evolution of the Group’s strategic
purpose and strategy development. The Board
hasalso implemented an updated cadence of
boardmeetings with effect from 2026 to include
additional time for site visits and engagement
withbusiness unit management teams.
4. Audit, risk and internal control
Independence of internal and external audit
The Audit and Risk Committee is responsible for
monitoring the integrity of the Group’s financial
statements and of the external audit process and
overseeing the independence and effectiveness of
the Internal Audit function and the external auditor.
Fair, balanced and understandable
The assessment of the Company’s position and
prospects as fair, balanced and understandable
isset out in the Statement of Directors’
Responsibilities on page 115.
Risk and internal control
The Board confirms that there is a process
foridentifying, evaluating and managing the
keyrisksfaced by the Group. A description of the
riskmanagement process and of how the Board
identifies the principal and emerging risks facing
the Group is set out on pages 31 to 42.
Audit and Risk Committee
The Board has established an Audit and Risk
Committee which is comprised of five independent
Non-Executive Directors. The Committee has
competence relevant to the sector in which the
Group operates.
Role and responsibilities of the Audit and
Risk Committee
A description of the role and responsibilities of
theAudit and Risk Committee is available in the
Committee Report on pages 81 to 83. The Terms
of Reference of the Committee are available on the
Group’s website www.graftonplc.com.
A description of the activity of the Committee
during the year is available in the Committee
Report on pages 81 to 83.
Effectiveness of risk management and
internal controls
A description of how the Audit and Risk Committee
monitors the effectiveness of the Group’s system
of risk management and internal control is set out
on page 82.
Going concern assessment
The Group’s net cash position, before recognising
lease liabilities, was £274.0m at 31 December 2025
(31 December 2024: £272.1m). Net debt including
lease obligations was £123.4m at 31 December
2025 (2024: £131.7m). The Group had liquidity
of£776.8m at 31 December 2025 (2024: £776.2m)
ofwhich £491.8m (2024: £505.4m) was held in
accessible cash and deposits and £285.0m
(2024: £270.8m) in undrawn revolving
bankfacilities.
No refinancing of debt is due until September
2028, the Group does not have a leverage
(netdebt/EBITDA) covenant in its financing
arrangements and its assets are unsecured.
Having made appropriate enquiries, the Directors
have a reasonable expectation that Grafton Group
plc, and the Group as a whole, have adequate
resources to continue in operational existence
forthe near future, being at least 12 months from
the date of approval of these financial statements.
Having reassessed the principal risks, as set out
on pages 33 to 38 of the 2025 Annual Report
andAccounts and based on expected cashflows
and the strong liquidity position of the Group,
thedirectors considered it appropriate to adopt
thegoing concern basis of accounting in preparing
its financial statements.
5. Remuneration
The Board has adopted remuneration policies
thatare considered sufficient to attract, retain
andmotivate Directors of the quality required to
manage the Company successfully whilst ensuring
that the performance-related elements of pay are
both stretching and rigorously applied.
The Board has established a Remuneration
Committee comprising five independent Non-
Executive Directors. Details of the Committee’s
keyresponsibilities and a description of its work
during 2025 are contained in the Report of the
Remuneration Committee on Directors’
Remuneration on pages 87 to 111.
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Audit and Risk Committee Report
Audit and Risk Committee
Dear Shareholder,
I am pleased to present the report of the Audit
andRisk Committee for the year ended
31 December 2025.
Mark Robson, Chair of the Audit and Risk Committee
Membership Length of service*
Mark Robson (Chair)
2.2 years
Rosheen McGuckian
5.8 years
Avis Darzins
3.5 years
David Dillon
0.7
years
Andrea Gisle Joosen
0.7
years
* Committee membership as of 4 March 2026.
Key duties of the Committee
Financial reporting
• Monitoring the integrity of the Group’s financial
statements and announcements relating to the
Group’s performance; and
• Advising on whether the Annual Report and
accounts, taken as a whole, is fair, balanced and
understandable, and whether it provides the
information necessary for shareholders to
assess the Group’s performance, business model
and strategy.
Risk management and internal control
• Overseeing the effectiveness of the Group’s
internal control and risk management, including
sustainability risks, and the steps taken to
mitigate the Group’s risks; and
• Reviewing the effectiveness of the Group’s
internal financial controls.
External auditor
• Monitoring the effectiveness of the external audit
process, conducting the tender process and
making recommendations to the Board in
relation to the appointment, reappointment and
removal of the External Auditor; and
• Overseeing the relationship between the Group
and the External Auditor including approving the
remuneration, terms of engagement and scope
of audit.
Internal audit
• Monitoring and reviewing the scope, resourcing,
findings and effectiveness of the Group’s Internal
Audit function.
Governance
• Reporting to the Board on how the Committee
has discharged its responsibilities.
The full terms of reference of the Committee can
be found on the Group’s website
www.graftonplc.com.
This report describes how the Committee has
fulfilled its responsibilities during the year under its
Terms of Reference and under the relevant
requirements of the UK Corporate Governance
Code (the Code).
The Committee is satisfied that its role and
authority include those matters envisaged by the
Code that should fall within its remit and that the
Board has delegated authority to the Committee to
address those tasks for which it has responsibility.
All members of the Committee are determined by
theBoard to be independent Non-Executive Directors
in accordance with provision 10 of the Code. In
accordance with the requirements of provision 24 of
the Code, the Board considers that I have recent and
relevant financial experience as required by the Code.
The biographical details on pages 72 and 73
demonstrate that collectively, the members of the
Committee have a wide range of financial, treasury,
taxation, commercial and business experience that
enables the Committee to act very effectively.
Meetings
The Committee met five times during the year and
attendance by each Committee member is set out
in the table on page 78.
Meetings are attended by the members of the
Committee and others who attend by invitation,
being principally the CEO, the CFO, the Group
Financial Controller, the Company Secretary and the
Group Internal Audit and Business Risk Director.
Other members of executive management and
third-party advisors may be invited to attend to
provide insight or expertise in relation to specific
matters. The Committee is supported by Ms.
Rebecca McAleavey, Deputy Company Secretary,
who acts as Secretary to the Committee.
The PwC Group Engagement Leader and other
representatives of the External Auditor are also
invited to attend Committee meetings to present
their reports on the interim results and full year
audit. They also present their proposed audit plan
to the Committee. The Committee also met
privately with the External Auditor without
executive management present. No significant
concerns were raised during these discussions.
The Chair of the Committee reports to the Board
onaregular basis on the work of the Audit and Risk
Committee and on its findings and recommendations.
Key areas of activity during 2025
A summary of the key activities of the Committee
during the year is set out below:
Financial reporting
The Committee reviewed the 2024 Final Results
Announcement, the 2024 Annual Report and the
2025Interim Results Announcement and concluded
that they each presented a fair, balanced and
understandable assessment of the position of
theGroup and its prospects. The Committee
recommended the 2024 Final Results Announcement,
the 2024 Annual Report and the 2025 Interim
Results Announcement to the Board for approval.
As part of these reviews, the Committee
considered significant accounting policies,
estimates and judgements. The Committee also
reviewed the reports of PwC following their audit
and interim review including their findings on key
areas of judgement and other areas of audit focus.
The Committee also considered the significant
management letter points on internal controls in
the Group’s individual businesses identified by
PwC during its audit process. The significant
issues in relation to the financial statements
considered by the Committee and how these were
addressed are set out on page 83.
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Strategic Report
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Sustainability Statement
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Corporate Governance
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Financial Statements
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Supplementary Information
The Committee also reviewed papers on the
Viability Statement and Going Concern including
assumptions and financial forecasts.
Risk management and internal control
The Board has delegated responsibility to the
Committee for monitoring the effectiveness of the
Group’s system of risk management and internal
control, which is set out in further detail in the
RiskManagement Report on pages 31 to 42.
TheCommittee reviewed the Group’s Risk
Management Process and the procedures
established for identifying, evaluating and
managing key risks, which included a review
ofthestatus of risk management performance
against the objectives set for the year.
The Group Risk Committee provides oversight of
the Risk Management process and the Corporate
Risk Register. This review includes identifying
risks, assessing their likelihood and impact and the
effectiveness and adequacy of measures, actions
and controls to mitigate these risks. The key risks
facing the Group are set out on pages 33 to 38.
The Committee also considered the risks
associated with increased levels of cyber crime
and the potential to disrupt trading including the
loss of data.
The Committee also reviewed the ongoing work
ofthe Group Internal Audit team in preparation
forthe internal control requirements in the 2024
UK Corporate Governance Code (the Code) which
will be effective from 2026.
Effectiveness of material controls
Provision 29 of the Code requires boards to review
and declare the effectiveness of risk management
and internal controls at the balance sheet date.
Grafton will disclose its compliance with Provision
29 in the 2026 Annual Report.
In 2024, the Group launched its Internal Controls
Programme. Working with Group Internal Audit,
management identified key controls from existing
financial reporting and IT control frameworks.
These controls were expanded to cover major
financial, IT, operational, reporting, and compliance
processes, and were aligned with the principal
and is satisfied that internal audit has the
appropriate resources to fulfil its responsibilities.
During the year the Committee also considered and
approved the programme of work to be undertaken
by the Group’s Internal Audit function in 2026.
An external review of the effectiveness of the
Internal Audit function was carried out by the
Institute of Internal Auditors during 2025 and the
results of this review were presented to the
Committee in January 2026. The findings of the
review were positive and a number of operational
and strategic recommendations made will be acted
upon. One of which is a change in direct reporting
line of the Group Internal Audit and Business
Director to the Chair of the Audit and Risk
Committee to align with best practice.
External auditor
The Committee reviewed the External Auditor’s
plan for the 2025 Audit of the Group and approved
the remuneration and terms of engagement of the
External Auditor. The Committee also considered
the quality and effectiveness of the external audit
process and the independence and objectivity of
the Auditor.
An internal review of the effectiveness of the 2024
Audit was carried out during the year, comprising a
feedback questionnaire from the Audit and Risk
Committee and from Group and business unit
management. The results of this review were
presented to the Committee in October 2025 and
were positive overall with a number of comments
and recommendations made to help inform plans
for the 2025 Audit.
In order to ensure the independence of the External
Auditor, the Committee received confirmation from
the Auditors that they are independent of the Group
under the requirements of the Irish Auditing and
Accounting Supervisory Authority’s Ethical
Standards for Auditors (Ireland). The Auditors
alsoconfirmed that they were not aware of any
relationships between the firm and the Group
orbetween the firm and persons in financial
reporting oversight roles in the Group that may
affect its independence. The Committee considered
risks facing the Group, which are set out in further
detail on pages 33 to 38.
In 2024 and 2025, Group Internal Audit tested key
controls across all Group functions and business
units to identify areas needing remediation and to
assist management in streamlining and classifying
controls into material and key.
In 2026, Group Internal Audit will test all material
controls, allowing management to address any
deficiencies for re-testing before the balance sheet
date. A sample of the supporting key controls will
also be tested, with full coverage of these to be
achieved over a three-year cycle.
For 2025, the Group is required to report under
Provision 29 of the 2018 Code. In the Board’s and
Audit and Risk Committee’s view, the ongoing
information they receive is sufficient to enable
them to review the effectiveness of the Group’s
system of internal control. The Directors confirm
that they have reviewed the effectiveness of the
risk management and internal control framework.
In particular, during the year the Board has
considered the significant risks affecting the
business and the way in which these risks are
managed, controlled and monitored.
Internal audit
During 2025, the Group Internal Audit and Business
Risk Director reported to the Chief Financial Officer
and also had direct access to the Chair of the Audit
and Risk Committee and its members. The
Committee met with the Group Internal Audit and
Business Risk Director on five occasions during the
year when he presented Internal Audit report findings
and recommendations and updated the Committee
on the actions taken to implement recommendations.
The Committee also met with the Group Internal
Audit and Business Risk Director without executive
management present. No significant concerns
were raised during these discussions.
The scope, authority and responsibility of the
Internal Audit function is set out in the Internal
Audit Charter which has been approved by the
Committee. The Audit and Risk Committee is
responsible for approving the internal audit budget
and was satisfied that the relationships between
the Auditor and the Group including those relating
to the provision of non-audit services did not
impair the Auditors’ judgement or independence.
PwC was appointed Auditor to Grafton with effect
from 1 January 2016. In accordance with PwC’s
independence criteria, the Group Engagement
Leader is subject to a five-year rotation policy. Ms.
Siobhán Collier has served as Group Engagement
Leader since 2021, and will step down following
the conclusion of the audit of the Financial
Statements for 2025. I would like to thank Ms.
Siobhán Collier for her service over the past five
years. Mr. Paul Barrie will succeed Ms. Collier and
on behalf of the Committee I would like to
welcome Mr. Barrie to the role.
External audit tender
A formal tender process was carried out during
2025 for the external audit of the Group’s financial
statements for the year ended 31 December 2026
and subsequent years. The Committee undertook
the process between May and October 2025. The
process was conducted in accordance with
relevant regulatory standards.
Following an initial screening process by the
Committee of a range of potential contenders,
aninvitation to tender document was issued in
May 2025 to two audit firms which the Committee
believed have the appropriate international
expertise, experience and network to perform the
audit of the Group. Each of the firms was given
access to a data room and meetings were
arranged with the Board, Group and business
unitmanagement prior to the firms submitting
their written tender proposals.
The Committee evaluated the audit tender
documents using a prescribed criteria and oral
presentations were made by each of the firms
invited to tender. Following the conclusion of this
process, on the recommendation of the Committee,
the Board approved the reappointment of PwC as
auditors to the Group subject to shareholder
approval, for a further maximum ten years.
Audit and Risk Committee Report continued
82
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Strategic Report
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Sustainability Statement
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Corporate Governance
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Financial Statements
191-198
Supplementary Information
Non-audit services
The External Auditor is permitted to undertake
non-audit services that do not conflict with auditor
independence, provided the provision of the
services does not impair the Auditors’ objectivity
orconflict with their role as Auditor and subject
tohaving the required skills and competence
toprovide the services.
The Committee has approved a policy on the provision
by the External Auditor of non-audit services. Under
this policy the External Auditor will not be engaged
forany non-audit services without the approval of
theAudit and Risk Committee. The External Auditor
isprecluded from providing certain services, or
fromproviding any non-audit services that have
thepotential to compromise its independence
orjudgement. With the exception of fees incurred
inacquired businesses, fees for non-audit services
inany financial year are targeted not to represent
morethan 20% of the audit fee.
The Committee monitors and reviews the nature
ofnon-audit services provided by the External
Auditors. The Committee approved the provision
of non-audit services by the Auditor during the
year, which primarily relate to a review of the
Group’s condensed consolidated half year financial
statements, with associated fees disclosed in Note
3 to the financial statements.
Whistleblowing and fraud
The Group Anti-Fraud and Theft Policy sets out
theGroup’s approach to all forms of fraud and theft,
the responsibilities of business unit management in
relation to prevention and detection procedures and
controls, the appropriate reporting channels and the
possible actions which may be taken by the Group
in response to suspected fraud or theft. Instances
of fraud or theft over a specified threshold are
reported to and monitored by the Committee.
The Committee periodically considers reports
received on matters raised through SpeakUp, the
independent Group-wide confidential reporting
service which allows colleagues to report,
anonymously if they wish, any concerns they may
have regarding certain practices or conduct in their
businesses including possible instances of fraud
and theft. All concerns raised through this channel
and the outcomes of investigations are reported to
the Committee. The Committee was satisfied that
the procedures in place to allow colleagues to raise
matters in a confidential matter operated
effectively during the year.
Anti-bribery and corruption
The Group’s Code of Business Conduct and Ethics
sets out the ethical standards to which all Group
employees are expected to adhere. The Code
andthe Group Anti-Bribery and Corruption Policy
set out the core standards and procedures to
beobserved and provides practical guidance
ondealing with bribery risk. All colleagues are
required to complete an annual declaration
ofindependence to confirm whether they have
anyknown conflicts of interest, as defined in
thepolicy. Any declared interests are reviewed
bymanagement and HR, with actions to manage
or remove conflicts agreed with the colleague.
Estimates and judgements
The Committee reviewed in detail the following
areas of significant judgement, complexity
andestimation in connection with the financial
statements for 2025. The Committee considered
areport from the external auditors on the audit
work undertaken and conclusions reached as
setout in their audit report on pages 116 to 125.
The Committee also had an in-depth discussion
onthese matters with the External Auditor.
Valuation of goodwill
Management carried out its annual goodwill
impairment analysis at 31 December 2025
andaninterim goodwill impairment analysis
at30 September 2025, immediately prior to the
Group reorganising its operating segments. The
Committee considered both goodwill impairment
analyses carried out by management based
onvalue-in-use which involved comparing the
recoverable amount and carrying amount of the
cash generating units (CGUs). The Committee
agreed with the conclusion reached by
management that no impairment charge
shouldberecognised in the year.
The review involved discounting the forecasted
cash flows of each group of CGUs based on the
Group’s pre-tax weighted average cost of capital
Audit and Risk Committee Report continued
adjusted to reflect issues associated with each
group of CGUs and carrying out sensitivity analysis
on the key assumptions used in the calculations
including cash flow forecasts (revenue growth),
terminal growth rate and pre-tax discount rate.
The Committee noted the overall level of
headroom in the value-in-use models prepared
bymanagement and considered the impact
ontheheadroom of sensitivity analysis on the key
assumptions used in the models. The Committee
also compared the year-end market capitalisation
of the Group to its net asset position and noted
that it was higher than the net asset value.
At 30 September the former UK Distribution group
ofCGUs recoverable amount had limited headroom
over its carrying amount and was therefore more
sensitive to possible changes in key assumptions.
The Committee reviewed the assumptions made
bymanagement in the value-in-use model for that
group of CGUs and deemed them to be appropriate.
Given the sensitivity of the headroom for the former
UK Distribution CGU to possible changes in key
assumptions, the Committee reviewed the sensitivity
analysis in detail and agreed that disclosure should
be provided in the financial statements.
The Committee agreed that no reasonably possible
change in any of the key assumptions in the
30 September 2025 model for the other former
groups of CGUs would cause their carrying amounts
to exceed their recoverable amounts at that date. The
Committee also agreed that no reasonably possible
change in any of the key assumptions in the
31 December 2025 model for the current groups
ofCGUs would cause their carrying amounts to
exceed their recoverable amounts.
Completeness and accuracy of rebate
income and valuation of rebate receivables
Supplier rebates represent a significant source of
income in the distribution industry and is an area of
risk due to the materiality of rebate arrangements,
the use of manual calculations, and the estimation
involved in determining the year-end receivable
amounts. The Committee reviewed the basis used
by management for calculating rebate income for
the year and rebates receivable at the year end and
was satisfied that the accounting treatment
adopted was appropriate and that rebates
receivable at the year end were recoverable.
In reaching its conclusion, the Committee reviewed
information and reports prepared by the Group
Internal Audit function which completed reviews
during theyear across a sample of significant
business units with the primary objective of
providing independent assurance on the accuracy
of rebate receivable balances.
These reviews included reperforming calculations on
a sample of rebate income for 2025 with reference to
agreements with individual suppliers and reports of
purchases made from suppliers. The Committee
also considered the value of rebates received after
the year end relating to 2025 and the value of rebates
received during 2025 relating to 2024.
Valuation of inventory
The Group carries significant levels of inventory
and key judgements are made by management in
estimating the level of provisioning required for
slow moving inventory. In arriving at its conclusion
that the level of inventory provisioning was
appropriate, the Committee received half year and
full year updates from management on stock
ageing and provisioning across the Group.
The Committee reviewed the basis for calculating
the valuation of rebate attributable to inventory
andwas satisfied that inventory was appropriately
valued and that the Group continued to adopt
aprudent approach to inventory provisioning.
As Chair of the Committee, I engaged with
theGroup CFO, the Group Internal Audit and
BusinessRisk Director and the PwC Group Audit
Engagement Leader independently of each other
inpreparation for Committee meetings and
periodically as appropriate.
I will be in attendance at the 2026 Annual General
Meeting and will respond to any questions that
shareholders may have concerning the activities
ofthe Committee.
Mark Robson
Chair of the Audit and Risk Committee
4 March 2026
83
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Nomination Committee Report
Nomination Committee
Dear Shareholder,
I am pleased to present the report of the
Nomination Committee for the year ended
31 December 2025.
Ian Tyler, Chair of the Nomination Committee
Membership Length of service*
Ian Tyler (Chair)
2.0 years
Rosheen McGuckian
5.8 years
Avis Darzins
3.5 years
Mark Robson
2.2 years
David Dillon
0.7
years
Andrea Gisle Joosen
0.7
years
* Committee membership as of 4 March 2026.
Key duties of the Committee
Succession
• Identifying, and nominating for the approval of
the Board, candidates for appointment as
Directors and ensuring that there is a formal,
rigorous and transparent procedure for the
appointment of new Directors to the Board;
• Considering the reappointment of Non-Executive
Directors at the conclusion of their specified term
of office and making recommendations to the
Board; and
• Conducting an annual review of succession
plansfor senior executives across the Group.
Board structure
• Regularly reviewing the structure, size,
composition and length of service on the Board
and assessing the skills, expertise, knowledge,
experience and diversity required by the Board
and its Committees and the Group’s senior
management team.
Diversity
• Ensuring the diversity policy is linked to Group
strategy; and
• Prioritising the appointment of women to
leadership positions.
Evaluation
• Evaluating the balance of skills, knowledge,
experience and diversity of the Board and Board
Committees and making recommendations to
the Board on any changes.
The full terms of reference of the Committee can
be found on the Group’s website
www.graftonplc.com.
Activities of the Committee
during 2025
Introduction
In line with its key duties as set out above, the
Committee considered the composition of the
Board and its Committees to ensure that it
continues to have the necessary skills, expertise,
knowledge and diversity at Board and senior
management level and it continued to seek to
balance the need to refresh the Board while
maintaining a team of knowledgeable and
experienced Non-Executive Directors.
Board and Committee changes in 2025
As indicated in the 2024 Committee Report, Mrs.
Susan Murray and Mr. Vincent Crowley stepped
down during 2025 as part of the Board’s normal
board refreshment process. On behalf of the
Committee and the Board, I would like to
sincerelythank both Susan and Vincent for
theirvery valuable contributions during their
timeon the Board.
Following a thorough search process assisted by
Russell Reynolds, we were delighted to appoint
David Dillon as a Non-Executive Director in May
2025. David has a very distinguished track record
in international business with a strong focus on
value creation and he brings extensive strategic,
financial and leadership skills and highly relevant
sector experience to the role.
In July 2025, the Board, on the recommendation
ofthe Committee, was very pleased to appoint
Andrea Gisle Joosen as a Non-Executive Director.
Andrea is a highly experienced Director who brings
deep understanding of international business
which is of considerable value to the Board.
Andreawas appointed Chair of the Remuneration
Committee of the Company in October 2025.
The Board was also very pleased to appoint
Ms.Rosheen McGuckian as Senior Independent
Director with effect from 21 October 2025, taking
into account her considerable skills and experience
as a Non-Executive Director and her knowledge
ofthe Group over her six years on the Board.
Independence of the Board
To ensure that the independence of the Non-
Executive Directors is maintained, the Committee
keeps the tenure of the Board as a whole under
review. The tenure of Non-Executive Directors
(including the Chair) on the Board at 31 December
2025 is set out below. The tenure of members of
each of the Committees is dealt with in the
relevant Committee reports.
Length of service
onBoard
Number of
Non‑ExecutiveDirectors
(as at 31 December 2025)
0-1 years 2
1-2 years 1
2-3 years 1
3-4 years 1
5-6 years 1
The Committee also reviewed the time required to
fulfil the roles of Board Chair, Senior Independent
Director, Committee Chairs and Non-Executive
Director roles and was satisfied that all members
of the Board continue to devote appropriate time
totheir duties and to be effective in their roles.
Election/re-election of Directors
Having considered their individual performances,
contributions to the Board, time devoted to their
roles and other commitments, the Committee
agreed to make a recommendation to the Board
that all Directors should go forward for re-election
at the 2026 Annual General Meeting (AGM) of the
Company.
Board effectiveness and evaluation
The Board conducts an annual evaluation of its
own performance and that of its committees and
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Financial Statements
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Supplementary Information
The process undertaken by the Committee in
relation to director succession is set out below:
Existing time commitments should be sufficiently
clear to accommodate the role and to avoid an
actual or perceived risk of over-boarding as
defined by the shareholder advisory firms and the
more stringent requirements of certain institutional
shareholders. In accordance with the Code,
Directors must seek the prior approval of the Board
in advance of accepting any additional external
roles following appointment to the Board. The role
specification also makes it clear that any actual or
perceived conflicts of interest should be avoided.
The Committee also makes recommendations to
the Board concerning the reappointment of
Non-Executive Directors at the conclusion of their
three-year term and the re-election of Directors
atthe Annual General Meeting each year.
Appointments to the Board are for a three-year
period, subject to shareholder approval at each AGM
and subject to an annual performance evaluation
that is conducted by the Chair of the Board.
Senior management succession
In addition to its work on Board succession, the
Committee also considers the leadership needs
ofthe Group and succession planning for senior
management roles including the Chief Executive
Officer and Chief Financial Officer. The Committee
also reviews succession planning below Board
level including the pool of talent currently available
to succeed in senior roles and the progress made
recruiting and developing the next generation of
leaders in the Group and its businesses.
The Chief Executive Officer and Group HR Director
presented the annual talent and succession plan
for management to the Board during the year. This
covered the Group’s talent strategy and an
assessment of the potential of high-performing
individuals. As part of this review, the Committee
considered the importance of developing a diverse
talent pipeline and the current and future skill sets
required to help the Group implement its strategy.
Initiatives for high-potential talent to broaden their
skill sets and prepare them for future senior roles
include participation in leadership and business
school training.
Equality, equity, diversity and inclusion
The Board and the Committee are committed to
ensuring that the Board is sufficiently diverse and
appropriately balanced. The Committee monitors
the balance of the Board to ensure that it has
theexpertise to lead the Group as it develops
andevolves.
The Board recognises the benefits of diversity at
board and senior management level and across
the wider workforce. The Group Equality, Equity,
Diversity and Inclusion Policy, which is available on
the Group website, sets out the Board’s approach
to diversity in its broadest sense having regard to
experience, age, gender, religious beliefs, sexual
orientation, race, ethnicity, disability, nationality,
background and culture.
In the context of normal refreshment, the Board’s
objective is to maintain an appropriate balance
ofgender and ethnicity on the Board. While the
Board will always seek to appoint the most
talented and skilled candidates on merit against
objective criteria, greater diversity is actively
considered when making Board appointments.
The composition of the Board has evolved
considerably over recent years and the Committee
has taken an active role in improving the gender
balance and ethnic diversity of the Board.
The Board is mindful of the targets set by the
FTSEWomen Leaders Review in relation to gender
diversity and the Parker Review in relation to ethnic
diversity. As at 31 December 2025, three of our
eight directors were female (38%) and the Senior
Independent Director was female. OneDirector was
from an ethnically diverse background as defined by
the Parker Review. On the recommendation of the
Committee, the Board has agreed that diversity will
continue to be given very careful consideration in
shortlisting candidates for appointment to the
Board in the future.
The Group also considers diversity in the widest
sense when making appointments at all levels in
its business and, by setting the tone from the top,
Nomination Committee Report continued
individual Directors in accordance with the UK
Corporate Governance Code (the Code).
In 2025, the evaluation was conducted internally,
an external evaluation having been facilitated by
Gould Consulting in 2024.
The evaluation found that the Board and its
Committees are operating effectively and to a high
standard of governance and in compliance with
best practice. Recommendations from the review
will be addressed during the course of 2026.
Director succession
The Board and the Committee are committed
toensuring that the Board is sufficiently diverse
and appropriately balanced. The Committee
monitors the balance of the Board to ensure
thatit has the expertise to lead the Group as it
develops and evolves.
Director succession process
1
Background
The Committee makes recommendations to the Board concerning
the appointment of Executive and Non-Executive Directors, having
considered the blend of skills, experience, track record and
diversity deemed appropriate for the role. Appointments also
reflect the international nature of the Group and the opportunities
and challenges it is likely to encounter in the future.
2
Defining
the role
A detailed role specification is developed which identifies the key
skills, experience and personal attributes required to create a
diverse Board that will drive the future success of the Group.
Therole specification also addresses the time commitment
andthe Board’s requirements regarding conflicts of interest.
3
Candidate
selection
The Committee undertakes a formal, rigorous and transparent
procedure when nominating suitable candidates for appointment
to the Board. Independent search firms, that have no other
connection with the Group, are used to identify candidates that
match the role specification developed by the Committee
Candidates are identified and selected on merit against objective
criteria and with due regard to the benefits of Board diversity.
4
Appointment
Appointments are approved by the Board on the recommendation
of the Committee. The terms and conditions of appointment of
Non-Executive Directors and the Chair are set out in formal letters
of appointment, which also set out the Board’s expectations in
relation to time commitment and conflicts of interest.
5
Induction
A tailored induction programme is developed for newly appointed
Directors which typically involves briefings and meetings with
executive and business unit leadership and, where appropriate,
external advisors. Site visits to trading businesses and
introductions to major stakeholders may also form part of the
induction, fostering a practical appreciation of the Group’s
operations, culture and strategic priorities.
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Financial Statements
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Supplementary Information
promotes a culture where there are no barriers to everyone achieving their potential and succeeding at
the highest levels in Grafton.
We are committed to increasing representation of females in senior leadership positions across the Group.
The Group has introduced initiatives to provide career development opportunities for female colleagues
including participation in management development programmes, mentoring, coaching andflexible work
arrangements.
In line with UKLR 6.6.6 R (10), as at the reference date of 31 December 2025, the composition of the
Board and Executive Management was as follows:
Sex/gender representation
Number of
boardmembers
Percentage
oftheboard
Number of senior
positions on the
board (CE0, CFO,
SIDand Chair)
Number in
executive
management
Percentage
ofexecutive
management
Men 5 62% 3 3 60%
Women 3 38% 1 2 40%
Not specified/
prefer not to say – – – – –
Ethnicity representation
Number of
boardmembers
Percentage
oftheboard
Number of senior
positions on the
board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage
ofexecutive
management
White British or other White
(including minority-white
groups) 7 87.5% 4 29 100%
Mixed/multiple
EthnicGroups 1 12.5% – – –
Asian/Asian British – – – – –
Black/African/Caribbean/
BlackBritish – – – – –
Other ethnic group, including
Arab – – – – –
Not specified/prefernot to
say – – – – –
The year ahead
Grafton has a strong Board with the appropriate range of skills, experience, backgrounds and diversity to
drive its success and with the capacity to support the future growth and development of the Group.
Ian Tyler
Chair of the Nomination Committee
4 March 2026
Nomination Committee Report continued
Remuneration Committee
Dear Shareholder,
I am pleased to present my report as Chair of
theRemuneration Committee for the year ended
31 December 2025.
Andrea Gisle Joosen, Chair of the Remuneration Committee
Membership Length of service*
Andrea Gisle Joosen (Chair)
0.7
years
Rosheen McGuckian
5.8 years
Avis Darzins
3.5 years
Mark Robson
2.2 years
David Dillon
0.7
years
* Committee membership as of 4 March 2026.
Key duties of the Committee
• Determining the policy for Executive Director
remuneration and for setting remuneration for
the Chair, Executive Directors and senior
management (being the Group Management
Team (GMT) and specified individuals as agreed
from time to time by the Committee);
• Reviewing workforce remuneration and related
policies and the alignment of incentives and
rewards with culture; and
• Reviewing the ongoing appropriateness and
relevance of the remuneration policy.
Although not required under the Irish Companies
Act 2014, the Remuneration Committee has
continued to prepare the Remuneration Report in
accordance with the UK regulations governing the
disclosure and approval of remuneration of the
Directors. The report also complies with the
European Union (Shareholders’ Rights)
Regulations2020.
The Committee was appreciative of the high level
ofshareholder approval for the 2024 Annual Report
on Remuneration which was supported by 99.4%
ofvotes lodged by proxy ahead of the 2025 AGM.
The current Directors’ Remuneration Policy
became effective following shareholder approval
at the 2023 Annual General Meeting (AGM) and
this report details how the Policy was applied in
2025. In line with regulatory requirements, a
renewed policy will be put to shareholders at the
forthcoming AGM of the Company and further
details of changes proposed to the current policy
are set out on the following pages along with
details of how the new policy will be implemented
in 2026.
Our approach to remuneration
The Committee’s overall remuneration philosophy
has not changed over the year and remains to
ensure that Executive Directors are incentivised to
successfully implement the Board’s strategy and
that remuneration is aligned with the interests of
shareholders and other stakeholders over the
longer term.
The Committee seeks to achieve this by:
• Rewarding Executive Directors fairly and
competitively for the delivery of strong
performance;
• Taking into account the need to attract, retain
and motivate executives of high calibre and to
ensure that Executive Directors are provided with
an appropriate mix of short-term and long-term
incentives;
• Taking a range of factors into account including
market practice, the changing nature of the
business and markets in which it operates, the
performance of the Group, the experience,
responsibility and performance of the individual
directors concerned and remuneration practices
elsewhere in the Group; and
• Setting targets that are stretching with full payout
of awards requiring exceptional performance.
Performance for 2025
Grafton delivered a resilient performance in 2025
reflecting the strength of its diversified
geographies, its focus on margin management,
and its continued investment in strengthening its
market positions, despite weak trading conditions
outside the Island of Ireland and Iberia. Trading
activity reflected a softening of momentum in the
second half in several markets, partially offset by
tight control of costs and the benefit of self-help
actions in all geographies.
The Group’s gross margin increased by 50 basis
points during 2025, driven by a strong focus on
margin management across all businesses.
Theincrease in overheads across the Group
in2025 was partially mitigated by productivity
improvements, streamlining processes, and
implementing efficiency initiatives.
Adjusted operating profit increased by 7.1% to
£190.2m (2024: £177.5m) and adjusted earnings
per share increased by 5.1% to 75.4 pence
(2024: 71.8 pence).
Remuneration for 2025
Base Salary
The Committee approved a salary increase of 3.5%
with effect from 1 January 2025 for the Chief
Executive Officer and Chief Financial Officer.
Whenreviewing salary levels, the Committee
considered the level of increases implemented
across the Group, the performance of the Group,
the Chief Executive Officer and the Chief Financial
Officer and market data. The salary increase was
materially lower than average awards of 4.65%
tocolleagues across the Group.
Annual bonus
The annual bonus for 2025 was based on two
financial performance targets being adjusted
operating profit (70%) and free cash flow
conversion (30%).
A bonus of 98.4% of basic salary, out of a potential
bonus opportunity of 150% of salary, wasawarded
to the Chief Executive Officer and the Chief
Financial Officer. These bonuses represent 65.6%
of the maximum potential opportunity. Further
detail is set out on page 103. The Committee
agreed that the bonus outcome was reflective of
the underlying financial performance of the Group
for the year and was appropriate in the context of
the experience of shareholders and other
stakeholders during the year. Therefore, no
discretion was applied.
Remuneration Committee Report
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Corporate Governance
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Financial Statements
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Supplementary Information
Vesting of LTIP awards made in 2023
The performance conditions for Long Term
Incentive Plan (LTIP) awards granted in March
2023 that covered the performance period of the
three years ending on 31 December 2025, were
based 50% on growth inAdjusted Earnings per
Share (adjusted EPS) and50% on Total
Shareholder Return (TSR) performance versus a
comparator group consisting of the members of
the London StockExchange’s FTSE 250 Index
excluding investment trusts.
As the Group’s TSR was ranked between median
and 80th percentile, 60.2% of this half of the award
will vest. The other half of the LTIP award was
based on the Group’s adjusted EPS for the financial
year ended 31 December 2025 being in the target
range of 89.7 pence to 101.6 pence. In line with the
approach determined by the Committee, the
Adjusted EPS outcome was calculated based on
the number of shares in issue as at the end of
31 December 2022. On this basis, adjusted EPS for
2025 was 63.7 pence excluding property profit. As
this was below the threshold of 89.7 pence, this
half of the award will not vest.
Based on the foregoing, 30.1% of the total awards
granted in 2023 to the Chief Executive Officer and
Chief Financial Officer will vest in April 2026.
The Committee agreed that the vesting outcome
was reflective of the underlying financial
performance of the business and was appropriate
in the context of the experience of shareholders
and other stakeholders over the three-year vesting
period. Therefore, no discretion was applied.
Proposed remuneration policy changes
in 2026
The current Remuneration policy was approved
atthe 2023 AGM and, although not required under
company law in Ireland, will be subject to a
non-binding shareholder resolution at the 2026
AGM which is consistent with regulations in the
UK. The new policy will apply for a three-year
period and provide a framework for setting the
remuneration of Executive and Non-Executive
Directors and the Group’s senior management.
We have undertaken a comprehensive review of our
Policy to ensure that it fully incentivises
management to focus on the delivery of Grafton’s
strategic growth initiatives to deliver long-term
sustainable returns for our shareholders, while
ensuring it remains appropriately aligned with the
Group’s current scale, operational complexity, and
future ambitions.
Context to the policy review – business
and strategy
During the last policy period, Grafton delivered
resilient business performance in a challenging
market environment, outperforming national and
international building materials distribution peers.
We continued our focus on returning value to
shareholders, returning cash of £428.3m through
share buybacks completed between 9 May 2022
and 7 November 2025, representing 20.5% of the
shares in issue when the first buyback programme
commenced.
We remained committed to strengthening and
growing our existing businesses across our
geographically diverse portfolio, using organic
growth strategies and targeted acquisitions. The
recent bolt-on acquisition of HSS Hire Ireland
complements our service offering within the
Chadwicks business in the Island of Ireland
segment. In October 2024 we entered Spain’s
highly fragmented distribution market through the
platform acquisition of Salvador Escoda, the
specialist distributor of air conditioning, ventilation,
heating, refrigeration and renewable products.
Looking ahead, our focus is on continuing to
strengthen our existing positions in our core
markets through organic growth and bolt-on
acquisitions. We also plan to accelerate our
expansion efforts in the highly attractive
fragmented distribution market in Iberia to
continue to grow the Group and deliver value
forshareholders.
Within this context, the following approach has
been established. The proposed changes under
the new policy are outlined below and are also
summarised in the table on page 91.
Structure
The Committee considered in detail the approach
to the current policy, with particular attention to the
structure of the Annual Bonus Scheme and LTIP to
ensure they remain effective and aligned with the
Group’s strategic ambitions and challenging
market conditions.
The Committee is confident that the current
structure of the variable remuneration remains
suitable for Grafton. We believe that the
combination of the annual bonus and a
performance-based long-term incentive plan
ismost effective approach to motivate executives
and promote retention among senior leadership,
thereby supporting the delivery of our strategy
overthe long term and value creation for
ourshareholders.
The Committee is satisfied that the existing
remuneration framework aligns with recognised
best practice principles. Annual bonuses are
subject to deferral, and the LTIP has a three-year
performance period followed by a two-year holding
period post-vesting. The current policy also
includes minimum shareholding guidelines
applicable both during employment and after
termination of employment.
Incentive opportunity
Under the new policy, the Committee proposes
moderate increases to the maximum award
opportunities for the Annual Bonus Scheme and
the LTIP. The maximum bonus opportunity under
the policy will increase from 150% of salary to
180% of salary. The maximum LTIP award
opportunity under the policy will increase from
200% to 250% of salary.
The primary increase in quantum is within the LTIP.
The increased potential LTIP award is designed to
motivate executives to achieve stretching targets
while ensuring strong alignment with shareholder
outcomes over the longer term. With the first
awards under the new Policy being in 2026, which
are subject to a three-year performance period and
two-year holding period, Executive Directors will
not realise the potential benefit of this award until
2031.
The approach to performance condition target
setting for LTIP awards has been revised to reflect
the higher award opportunity. Performance
condition maximum targets reflect a higher
levelofstretch than the award made in 2025.
Thisapproach ensures that any additional
compensation is directly linked to delivery
offinancial and shareholder returns
outperformance, demonstrating our commitment
to robust pay-for-performance principles.
Threshold and target performance condition
targets will continue to be set to be appropriately
stretching levels to incentivise the delivery of core
business performance. This approach takes into
account ongoing market uncertainty and aims to
ensure management remains motivated with
achievable goals even in challenging
environments.
Although not the primary factor influencing the
increases to maximum award opportunities, the
Committee also assessed the positioning of the
current total compensation for the CEO and CFO
against relevant peer groups to ensure that
itremained appropriate. The Committee
considered market practice from a range
ofperspectives including:
Remuneration Committee Report continued
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Corporate Governance
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Financial Statements
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Supplementary Information
• Market capitalisation: This peer group
comprised companies ranked above and below
Grafton based on market capitalisation,
predominantly consisting of FTSE 250
constituents. Financial services companies were
excluded to ensure comparability.
• Adjusted market capitalisation: Grafton is more
international and operationally complex than
some other companies with a similar market
capitalisation, with a significant workforce across
multiple regions and revenue that sits towards
the upper quartile of the market capitalisation
peer group. To reflect this additional complexity,
the Committee considered an adjusted market
capitalisation group which excluded companies
with significantly lower colleague numbers and/
or revenue.
• Revenue: Companies with revenue similar to
Grafton. The peer group comprised companies
ranked above and below Grafton based on this
revenue metric, including FTSE 100 and 250
companies. Financial services companies
wereexcluded.
The Committee considered that this was a
balanced and fair approach to benchmarking.
Compared against these groupings, the
Committee determined that the overall maximum
total compensation as a percentage of salary,
particularly for the CEO, was generally towards the
lower end of the market competitive range.
Following the proposed increases, the total
compensation opportunity remains within the
market competitive range, positioned slightly
above the median. Taking into account the
proposed increase in stretch for the LTIP
performance targets the Committee considers
thispositioning to be appropriate.
The modest increase to the annual bonus
maximum for the CEO will also ensure that his
annual bonus is fairly positioned compared with
peers and that he is appropriately incentivised to
deliver consistent annual performance and
strategic milestones which support the long-term
creation of shareholder value.
Annual bonus deferral
Under the current policy an Executive Director is
required to apply 30% of any annual bonus earned
after statutory deductions for the purchase of shares
in the Group. The shares are then required to be held
for two years. The bonus deferral policy will be
amended so that once an Executive Director has met
the established minimum shareholding guidelines,
the obligation to defer a portion of their annual bonus
into company shares will no longer apply. The
Committee believes that executives who have met
the shareholding guidelines are already closely
aligned with shareholder interests, making further
mandatory deferral unnecessary.
Malus and clawback
Under the new policy, the malus and clawback
period will be reduced from six years to three years
following the annual bonus payment or LTIP
vesting. The current six-year duration surpasses
prevailing market standards, which generally fall
between two and three years from payment or
vesting. Adopting a three-year timeframe aligns
with accepted market practices and, in the
Committee’s view, provides sufficient time
toidentify any trigger events.
Dividend equivalents
Dividend equivalents will apply for LTIP awards to
the extent that they may vest. Under the current
policy, participants do not receive dividend
equivalents on vested awards, which deviates from
typical market practice.
Summary
The approach detailed above is designed to
effectively support the retention and sustained
motivation of our Executive Directors and senior
leaders during a crucial phase of the Group’s
development and growth. The Committee is
confident that the new policy provides a balanced
framework, aligning pay with performance so that
higher payouts are attainted only for exceptional
achievements that exceed more stretching
performance targets than previously applied.
The proposed increases to incentive opportunities
are proportionate to companies of similar size
andcomplexity and are accompanied by
commensurately higher performance expectations
to ensure robust pay-for-performance alignment.
The additional policy adjustments outlined above
will ensure that the overall package aligns with
prevailing market practices, current governance
standards, and anticipated future development.
This comprehensive approach ensures the
ongoing effectiveness and relevance of the
newPolicy.
Taking into account the above, the Committee
believes that the proposed quantum increases
represent a reasonable and balanced approach
and are essential to retain top executive talent,
align executive reward with market best practice,
motivate high performance, and ultimately serve
the long-term interests of our shareholders.
Remuneration for 2026
Salary
The Committee approved a salary increase of 3.0%
with effect from 1 January 2026 for the Chief
Executive Officer and the Chief Financial Officer
which was lower than the average awards of 3.6%
to colleagues in Ireland and the UK.
Pension
The rate of pension contribution is maintained at
9.0% of base salary and is aligned with the rate
available to the majority of the UK workforce.
Annual Bonus Scheme
As outlined above, the maximum annual bonus
opportunity for the CEO in 2026 will be 180% of
salary and150% of salary for the CFO. In line with
the approach in 2025, the 2026 Annual Bonus will
bebased on adjusted operating profit before
property profit (70%) and freecash flow
conversion (30%).
Long Term Incentive Plan
LTIP awards for 2026 will be made at 250% of
salary to the CEO and 220% of salary for the CFO.
Awards will be based on four performance
measures: Adjusted EPS pre-property profit for
2028 (35%); TSR relative to the FTSE 250
(excluding investment trusts, financial services,
resources and energy) (25%); Average ROCE over
the three years of the performance period (35%);
and Scope 1 & 2 Greenhouse Gas (GHG) emissions
reduction (5%).
We propose minor re-weightings of the
performance measures from the 2025 award.
Adjusted EPS pre-property profit and average
ROCE will increase from 30% to 35%. Relative TSR
will reduce from 30% to 25%.
The ESG measure has been refined to focus
specifically on carbon reduction (with diversity,
equity and inclusion measures removed) with a 5%
weighting. This maintains a clear focus on
externally verifiable and measurable objectives,
reflecting a preference for robust, quantifiable
targets over those, which were deemed more
volatile and challenging to consistently measure
within this framework. We will continue to focus on
DEI initiatives and targets across the Group
including external reporting under the FTSE
Women Leaders Review and Parker Review.
Given the inherent challenges in identifying a
suitably comparable peer group for TSR due to
Grafton’s unique cyclical environment and external
market forces, the TSR peer group has been
refined to exclude companies in investment trusts,
financial services, resources and energy sectors.
The Committee has set a target range for adjusted
EPS before property profit for 2028 of between
81.14p at threshold, 88.36p at target and 98.65p at
maximum. Performance will be assessed on
adjusted EPS for the final year of the performance
period, including the impact of acquisitions and
share buybacks.
Remuneration Committee Report continued
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Corporate Governance
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Financial Statements
191-198
Supplementary Information
The Committee believes that this range is aligned
with delivery of the Group’s strategic and financial
objectives and represents an appropriately
stretching target. 25% of the award will vest if the
lower end of the adjusted EPS target range of
81.14p is achieved. Where adjusted EPS is between
the threshold and target point in the range,
between 25% and 50% of this part of the award will
vest on a straight-line basis. Between the target
and the maximum target in the range, between
50% and 100% of this part of the award will vest on
a straight-line basis. The target adjusted EPS range
for 2028 is equivalent to annual compound growth
of 4.0% at threshold, 7.0% at target, and 11.0% at
maximum applied to the 2025 base year adjusted
EPS excluding property profit and using an
underlying 19.5% tax rate which excludes a credit
relating to updated estimates of amounts relating
to prior years of 72.13p.
The TSR performance condition will continue to be
measured against a comparator group consisting
of the constituents of the London Stock
Exchange’s FTSE 250 Index, excluding investment
trusts, financial services, resources and energy
sectors. In line with previous years, median
performance against the peer group will result in
threshold payout with performance above the 80
th
percentile resulting in full payout.
The Committee has set a target range of 10.0% to
11.5% for the three-year period from 2026 to 2028
for Average ROCE. The calculation of ROCE will
follow that shown in the Alternative Performance
Measures on page 192 which uses the opening
and closing year-end balance sheets in the
calculation of average capital employed.
The GHG emissions target will be aligned with the
SBTi linear pathway to a 48.5% reduction by 2030,
measured against a 2021 baseline. The target will
be to reduce Scope 1 & 2 GHG emissions by
45.24% by 31 December 2028 against the 2021
base year. The target has been adjusted to be
appropriately stretching taking into account the
progress made against the 2021 baseline at
31 December 2025.
Under the Group’s Science Based Targets Initiative
Recalculation Policy, it may be necessary to
recalculate and restate the base year following
significant structural changes in the Group.
TheCommittee will consider the impact of any
such recalculation when assessing the outcome
ofthis performance condition.
Colleague engagement
The Remuneration Committee reviewed workforce
remuneration including base pay, benefits and
incentives and this was also taken into
consideration in deciding the pay of executive
directors and senior management.
Members of the Committee attended Colleague
Forums during the year in the UK and Ireland.
These forums, made up of colleagues from each
of our businesses, provided the opportunity for our
people to engage with Non-Executive Directors
and to have their views heard at Board level.
Shareholder engagement
The Committee is committed to ongoing dialogue
with shareholders and institutional advisory bodies
on remuneration matters and it welcomes
feedback as it helps to inform its decisions. The
Committee takes an active interest in voting on
Annual General Meeting resolutions on
remuneration matters and is pleased with the high
level of support received historically for its Annual
Reports on Remuneration and for the three-yearly
renewal of the Remuneration Policy.
The Committee has actively engaged with major
shareholders and investor bodies concerning the
proposed changes to the Remuneration Policy.
Feedback received during consultations with major
shareholders was generally favourable and
contributed to refining the final proposals.
I am confident that the proposed policy is aligned
with shareholders’ interests and will continue to
support the delivery of the Group’s strategy and
the creation of long-term sustainable value for
shareholders. I hope that we can rely on your
continued support at this year’s AGM.
I am available to respond to any questions that
shareholders have about the Remuneration Policy,
the Annual Report on Remuneration or indeed on
any other aspect of the work of the Committee and
can be contacted by email at
remunerationchair@graftonplc.com.
Andrea Gisle Joosen
Chair of the Remuneration Committee
4 March 2026
Remuneration Committee Report continued
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Remuneration Policy Report
2026 Remuneration Policy summary
Element Proposed changes to policy
Annual bonus
• The maximum bonus opportunity under the policy will increase from 150% to 180% of salary.
• Executive Directors will be no longer required to allocate 30% of their annual bonus after
statutory deductions for the purchase of shares in the Group once the share ownership
guideline as outlined inthePolicy is satisfied. The 30% allocation will continue to be
mandatory until the guideline is fulfilled. This approach will apply to the 2025 annual bonus
award.
Long Term Incentives
• The maximum award opportunity under the policy will increase from 200% of base salary to
250% of base salary.
• Introduction of dividend equivalents in respect of LTIP awards to the extent that they vest.
All-employee share plans
• The policy description has been revised to include the Grafton Group plc Employee Share
Participation Scheme.
Chair and Non-Executive
Director fees
• The policy description has been revised to confirm that fees are subject to annual review and
now incorporates the additional fee applicable to the Senior Independent Director position.
Malus and Clawback
• Malus and Clawback period shortened from six years to three years.
Other
• Minor wording changes to improve operation, implementation, clarity and alignment with
best practice.
This part of the Directors’ Remuneration Report sets out the Remuneration Policy for the
Company and has been prepared in accordance with Schedule 8 to the UK Large and
Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as
amended), the Companies (Miscellaneous Reporting) Regulations 2018 (the 2018
regulations), the Companies (Directors’ Remuneration Policy and Directors’ Remuneration
Report) Regulations 2019 (the 2019 regulations) and the disclosure requirements set out in
the Listing Rules of the UK Financial Conduct Authority. This report also complies with the
European Union (Shareholders’ Rights) Regulations 2020 introduced in Ireland in March
2020. The policy has been developed taking into account the principles of the 2024 UK
Corporate Governance Code.
This policy will take effect from the 2026 AGM and is intended to apply until the 2029 AGM
and covers the financial years 2026, 2027and 2028.
Jun
• Comprehensive review of the current policy, including
engagement with key stakeholders to identify key priorities.
• Benchmarking analysis performed against peer group
companies and prevailing market trends.
• Assessment of regulatory developments and UK
Corporate Governance Code updates.
Sep
• New policy draft prepared for consideration and approval.
Dec
• Committee approval of revised policy and approach to
shareholder consultation.
Jan
• Formal consultation process initiated with major
shareholders.
Mar
• Committee approval of revised policy in preparation for
publication in 2025 Annual Report and Accounts.
May
• Remuneration Policy presented at the AGM for
shareholder approval.
Policy review process
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Policy overview
The objective of the Remuneration Policy is to
provide remuneration packages for each Executive
Director that will:
• Attract, retain and motivate executives of high
calibre;
• Ensure that executive management is provided
with appropriate incentives to support the
delivery of the strategy and encourage enhanced
sustainable long-term performance;
• Ensure that the overall package for each Director
is linked to the short and longer-term strategic
objectives of the Group as well as being aligned
with the Company purpose and values; and
• Have a significant proportion of the potential
remuneration package paid in equity, which is
designed to ensure that executives have a strong
alignment with shareholders through high levels
of executive share ownership both during and
post-employment.
When setting the levels of short-term and
long-term variable remuneration and the balance
of equity and cash within the package,
consideration is given to discouraging
unnecessary risk-taking whilst ensuring that
performance hurdles are suitably challenging.
In determining the Policy, the Remuneration
Committee took into account all factors which it
considered necessary, including market practice,
the changing nature of the business and markets
in which it operates, the performance of the Group,
the experience, responsibility and track record of
the individuals concerned and remuneration
practices elsewhere in the Group.
How the views of shareholders are taken
into account
The Committee considered the guidelines issued
by bodies representing institutional shareholders
and feedback from shareholders on the Group’s
remuneration policies and practices. It also
consulted with our largest shareholders and a
number of the shareholder advisor bodies prior
tofinalising proposed changes to the current
Remuneration Policy.
Feedback received during meetings with major
shareholders was broadly positive and helped
shape the final proposals. The Committee took
account of the views expressed and considered
refinements to certain aspects of the Policy in
response to the consultation process.
When any significant changes are proposed to the
Policy in the future, the Committee Chair will look
to consult with major shareholders in advance and
aim to offer a meeting to discuss proposed
changes. The Committee will actively engage with
shareholders and give serious consideration to
their views including any feedback received prior
toand during the Annual General Meeting.
Details of votes cast for and against the resolution
to approve the prior year’s Remuneration Report
and any matters discussed with shareholders
during the year are referred to in the Annual
Reporton Remuneration and in the
Chair’sAnnualStatement.
How the views of employees are taken
into account
The Committee is provided with an overview of
workforce remuneration each year and this was
taken into consideration in deciding the pay of
Executive Directors and senior management.
Although the Committee does not directly consult
with employees on Directors’ remuneration, the
Committee does take into consideration the pay
and employment conditions of all employees when
setting the policy for Directors’ remuneration.
Salary increases are normally in-line with the
general increase for the broader employee
population in the Ireland and the UK and pension
contributions for Executive Directors were aligned
to the level available for the majority of the
workforce in the UK. The Committee is also
mindful of any changes to the pay and benefit
conditions for employees more generally when
considering the policy for directors’ pay. When
determining incentive outcomes for directors,
including if discretion should be applied, the
Committee will also consider workforce pay and
broader incentive outcomes.
Finally, members of the Committee attended
Colleague Forums during the year in the UK, and
Ireland. Colleague Forums, made up of colleagues
from each of our businesses, provide an
opportunity for our people to engage with
Non-Executive Directors and for their views,
including any on remuneration, to be heard at
management and Board level.
2026 Remuneration Policy for Directors
The following table summarises the key aspects
ofthe Remuneration Policy for Executive Directors.
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Element, purpose and link
tostrategy Operation Maximum opportunity/limit Performance targets/comments
Base salary
To recruit, retain
andreward
executives of a
suitable calibre
forthe roles and
dutiesrequired
Salaries of Executive Directors are normally reviewed annually and any changes
arenormally made effective from 1 January (but may be reviewed and increased
atother times).
When conducting this review and the level of increase, the Committee considers
arange of factors including:
• The performance of the Group and the individual;
• Market conditions;
• The prevailing market rates for similar positions in UK and Irish companies
ofbroadly comparable size and a number of industry specific peers;
• The responsibilities and experience of each Executive Director;
• The level of salary increases implemented across the Group; and
• Other relevant factors.
There is no set maximum, however any increases
are normally in-line with the general increase for
the broader employee population.
Individual adjustments in excess of this may
bemade at the discretion of the Committee
forexample:
• To recognise an increase in the scale, scope or
responsibility of a role;
• A significant change in the size and/or scope
ofthebusiness;
• Development of an individual within the role;
• Where there has been a significant change in
market practice; and
• Other exceptional circumstances.
Not applicable.
Benefits
Provide market
competitive benefits
Benefits may include company car, mobile telephone, life assurance, private medical
cover and permanent health insurance.
The Committee may introduce other benefits if it is considered appropriate to do so.
Any reasonable business-related expenses may be reimbursed, including tax thereon.
Where an Executive Director is required to relocate to perform their role, appropriate
one-off or ongoing benefits may be provided (e.g. housing, schooling etc.).
The value of other benefits is based on the cost
to the Company and is not pre-determined.
Not applicable.
Pension
Provide market
competitive benefits
A company contribution to a money purchase pension scheme or provision of a cash
allowance in lieu of pension or a combination of both.
Pension contributions for Executive Directors are
aligned to the level available for the majority
ofthe wider workforce in the UK.
Not applicable.
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Element, purpose and link
tostrategy Operation Maximum opportunity/limit Performance targets/comments
Annual bonus
To encourage and
reward delivery of
the Group’s annual
financial and
strategic objectives
Bonus payments are determined by the Committee based on performance against
the targets.
Performance measures and targets are reviewed annually. The bonus is payable in
cash.
Executive Directors are required to apply 30% of their annual bonus, net of statutory
deductions, towards the purchase of shares in the Group until they have met their
share ownership guideline. Shares purchased under this requirement are normally
subject to a holding period of two years.
Clawback applies as set out in the notes to the policy table below.
The maximum award under the Annual Bonus
Scheme which may be granted in respect of any
financial year is 180% of basic salary.
The Committee may, in its discretion, adjust
annual bonus payments, if it considers that the
outcome does not reflect the underlying financial
or non-financial performance of the participant or
the Group over the relevant period, or that such
payout level is not appropriate in the context of
circumstances that were unexpected or
unforeseen when the targets were set.
When making this judgement the Committee
may take into account such factors as it
considers relevant.
The majority of the bonus will normally be based
on the achievement of appropriate financial
measures but may also include an element for
non-financial measures including personal
performance, ESG and strategic measures.
The metrics chosen and their weightings will be
set out in the Annual Report on Remuneration.
For financial measures, a sliding scale is set
bythe Committee. No bonus is payable if
performance is below a minimum threshold,
upto 20% is payable for achieving threshold
withfull bonus payable for achieving the upper
point on the scale.
Long Term Incentives (LTIP)
To encourage and
reward delivery of
the Group’s strategic
objectives; to provide
alignment with
shareholders
through the use of
shares and to assist
with retention
An Executive Director may be granted an award over shares which vest subject to the
achievement of performance conditions.
Dividends (or equivalents, including the value of reinvestment) may accrue in respect
of share awards to the extent that they vest.
Executive Directors are normally required to hold any vested shares (net of tax and
other statutory obligations) for two years post-vesting.
Executive Directors are expected to retain half of any shares that vest under the LTIP
after taking into account any shares sold to pay tax and other statutory obligations
until this shareholding is met.
Malus and clawback apply as set out in the notes to the table.
The maximum value of awards which may be
granted in respect of any financial year is 250%
ofbasic salary.
The Committee may, in its discretion, adjust the
LTIP vesting outcome, if it considers that the
outcome does not reflect the underlying financial
or non-financial performance of the participant or
the Group over the relevant period, or that such
payout level is not appropriate in the context of
circumstances that were unexpected or
unforeseen when the targets were set.
When making this judgement the Committee
may take into account such factors as the
Committee considers relevant.
LTIP awards vest subject to the achievement of
performance targets normally measured over
athree-year performance period.
The Remuneration Committee sets the
performance conditions each year which may
include financial and non-financial or share price
related metrics for each award taking account of
the medium to long-term strategic objectives of
theGroup.
Normally, 25% of a metric will vest if the lower
target in the range is achieved. Where the
outcome is between the threshold and maximum
targets in the range, then between 25% and 100%
of this part of the award will normally vest on a
straight-line basis.
The vesting of shares is also subject to the
Committee being satisfied that the overall
financial results have been satisfactory in the
circumstances over the performance period.
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Element, purpose and link
tostrategy Operation Maximum opportunity/limit Performance targets/comments
All-employee share plans
To encourage share
ownership and align
the interests of
employees with
shareholders
Executive Directors are entitled to participate in employee share schemes in
operation during the period of the policy on the same basis as other colleagues.
The Group currently operates the 2021 Approved SAYE Plan for UK colleagues and the
Grafton Group plc Employee Share Participation Scheme for Grafton Group plc
colleagues in Ireland.
The limits are in line with the limits for other
colleagues which are set by the UK/Ireland tax
authorities.
Not applicable.
Share ownership guidelines
To increase the
alignment of
interests between
Executive Directors
and shareholders
Executive Directors are expected to build and maintain a holding of Company shares
equal to at least 200% of base salary.
LTIP awards made that are subject to the two-year holding period will be deemed
tobe part of an Executive Directors’ shareholding.
Executive Directors will normally be expected to maintain a minimum shareholding
of200% of salary (or actual shareholding if lower) for the two years after stepping
down from the Board. The Committee retains discretion to waive this guideline
inexceptional circumstances if it is not considered to be appropriate.
Not applicable. Not applicable.
Chair and Non-Executive Director fees
To attract and retain
a high-calibre Chair
and Non-Executive
Directors by offering
a market competitive
fee level
The Committee is responsible for evaluating and determining the fees payable to the
Chair.
The Chair and CEO are responsible for evaluating and making recommendations
tothe Board on fees payable to the Non-Executive Directors within an aggregate
limitapproved from time to time by shareholders.
The Chair is currently paid a single inclusive fee for the role.
The policy is to pay Non-Executive Directors a basic fee for membership of the
Boardand additional fees to the Senior Independent Director and the Chairs of the
Remuneration and Audit and Risk Committees to recognise the additional
responsibilities and time commitment of these roles.
Additional fees may be paid to reflect additional Board or Committee responsibilities
or time commitments as appropriate.
The level of fees paid to the Chair of the Board and all Non-Executive Directors
recognises the time commitment and responsibilities of the role.
The Chair and Non-Executive Directors may be reimbursed for travel andaccommodation
expenses (and any personal tax that may be due onthoseexpenses).
The Chair and Non-Executive Directors do not participate in any pension
orincentiveplans.
Additional benefits may be introduced if considered appropriate.
Fees are normally reviewed annually, taking
account of any changes in responsibilities and
set by reference to independently sourced market
data to ensure that they remain in line with
market practice.
Not applicable.
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Clawback and malus
Annual bonus
The Annual Bonus Scheme is subject to clawback
for three years from the date of payment if:
• The Committee forms the view that the Company
materially misstated its financial results for
whatever reason and that such misstatement
resulted either directly or indirectly in a bonus
award vesting to a greater degree than would
have been the case had that misstatement not
been made;
• The Committee forms the view that in assessing
the extent to which any performance condition
and or any other condition imposed on any bonus
award was based on an error, or on inaccurate or
misleading information or assumptions and that
such error, information or assumptions resulted
either directly or indirectly in a bonus being made
to a greater degree than would have been the
case had that error not been made;
• The Group or any part of the Group in the
reasonable opinion of the Committee, following
consultation with the Audit and Risk Committee,
suffered a material failure of risk management
and where the Committee forms the view that
the conduct of a Director contributed to the
circumstances leading to such failure;
• A Director is found guilty or pleads guilty to a
crime that is related to or damages the business
or reputation of any member of the Group;
• There is reasonable evidence of fraud or material
dishonesty by a Director that is related to or
damages the business or reputation of any
member of the Group; or
• A Director is in breach of any applicable
restrictions on competition, solicitation or the
use of confidential information.
These provisions are applicable to bonus awards
granted under this Policy and, at the Committee’s
discretion, may also extend to bonus awards
issued pursuant to previous policies.
Remuneration Policy Report continued
Long-term incentives
The Committee has the discretion, in
circumstances in which the Committee considers
such action is appropriate, to decide at any time
prior to the vesting of an award that the Director to
whom the award was issued shall be subject to
forfeiture or reduction (including by way of
imposition of additional conditions) of all or part of
an award before it has vested.
The Committee also has the discretion to require
the repayment of vested awards (within three years
of the date of award vesting) in specified
circumstances, including:
• where there is a material misstatement in the
Company’s financial results and that such
misstatement resulted either directly or indirectly
in an award vesting to a greater degree than
would have been the case had that misstatement
not been made;
• where in calculating the number of shares to
which an award relates or in determining the
performance conditions and/or any other
condition imposed on the award or in assessing
the extent to which any performance condition
and/or any other condition imposed on the award
was satisfied such calculation, determination or
assessment was based on an error, or on
inaccurate or misleading information or
assumptions and that such error, information or
assumptions resulted either directly or indirectly
in that award vesting over a greater number of
shares or to a greater degree than would have
been the case had that error not been made;
• where it is determined that there has been a
material failure of risk management;
• where the conduct of the relevant participant
contributed to circumstances leading to an
insolvency or corporate failure resulting in the value
of the Company’s shares being materially reduced;
• where the relevant participant is found guilty of
or pleads guilty to a crime that is related to or
damages the business or reputation of any
member of the Company’s group;
• there is reasonable evidence of fraud or material
dishonesty by the relevant participant that is related
to or damages the business or reputation; and
• breach of any applicable restrictions on
competition, solicitation or the use of confidential
information.
The LTIP is subject to malus provisions including
but not limited to the material misstatement of
financial results, a material failure of risk
management, serious reputational damage or
where a participant contributed to circumstances
leading to the Group receiving a notification that it
may become subject to any regulatory sanctions.
These provisions apply to LTIP awards that vest
following the approval of this Policy.
Annual bonus and LTIP discretions
The Committee will operate the Annual Bonus
Scheme and LTIP according to their respective
rules and in accordance with the Listing Rules and
applicable tax rules. The Committee, consistent
with market practice, retains discretion over a
number of areas relating to the operation and
administration of these plans. These include (but
are not limited to) the following (albeit within the
level of award restricted as set out in the policy
table above):
• Who participates in the plan;
• The timing of grant of awards;
• The size of awards;
• The choice of performance measures and
performance target conditions in respect of each
annual award (including the setting of financial
targets and the selection of a TSR comparator
group);
• The determination of vesting, including discretion
to override formulaic outcomes;
• Whether malus and/or clawback shall be applied
to any award and, if so, to the extent to which
they shall apply;
• Discretion relating to the measurement of
performance in the event of a change of control
or reconstruction;
• Determination of a good leaver status (in addition
to other specified categories) for incentive plan
purposes based on the rules of the plan;
• Adjustments required in certain circumstances
(e.g., in the event of a demerger, special dividend
or an alteration to the capital structure of the
Company including a capitalisation of reserves or
rights issue); and
• The ability to adjust existing performance
conditions for exceptional events so that they
can still fulfil their original purpose.
Legacy arrangements
The Committee reserves the right to make any
remuneration payments and/or payments for loss
of office (including exercising any discretions
available to it in connection with such payments)
notwithstanding that they are not in line with the
Policy set out above, where the terms of the
payment were agreed: (i) before the Policy set out
above came into effect, provided that the terms of
the payment were consistent with the shareholder-
approved Directors’ Remuneration Policy in force
at the time they were agreed; or (ii) at a time when
the relevant individual was not a director of the
Company (or other persons to whom the Policy set
out above applies) and, in the opinion of the
Committee, the payment was not in consideration
for the individual becoming a director of the
Company. For these purposes, ‘payments’ include
the Committee satisfying awards of variable
remuneration and, in relation to an award over
shares, the terms of the payment are ‘agreed’ no
later than at the time the award is granted.
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Differences in remuneration policy for
Executive Directors compared to other
employees
The Committee is made aware of pay structures
across the Group when setting the remuneration
policy for Executive Directors. The Committee
considers the general basic salary increase for the
broader employee population when determining
the annual salary review for the Executive Directors
and the pension is aligned with that offered to the
majority of the workforce in the UK.
Overall, the remuneration policy for the Executive
Directors is more heavily weighted towards
variable pay than for other employees. This
ensures that there is a clear link between value
created for shareholders and remuneration
received by Executive Directors and it recognises
that Executive Directors should have the greatest
accountability and responsibility for increasing
shareholder value.
Approach to recruitment and promotions
The Committee will as a general principle seek to
offer a remuneration package to a new Executive
Director which can secure the best individual for
the role while seeking to pay no more than it
believes is necessary to make the appointment.
The remuneration package for a new Director will
normally be set in accordance with and subject to
the limits set out in the Group’s approved policy as
set out earlier in this report, subject to such
modifications as are set out below.
Salary levels for Executive Directors will be set in
accordance with the Policy, taking into account the
experience and calibre of the individual and his/her
existing remuneration package.
Where it is appropriate to offer a lower salary
initially, a series of increases to the desired salary
positioning may be made over subsequent years
subject to individual performance and
development in the role. Benefits will generally be
provided in line with the approved policy.
Where necessary the Committee may approve the
provision of one-off or ongoing expatriate benefits
(e.g. housing, schooling etc.) to facilitate
recruitment and ensure that flexibility is retained
for the Company to pay for legal fees and other
costs incurred by the individual in relation to their
appointment. The rate of pension contribution will
be aligned to the level available for the majority of
the wider workforce at the date of appointment.
The structure of the variable pay element will
normally be in accordance with and subject to the
limits set out in the Group’s approved policy
detailed above. Different performance measures
may be set initially for the annual bonus in the year
an Executive Director joins the Group taking into
account the responsibilities of the individual and
the point in the financial year that he or she joins
the Board.
Subject to the rules of the scheme, an LTIP award
may be awarded after joining the Group.
If it is necessary to buy-out incentive pay or benefit
arrangements or other contractual terms (which
would be forfeited on leaving the previous
employer) in the case of an external appointment,
this would be provided for taking into account the
form (cash or shares), timing and expected value
(i.e., likelihood of meeting any existing
performance conditions) of the remuneration
being forfeited. The general policy is that payment
would generally be on a ‘like-for-like’ basis unless
this is considered by the Committee not to be
practical or appropriate.
Share awards may be used to the extent permitted
under the Group’s existing share plans and the
Listing Rules where necessary.
In the case of an internal hire, any outstanding
variable pay awarded in relation to the previous
role will be allowed to pay out according to its
terms of grant or adjusted as considered desirable
to reflect the new role.
Fees for a new Chair or Non-Executive Director will
be set in line with the approved policy.
Service contracts and payments for loss of
office
The Committee determines the contractual terms
for new Executive Directors, subject to appropriate
professional advice to ensure that these reflect
best practice.
The Group’s policy is that the period of notice for
Executive Directors will not exceed 12 months. The
employment contracts of the current CEO and the
CFO may be terminated on six months’ notice by
either side. In the event of a Director’s departure,
the Group’s policy on termination is as follows:
• The Group will pay any amounts it is required to
make in accordance with or in settlement of a
Director’s statutory employment rights;
• The Group will seek to ensure that no more is
paid than is warranted in each individual case;
• There is no entitlement to bonus paid following
notice of termination unless expressly provided
for in an Executive Director’s employment
contract, but the Group reserves the right to pay
a bonus for service to the date of cessation of
employment. Such bonus would normally be
subject to the same performance conditions as
the normal bonus and payable at the normal time
but may be paid at cessation of employment if
determined by the Committee. The Committee
may determine that any requirement to defer
bonus shall not be applied;
• The Committee also retains the discretion to
meet any reasonable legal fees or outplacement
costs or cost of a similar nature if deemed
necessary; and
• Following service of notice to terminate
employment, the Company may place the
executive on garden leave. During this time, the
executive will continue to receive salary and
benefits (or a sum equivalent to) until the
termination of employment. An executive would
not normally be entitled to a bonus for any period
of gardening leave.
A Director’s service contract may be terminated
without notice and without any further payment or
compensation, except for sums accrued up to the
date of termination, on the occurrence of certain
events such as gross misconduct.
If the Group terminates employment in lieu of
notice in other circumstances, compensation
payable is as provided for in employment contracts
which is as follows:
• Eric Born – basic salary together with pension
and benefits due for any unexpired period.
• David Arnold – basic salary together with
benefits and bonus which would have been
payable during the notice period or any unexpired
balance thereof. Any bonus payable is subject to
performance conditions. Payments may be made
in monthly instalments.
The Group may pay salary, benefits and pension
only in lieu of notice for a new Director.
The treatment of unvested awards previously
granted under the LTIP upon termination will be
determined in accordance with the plan rules.
As a general rule, an LTIP award will lapse upon a
participant giving or receiving notice of his/her
cessation of employment. However, for certain
good leaver reasons including death, ill health,
injury, disability, redundancy, agreed retirement,
their employing company or business being sold
out of the Group, or any other reason at the
Committee’s discretion after taking into account
the circumstances prevailing at the time, awards
will normally vest on the normal vesting date
subject to the satisfaction of performance
conditions and, unless the Committee determines,
otherwise pro-rating the award to reflect the
reduced period of time between the
commencement of the performance period and
the Executive Director’s cessation of employment
as a proportion of the total performance period.
Alternatively, the Committee can decide that the
award will vest on the date of cessation, subject to
the extent to which the performance conditions
have been satisfied at the date of cessation and,
unless the Committee determines otherwise,
pro-rated to the date of cessation of employment.
Remuneration Policy Report continued
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Corporate Governance
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Financial Statements
191-198
Supplementary Information
Non-Executive Directors
All Non-Executive Directors have letters of
appointment with the Company for an initial period
of three years, unless otherwise terminated earlier
by and at the discretion of either party upon one
month’s written notice or otherwise in accordance
with the Group’s Articles of Association and
subject to annual reappointment at the AGM.
The appointment letters for Non-Executive
Directors provide that no compensation is
payableon termination other than accrued
feesand expenses.
Remuneration scenarios for Executive
Directors
The Group’s normal policy results in a significant
portion of remuneration received by Executive
Directors being dependent on performance.
The chart below shows how the total pay
opportunities for 2026 for Executive Directors vary
under four performance scenarios – Minimum,
Inline with Expectation, Maximum and Maximum
plus 50% share price growth.
Assumptions
Minimum = fixed pay only (2026 salary, benefits
and pension).
In line with expectation (which is not target) = 50%
vesting of the annual bonus and LTIP awards.
Maximum = 100% vesting of the annual bonus
andLTIP awards.
Maximum plus 50% Share Price Growth = 100%
vesting of the annual bonus and LTIP awards plus
50% share price growth.
Remuneration Policy Report continued
Chief Executive Officer – Eric Born (£’000)
Performance in line
with expectations
Maximum performance
Maximum performance
(with 50% share price increase)
Minimum performance
100%
34%
28%
38%
21%
33%
46%
17%
27%
37% 19%
£915
£2,679
£4,443
£5,469
Chief Financial Officer – David Arnold (£’000)
100%
38%
25%
37%
24%
31%
45%
19%
25%
37% 19%
£568
£1,491
£2,415
£2,964
Performance in line
with expectations
Maximum performance
Maximum performance
(with 50% share price increase)
Minimum performance
 Fixed
 Annual bonus
 Long-term incentive awards
 Share price growth
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Financial Statements
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Supplementary Information
Remuneration at a glance
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Supplementary Information
2025 remuneration
overview
Remuneration structure
Short term Long term
Base
salary
+
Pension &
benefits
+
Annual
bonus
+
Long term
incentives
=
Total
remuneratIon
Fixed Variable
Total remuneration in 2025
 Base salary
 Pension & benefits
 Annual bonus
 Long term incentives
Variable remuneration
outcomes in 2025
(CEO and CFO)
Share ownership
Annual bonus 2025
 Operating profit
 Free cash flow
65.6%
of maximum
opportunity
Single
total
figure
Chief Executive Officer Chief Financial Officer
Long term Incentives
 Adjusted EPS pre-property profit
 Relative TSR
30.1%
of maximum
opportunity
3.04 times salary, 157,500 shares
41.6%
Fixed pay
58.4%
Variable pay
43.2%
Fixed pay
56.8%
Variable pay
Maximum opportunity Outcome as % of maximum
70.0%
30.0%
45.9%
19.7%
Maximum opportunity Outcome as % of maximum
50.0%
50.0%
30 .1%
Eric Born
(CEO)
David Arnold
(CFO)
£2.1m £1.3m
Eric Born
2 times salary
David Arnold
2 times salary
0.37 times salary, 31,739 shares
Annual Report on Remuneration
Membership of the Remuneration
Committee
The Committee currently comprises Ms. Andrea
Gisle Joosen, Chair, Dr. Rosheen McGuckian, Ms.
Avis Darzins, Mr. Mark Robson and Mr. David Dillon
all of whom are Non-Executive Directors
determined by the Board to be independent.
The Committee members have no personal
financial interest, other than as shareholders, in
matters to be decided, no potential conflicts of
interests arising from cross-directorships and no
day-to-day involvement in running the business.
The Non-Executive Directors are not eligible for
pensions and do not participate in the Group’s
bonus or share schemes. The Committee’s Terms
of Reference can be found on the Group website.
Mr. Ian Tyler, Chair, attended meetings of the
Committee during 2025 by invitation and
participated in discussions. During the year the
Committee consulted with the Chief Executive
Officer who was invited to attend part of the
meetings of the Committee. Ms. Paula Harvey,
Group HR Director, was Secretary to the
Committee during the year. The Chair of the
Committee was assisted in her work by the
Company Secretary and the Deputy Company
Secretary.
No Director or the Company Secretary or the
Group HR Director took part in discussions relating
to their own remuneration and/or benefits.
Deloitte LLP (‘Deloitte’) serves as the Committee’s
advisor on remuneration matters. During the year,
Deloitte provided the Committee with a market
practice update on remuneration trends and
governance, in addition to advising on the
implementation of the remuneration policy for
2025 and other remuneration matters including the
new remuneration policy. Fees for these services,
charged on a time and materials basis, totalled
£163,700.
Deloitte was appointed by the Committee following
a competitive tender process. The Committee is
satisfied that the Deloitte team advising on
remuneration has no connections with Grafton
Group plc or its Directors that could impair their
independence. Potential conflicts of interest were
reviewed, and the Committee deemed the existing
safeguards against such conflicts to be
appropriate. The Committee is satisfied that all
advice received from Deloitte concerning
remuneration was objective and independent.
Deloitte is a signatory to the Remuneration
Consultants’ Code of Conduct, which mandates
impartial advice. Deloitte has confirmed to the
Committee its compliance with this Code. Deloitte
provided other immaterial services to the Group
during the year.
Although not required under Irish Companies legislation, this report
includes the disclosures required by UK legislation contained in Part 3 of
Schedule 8 to The Large and Medium-sized Companies and Groups
(Accounts and Reports) (Amendment) Regulations 2013, and the
disclosures required by UKLR 6.6.6R of the Listing Rules. The report also
complies with the European Union (Shareholders’ Rights) Regulations
2020 introduced in Ireland in March 2020.
Activity during the year
January 2025
• Initial consideration of 2025 Annual Bonus
Scheme including structure, measures and
targets;
• Initial consideration of 2025 LTIP
performance conditions, measures and
targets;
• Considered feedback from shareholders
regarding implementation of Remuneration
Policy in 2025; and
• Annual review of Committee’s performance.
March 2025
• Determined Annual Bonus Scheme payments
for 2024;
• Determined the extent of vesting of the LTIP
awards granted in April 2022;
• Agreed the quantum of 2025 LTIP awards to
be granted to Executive Directors, and the
GMT including the Company Secretary;
• Agreed the performance conditions measure
and targets for the 2025 LTIP awards for
Group Management Team (GMT) including
the Company Secretary;
• Agreed the 2025 Bonus Scheme structure,
measures and targets;
• Reviewed the CEO Pay Ratio with the wider
workforce;
• Considered and approved the Report of the
Remuneration Committee on Directors’
Remuneration; and
• Reviewed and agreed good leaver
recommendations in line with LTIP rules.
April 2025
• Grant of awards under SAYE Scheme to UK
colleagues.
May 2025
• Update on shareholder voting and feedback
on AGM resolution on Annual Report on
Remuneration; and
• Considered and agreed process for
Remuneration Policy review.
September 2025
• Considered Policy Review matters.
October 2025
• Determined the extent of vesting of the LTIP
awards granted in November 2022 to the
CEO;
• Reviewed and agreed good leaver
recommendations in line with LTIP rules;
• Considered an update from Deloitte on latest
executive remuneration trends and corporate
governance developments;
• Considered a management proposal on
changes to Executive Remuneration;
• Considered Policy review matters;
• Reviewed share allocation and dilution limits;
• Reviewed Executive Directors’ shareholdings
against Policy; and
• Reviewed and agreed the Committee
proposed work schedule for 2026.
December 2025
• Considered Policy review matters and agreed
approach to shareholder consultation;
• Considered an update on pay across the
Group’s workforce;
• Determined 2026 salary increases for
Executive Directors and the GMT including
the Company Secretary;
• Reviewed and approved a remuneration
Proposal for GMT members;
• Considered level of potential Bonus Awards
for 2025;
• Considered level of potential vesting of 2023
LTIP awards in 2026;
• Approved a proposal relating to pension
contribution rates for businesses in Ireland;
• Approved proposed changes of Remuneration
Committee Terms of Reference; and
• Approved 2026 fee increase for Non-
Executive Chair.
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Sustainability Statement
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Corporate Governance
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Financial Statements
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Supplementary Information
Single total remuneration figure of Directors’ remuneration
The following table sets out the total remuneration for Directors for the year ending 31 December 2025 and the prior year.
Salary/Fees (a) Bonus (b) Pension (c) Other benefits (d) Long Term Incentive Plan (e) Total
2025
£’000
2024
£’000
2025
£’000
2024
£’000
2025
£’000
2024
£’000
2025
£’000
2024
£’000
2025
£’000
2024
£’000
2025
£’000
2024
£’000
Executive Directors
E. Born 797 770 784 741 72 69 21 25 467 44 2,141 1,649
D. Arnold 485 468 477 376 44 42 24 22 249 82 1,279 990
1,282 1,238 1,261 1,117 116 111 45 47 716 126 3,420 2,639
Non-Executive Directors
I. Tyler
(i)
250 175 – – – – – – – – 250 175
R. McGuckian
(ii)
69 61 – – – – – – – – 69 61
A. Darzins 66 61 – – – – – – – – 66 61
M. Robson 80 68 – – – – – – – – 80 68
D. Dillon
(iii)
43 – – – – – – – – – 43 –
A. Gisle Joosen
(iv)
38 – – – – – – – – – 38 –
Retired Non-Executive Directors
(v)
S. Murray 72 71 – – – – – – – – 72 71
V. Crowley 54 61 – – – – – – – – 54 61
M. Roney – 81 – – – – – – – – – 81
P. Hampden Smith – 24 – – – – – – – – – 24
672 602 – – – – – – – – 672 602
Total Remuneration 1,954 1,840 1,261 1,117 116 111 45 47 716 126 4,092 3,241
(i) Mr. I. Tyler was appointed to the Board on 1 March 2024.
(ii) Dr. R. McGuckian was appointed Senior Independent Director with effect from 22 October 2025 and was entitled to the Senior Independent Director fee from that date.
(iii) Mr. D. Dillon was appointed to the Board on 12 May 2025.
(iv) Ms. A. Gisle Joosen was appointed to the Board on 1 July 2025 and succeeded Mrs. S. Murray as Chair of the Remuneration Committee on 2 September 2025.
(v) Mrs. S. Murray and Mr. V. Crowley stepped down from the Board on 21 October 2025. Mr. M. Roney and Mr. P. Hampden Smith stepped down from the Board on 2 May 2024.
Notes to the Directors’ remuneration table:
(a) This is the amount of salaries and fees earned in respect of the financial year. Non-Executive Directors’ fees are payable in local currency. Additional fees are payable to the Senior Independent Director and each
of the Chairs of the Audit and Risk Committee and the Remuneration Committee. Details of fees paid during 2025 are shown on page 102.
(b) This is the amount of bonus earned in respect of the financial year. The amount payable in respect of 2025 will be paid at the end of March2026.
(c) This is the amount of contribution payable in respect of the financial year by way of a company contribution to a pension scheme or a taxable payment in lieu of pension made through the payroll.
(d) Benefits comprise permanent health and medical insurance and the provision of a company car or a car allowance.
(e) For the year ended 31 December 2025, this is the value of LTIP awards that will vest in April 2026. The vesting of these awards was subject to performance conditions over the period from1 January 2023 to
31 December 2025. The value of the awards that will vest is based on the average share price of £9.30 for the three months to 31 December 2025. This represents an increase of £0.43 or 4.8% from the share
price of £8.87 at the date of grant. Forthe year ended 31 December 2024, this is the value of LTIP awards that vested in April/November 2025 which has been updated from that disclosed last year to reflect the
share prices of £8.622 and £9.3455 on the dates of vesting. The amounts disclosed in the 2024 report were £46,000 in respect of Mr. E. Born and £94,000 in respect of Mr. D. Arnold.
Comparative figures included in the tables above and on page 102 have been presented on a consistent basis with the current year. Further details on the valuation methodologies applied are set out in notes (a) to (e)
above. These valuation methodologies are as required by the Regulations and are different from those applied within the financial statements which have been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the EU. The total expense relating to the Directors recognised within the income statement in respect of the Long Term Incentive Plan (LTIP) is £667,000 (2024: £941,000).
Annual Report on Remuneration continued
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Sustainability Statement
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Corporate Governance
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Financial Statements
191-198
Supplementary Information
Annual Report on Remuneration continued
The following table sets out the total remuneration for Executive Directors split between fixed and variable
pay for the year ending 31 December 2025 and the prior year. Fixed pay includes salary, fees, pension and
other benefits. Variable pay includes bonus and LTIP. The remuneration of Non-Executive Directors is all
fixed pay.
Total fixed pay Total variable pay Total
2025
£’000
2024
£’000
2025
£’000
2024
£’000
2025
£’000
2024
£’000
Executive Directors
E. Born 890 864 1,251 785 2,141 1,649
D. Arnold 553 532 726 458 1,279 990
1,443 1,396 1,977 1,243 3,420 2,639
Fixed pay in 2025
Salaries
Having taken account of both external market developments and internal Group considerations, the
Committee approved in December 2024 a basic salary increase of 3.5% with effect from 1 January 2025
for the Chief Executive Officer andthe Chief Financial Officer which was lower than average awards of
4.65% to colleagues across the Group.
Salary/fees
2025
£’000
2024
£’000 Change
E. Born 797 770 3.5%
D. Arnold 485 468 3.5%
Non-Executive Directors’ fees
In December 2024, following a benchmark review of Non-Executive Director fees, to ensure remuneration
remained competitive and aligned with companies of similar size and complexity, the Committee
approved increases to the basic Non-Executive Director fee and additional fee for Chairs of the Audit and
Risk Committee and the Remuneration Committee, effective from 1 January 2025. A supplemental fee
for the Senior Independent Director role was introduced from 1 January 2025. The fee paid to Mr. Ian
Tyler, Non-Executive Chair, for 2025 was unchanged from 2024.
2025
£’000/€’000
2024
£’000/€’000 Change
Chair’s fee £250 £250 –
Non-Executive Director basic fee £66/€78 £61/€73 7.4%
Additional fees
Senior Independent Director £11/€13 – –
Audit and Risk Committee Chair £14/€17 £10/€12 42.6%
Remuneration Committee Chair £14/€17 £10/€12 42.6%
Benefits
Health and
medical
insurance
£’000
Provision of a
company car/
car allowance
£’000
Total 2025
taxable
benefits
£’000
Total 2024
taxable
benefits
£’000
E. Born 11 10 21 25
D. Arnold 7 17 24 22
Benefits comprise permanent health and medical insurance and the provision of a company car.
Pension
Pension benefits comprise either a company contribution to an Executive Director’s personal pension
plan, a company contribution to the Group defined contribution pension scheme or a taxable non-
pensionable cash allowance paid through the payroll in lieu of pension benefit.
2025
Base salary
£’000
% of
salary
2025
Pension
contribution
£’000
2024
Pension
contribution
£’000
E. Born 797 9.0% 72 69
D. Arnold 485 9.0% 44 42
The rate of pension contribution is maintained at 9.0% of base salary as implemented on 1 January 2023
and is aligned with the contribution rate available to the majority of the UK workforce.
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Sustainability Statement
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Corporate Governance
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Financial Statements
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Supplementary Information
Pay for performance
Annual bonus
The maximum bonus opportunity for Mr. Born and Mr. Arnold was 150% of salary respectively. The bonus
was based on two financial measures.
The tables below analyse the composition of the bonus opportunity for the year (% of salary) for the CEO
and CFO:
Percentage of basic salary
Operating profit Free cash flow Maximum bonus payable
E. Born 105% 45% 150%
D. Arnold 105% 45% 150%
Financial targets were set at the beginning of the year by reference to the Group’s budget for 2025. The
actual targets and performance against those targets are set out in the table below for 2025:
Threshold
(20% payable)
Target
(50% payable)
Stretch
(100% payable) Actual
% of Maximum
payable
Operating profit (£’000)
*
£164,262 £177,580 £190,899 £181,697 65.5%
Free cash flow
**
80.00% 85.00% 100.00% 89.75% 65.8%
* Adjusted constant currency operating profit, before property profit which decreased operating profit as reported by £2,613,000.
** Based on free cash flow excluding the impact of property related proceeds, associated gains or losses, and any related taxes.
The operating profit performance condition was based on a sliding scale from 92.5% to 107.5% of the
Group’s budget for 2025. No bonus was payable if performance was below a minimum threshold of
92.5% of target. The bonus opportunity increased on a straight-line basis up to 100% of the bonus
opportunity on achieving 107.5% of target. The free cash flow performance condition was based on a
sliding scale from 80% to 100% of budgeted free cash flow with 20% payable at threshold, 50% payable at
the budgeted free cash flow of 85% and the full bonus payable at 100%.
The Committee considered the extent to which these targets were achieved and agreed a payment of
98.4% of salary, out of a maximum bonus opportunity of 150% of salary for Mr. Born and Mr. Arnold.
These bonuses equate to 65.6% of the maximum opportunity. The Committee agreed that the bonus
outcome was reflective of the underlying financial performance of the Group and therefore no discretion
was applied.
Long Term Incentive Plan
The Remuneration Committee has the authority to set appropriate criteria for each award. The
Committee believes that the LTIP should align management and shareholder interests and assist the
Group in the recruitment and retention of senior executives.
LTIP awards with a performance period covering the three years to 31 December 2025
The performance conditions for LTIP awards made to Executive Directors in March 2023 were based on
growth in EPS and TSR. Half of the awards to Executive Directors were based on relative TSR versus a
comparator group consisting of the constituents of the London Stock Exchange’s FTSE 250 Index excluding
investment trusts. As the Group’s TSR was ranked at between median and 80th percentile, 60.2% of this
half of the award will vest. The other half was based on the Group’s adjusted EPS for the financial year
ended 31 December 2025. The Adjusted EPS outcome was calculated based on the number of shares in
issue as at the end of 31 December 2022. On this basis, adjusted EPS for 2025 was 63.7 pence, excluding
property profit. As this was below the threshold of 89.7 pence, this half of the award will not vest.
Annual Report on Remuneration continued
The relevant targets and results for the year were as follows:
50% TSR relative to a peer group 50% Adjusted EPS
Performance
ranking required
% of element
vesting
Performance
required
% of element
vesting
Below threshold Below median 0% Below 89.7p 0%
Threshold Median 25% 89.7p 25%
Between threshold and stretch
Median - 80
th
percentile 25% - 100% 89.7p - 101.6p 25% - 100%
Stretch or above
Above 80
th
percentile 100% Above 101.6p 100%
Actual achieved Ranked 52
nd
60.2% 63.7p 0%
Based on the above, 30.1% of the total awards granted to the Chief Financial Officer and Chief Executive
Officer will vest in April 2026. The Committee agreed that the vesting outcome was reflective of the
underlying financial performance of the business and no discretion was applied.
The following is a summary of the 2023 awards that will vest in April 2026:
Director
Number of
shares granted
% of award
vesting
Number of
shares vesting
Value of shares
vesting
1
E. Born 166,855 30.1% 50,223 £467,074
D. Arnold 88,839 30.1% 26,740 £248,682
1 As these shares do not vest until after 1 April 2026, a deemed share price is used to calculate the value of the vesting. This is taken as
the three-month average to 31 December 2025 being £9.30.
LTIP awards granted during the year ended 31 December 2025
The following awards were made during the year ended 31 December 2025:
Director Date of grant
Number of
shares granted % of base salary
Share price at
grant date
Value of award
at grant date
E. Born 19 March 2025 182,765 200% £8.7165 £1,593,071
D. Arnold 19 March 2025 111,212 200% £8.7165 £969,379
The 2025 awards to Mr. Born and Mr. Arnold are subject to the achievement of the following performance
conditions:
Performance condition Weighting
Relative TSR 30.0%
Adjusted EPS pre-property profit 30.0%
Average ROCE 30.0%
Gender diversity 5.0%
Carbon reduction 5.0%
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Corporate Governance
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Financial Statements
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Supplementary Information
Financial targets
30% TSR relative to a peer group 30% Adjusted EPS 30% Average ROCE
Ranking
% of element
vesting Performance
% of element
vesting Performance
% of element
vesting
Below threshold
Below
median 0%
Below
79.1p 0%
Below
10.0% 0%
Threshold Median 25% 79.1p 25% 10.0% 25%
Between threshold
andtarget – –
79.1p-
86.1p 25% - 50% – –
Between target and
stretch – –
86.1p-
93.6p 50% - 100% – –
Between threshold
andstretch
Median - 80
th
percentile 25%-100% – –
10.0%-
11.0% 25%-100%
Stretch or above
Above 80
th
percentile 100%
Above
93.6p 100% 11.0% 100%
The TSR comparator group consists of the constituents of the London Stock Exchange’s FTSE 250 Index
excluding investment trusts.
EPS performance will be assessed on adjusted EPS for the final year of the performance period, including
the impact of acquisitions and share buybacks.
ESG targets
5% gender diversity 5% GHG emissions
Performance
% of element
vesting Reduction
% of element
vesting
Below threshold Below 18.75% 0% Below 40.76% 0%
Threshold 18.75% 25% 40.76% 25%
Between threshold and stretch
18.75%-
21.00% 25% - 100% 40.76% - 42.87% 25% - 100%
Stretch or above Above 21.00% 100% Above 42.87% 100%
The gender diversity target is based on increasing the number of females within a target group of
colleagues being the Group Management Team and direct reports, business leaders and their executive
committees, and regional and branch managers or the equivalent general managers in the businesses.
The carbon reduction target is aligned with the SBTi linear pathway to a 48.5% reduction in Greenhouse
Gas (GHG) emissions by 2030, measured against a 2021 baseline. The target for the 2025 LTIP award is
to reduce Scope 1 & 2 GHG emissions by 42.87% by 31 December 2027 against the 2021 base year.
Under the Group’s Science Based Targets Initiative Recalculation Policy, it may be necessary to
recalculate and restate the base year following significant structural changes in the Group. The
Committee will consider the impact of any such recalculation when assessing the outcome of this
performance condition.
In line with best practice and shareholder expectations, the Committee retains discretion to adjust the
vesting outcome if it is not considered to be reflective of the underlying financial and/or non-financial
performance of the business, the performance of the individual over the performance period or where the
outcome is not considered appropriate in the context of the experience of shareholders and other
stakeholders.
A holding period of two years will apply to LTIP awards received by Executive Directors that vest, after
taking into account any shares sold to pay tax and other statutory obligations in line with the
Remuneration Policy. Shares held during the two-year holding period will be deemed to be part of an
Executive Director’s shareholding, for the purposes of monitoring the shareholding guidelines. The
vesting period and the holding period will be five years in total. Clawback provisions apply.
Loss of office payments and payments to past Directors
No loss of office payments or any payments to past Directors were made during the year.
Application of Remuneration Policy in 2026
Salaries
The 2023 Remuneration Policy notes there is no prescribed maximum annual salary increase but the
Committee will be guided by the general increases for the broader employee population but on occasion
may need to recognise an increase in the scale, scope or responsibility of the role. The Committee
approved a salary increase of 3.0% with effect from 1 January 2026 for the CEO and the CFO which was
lower than the average awards of 3.6% to colleagues in Ireland and the UK. The following salaries will
apply from 1 January 2025:
Director
2026
Base salary
£’000
2025
Base salary
£’000
%
Increase
E. Born 820 797 3.0%
D. Arnold 499 485 3.0%
Chair and Non-Executive Directors’ fees
The Chair and Non-Executive Directors’ fees are paid in local currency and reviewed annually. The current
fee structure for the Chair and Non-Executive Directors is shown below.
Director
2026
£’000/€’000
2025
£’000/€’000
%
Increase
Chair’s fee £258 £250 3.0%
Non-Executive Director basic fee £68/€80 £66/€78 3.0%
Additional fees
Senior Independent Director £11/€13 £11/€13 3.0%
Audit and Risk Committee Chair £14/€17 £14/€17 3.0%
Remuneration Committee Chair £14/€17 £14/€17 3.0%
A fee increase of 3.0% applied effective 1 January 2026 to the fees payable to the Chair and Non-
Executive Directors. This adjustment aligns with the salary increases granted to the CEO and CFO and
was lower than the average awards of 3.6% to colleagues in Ireland and the UK.
Annual Report on Remuneration continued
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Financial Statements
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Supplementary Information
Pension and benefits
Mr. Born and Mr. Arnold will receive taxable pension contributions or a cash allowance in lieu of pension
of 9.0% of salary with effect from 1 January 2026 which are aligned to the contribution rate available for
the majority of the wider UK workforce.
Annual bonus
As set out in the Report of the Committee on pages 87 to 90, the maximum bonus opportunity for the
Chief Executive Officer for 2026 has been increased to 180% of salary. The maximum bonus opportunity
for the Chief Financial Officer for 2026 will remain at 150% of salary.
The 2026 annual bonus will continue to be based on adjusted operating profit pre-property profit (70%)
and free cash flow conversion (30%). The Committee believes these metrics remain the most appropriate
measures to incentivise strong annual financial performance and disciplined cash management. These
measures are directly aligned with the Group’s key operational priorities and provide clear, objective
targets that drive value creation for shareholders while supporting the execution of the Group’s strategic
objectives.
The measures and weightings for 2026 are shown in the table below.
CEO Bonus based on
% of salary
2025
% of salary
2024 CFO Bonus based on
% of salary
2025
% of salary
2024
Operating profit 126.0 105.0 Operating profit 105.0 105.0
Free cash flow
conversion 54.0 45.0
Free cash flow
conversion 45.0 45.0
180.0 150.0 150.0 150.0
The targets are commercially sensitive and therefore will be disclosed in the 2026 Annual Report.
In line with the 2026 Policy, Executive Directors are required to apply 30% of any annual bonus earned
after statutory deductions for the purchase of shares in the Group until the share ownership guideline as
outlined in the Policy is met. Clawback provisions apply.
Long-term incentives
As detailed in the Report of the Committee on pages 87 to 90, LTIP awards for 2026 will be made at 250%
of salary to the CEO and at 220% of salary to the CFO. The increased potential LTIP award is designed to
motivate executives to achieve stretching targets, ensuring strong alignment with the shareholder
outcomes over the long term. The approach to performance condition target setting for the LTIP has
been revised to reflect the enhanced award opportunity.
Vesting will be based on four performance conditions:
Performance condition Weighting
Relative TSR 25.0%
Adjusted EPS pre-property profit 35.0%
Average ROCE 35.0%
Carbon reduction 5.0%
The performance conditions have been subject to modest reweighting from the 2025 award. The
weightings for Adjusted EPS before property profit and average ROCE have been increased from 30% to
Annual Report on Remuneration continued
35% each, reflecting their significance as key performance indicators that are largely within
management’s influence and central to the delivery of strategy. Relative TSR has been reduced from 30%
to 25% to allow for greater emphasis on core financial KPIs. The inclusion of TSR maintains alignment
with shareholder interests and recognises the importance of measuring strategic success through share
price growth.
The ESG measure has been revised to focus exclusively on carbon reduction, with a 5% weighting. This
adjustment reinforces our commitment to carbon reduction as a key component of our strategy and
long-term business resilience, while ensuring all objectives remain externally verifiable and measurable.
We will continue to focus on DEI initiatives and targets across the Group including external reporting
under the FTSE Women Leaders Review and Parker Review.
Relative TSR
The TSR performance condition will continue to be measured against a comparator group consisting of
the constituents of the London Stock Exchange’s FTSE 250 Index excluding investment trusts. As noted
in the Chair’s letter, the comparator group has been further refined to remove the financial services,
resources and energy sectors that are subject to significantly different market factors to the Group.
Consistent with prior years, achieving median performance relative to the peer group will result in a
threshold payout with performance exceeding the 80
th
percentile resulting in a full payout.
Notwithstanding the achievement of the TSR performance conditions, no shares will vest unless the
Committee considers that the overall financial results of the Group have been satisfactory in the
circumstances over the performance period.
Adjusted EPS pre-property profit
The Committee agreed that for the LTIP award in 2026, EPS targets will be based on forecast organic
growth plus potential growth achievable through acquisitions or share buybacks. EPS performance will
be assessed on adjusted EPS for the final year of the performance period, including the impact of
acquisitions and share buybacks. This approach aligns with the methodology adopted by the Committee
when setting the targets for the LTIP award in 2025.
The Committee has set a target range for Adjusted EPS before property profit for 2028 of between 81.14p
at threshold, 88.36p at target and 98.65p at maximum. Performance will be assessed on adjusted EPS
for the final year of the performance period, including the impact of acquisitions and share buybacks.
The Committee believes that this range is aligned with delivery of the Group’s strategic and financial
objectives and represents an appropriately stretching target. 25% of the award will vest if the lower end of
the adjusted EPS target range of 81.14p is achieved. Where adjusted EPS is between the threshold and
target point in the range, between 25% and 50% of this part of the award will vest on a straight-line basis.
Between the target and the maximum target in the range, then between 50% and 100% of this part of the
award will vest on a straight-line basis. The target adjusted EPS range for 2028 is equivalent to annual
compound growth of 4.0% at threshold, 7.0% at target, and 11.0% at maximum applied to the 2025 base
year adjusted EPS excluding property profit and using an underlying 19.5% tax rate which excludes a
credit relating to updated estimates of amounts relating to prior years of 72.13p.
Average ROCE
The Committee has set a target range of 10.0% to 11.5% for the three-year period from 2026 to 2028 for
Average ROCE. The calculation of ROCE will follow that shown in the Alternative Performance Measures
on page 192 which uses the opening and closing year-end balance sheets in the calculation of average
capital employed.
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Corporate Governance
115-190
Financial Statements
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Supplementary Information
GHG emissions reduction
The ESG measure has been refined to focus specifically on carbon targets with a 5% weighting. This
maintains a clear focus on externally verifiable and measurable objectives.
The carbon reduction target will be aligned with the SBTi linear pathway to a 48.5% reduction of GHG
emissions by 2030, measured against a 2021 baseline. The target will be to reduce Scope 1 & 2 GHG
emissions by 45.24% by 31 December 2028 against the 2021 base year.
The amount of the award is determined on a straight-line basis as set out in the table adjacent.
Under the Group’s Science Based Targets Initiative Recalculation Policy, it may be necessary to
recalculate and restate the base year following significant structural changes in the Group. The
Committee will consider the impact of any such recalculation when assessing the outcome of this
performance condition.
Financial targets
25% TSR relative to a
peergroup 35% Adjusted EPS 35% Average ROCE
Ranking
% of element
vesting Performance
% of element
vesting Performance
% of element
vesting
Below threshold
Below
median 0%
Below
81.14p 0%
Below
10.0% 0%
Threshold Median 25% 81.14p 25% 10.0% 25%
Between threshold and
target – –
81.14p-
88.36p 25% -50% – –
Between target and stretch – –
88.36p-
98.65p 50%-100% – –
Between threshold and
stretch
Median-
80
th
percentile 25% -100% – –
10.0%-
11.5% 25%-100%
Stretch or above
Above 80
th
percentile 100%
Above
98.65p 100% 11.5% 100%
ESG target
5% GHG emissions reduction
Performance % of element vesting
Below threshold Below 41.57% 0%
Threshold 41.57% 25%
Between threshold and stretch 41.57%-45.24% 25%-100%
Stretch or above Above 45.24% 100%
Holding period
A holding period of two years will apply to LTIP awards received by Executive Directors that vest, after
taking into account any shares sold to pay tax and other statutory obligations in line with the
Remuneration Policy. Shares held during the two-year holding period will be deemed to be part of an
Executive Directors’ shareholding, for the purposes of monitoring the shareholding guidelines. The
vesting period and the holding period will be five years in total.
Relative importance of spend on pay
The following table sets out the percentage change in dividends, share buybacks and overall spend on
employee pay in the 2025 financial year compared with the prior year.
2025
**
£’000
2024
£000
%
Change
Dividends payable 72,484
*
72,743 (0.4)
Share buybacks 56,612 80,923 (30.0)
Employee remuneration costs 420,801 365,952 15.0
* Based on shares in issue as at 26 February 2026.
** Includes full impact of Salvador Escoda for 2025.
Annual Report on Remuneration continued
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Financial Statements
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Supplementary Information
Annual Report on Remuneration continued
Percentage change in Directors pay
The table below shows the percentage year-on-year change in the value of salary/fees, annual bonus and benefits for all Directors compared to that of the average employee on an annual basis. Change is calculated
using unrounded pay figures in local currency. Mr. David Dillon and Ms. Andrea Gisle Joosen were appointed to the Board on 12 May 2025 and 1 July 2025 respectively.
2025 % change 2024 % change 2023 % change 2022 % change 2021 % change 2020 % change
Salary Benefits Bonus Salary Benefits Bonus Salary Benefits Bonus Salary Benefits Bonus Salary Benefits Bonus Salary Benefits Bonus
E. Born 3.5 (15.7) 5.8 4.0 (16.3) 308.1 – n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
D. Arnold 3.5 10.2 27.0 4.0 (21.3) 308.2 4.4 (5.3) (56.0) 3.1 3.2 (50.0) 5.1 (32.4) 100.0 (3.0) (4.9) (100.0)
I. Tyler – – – n/a – – n/a – – n/a – – n/a – – n/a – –
R. McGuckian
(i)
7.4 – – – – – – – – 3.1 – – 5.3 – – n/a – –
A. Darzins 7.4 – – – – – – – – n/a – – n/a – – n/a – –
M. Robson 12.2 – – – – – n/a – – n/a – – n/a – – n/a – –
D. Dillon n/a – – n/a – – n/a – – n/a – – n/a – – n/a – –
A. Gisle Joosen n/a – – n/a – – n/a – – n/a – – n/a – – n/a – –
Retired directors
(ii)
S. Murray
(iii)
27.7 – – – – – – – – 19.6 – – 5.3 – – (4.5) – –
V. Crowley 7.4 – – – – – – – – 3.1 – – 5.3 – – (4.5) – –
M. Roney – – – – – – – – – 3.1 – – 5.3 – – (4.5) – –
P. Hampden Smith – – – – – – – – – 19.6 – – 5.3 – – (4.5) – –
Average employee
Salary, benefits and
bonus (£)
(iv)
4.65
*
5.2 4.4 4.0 10.4 (7.3)
(i) Dr. McGuckian was appointed Senior Independent Director with effect from 22 October 2025 and was entitled to the Senior Independent Director fee of €13,000 per annum from that date.
(ii) Mrs. Murray and Mr. Crowley stepped down from the Board on 21 October 2025. Mr. Roney and Mr. Hampden Smith stepped down from the Board on 2 May 2024.
(iii) Ms. Murray’s fee increase was 12.2% excluding the Senior Independent Director fee of £11,000 per annum which was introduced from 1 January 2025.
(iv) Based on the average number of persons employed during the year.
* The weighted average salary increase, excluding adjustments for the national minimum wage, for the general workforce in Ireland and the United Kingdom.
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Financial Statements
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Supplementary Information
CEO pay ratio to the workforce
The table below shows the ratio of the CEO’s total remuneration for 2025 and the lower, median and upper quartile full-time equivalent remuneration of the Group’s UK employees. The pay ratios for 2024, 2023,
2022, 2021, 2020 and 2019 are also shown for comparison. Grafton has decided to use Option A as it provides the most statistically accurate method for identifying the pay ratios. Option A requires a company to
calculate the total full-time equivalent pay and benefits of all its UK employees for the relevant financial year (using the same methodology as for CEO pay) in order to identify and rank the 25th, 50th and 75th
percentiles. The total remuneration for employees includes wages and salaries, taxable benefits, bonuses, share-based payments remuneration and pensions.
The period of analysis is between 1 January and 31 December 2025. The total number of UK colleagues included in the 2025 pay ratio analysis was 3,905. The analysis included colleagues employed at
31 December 2025.
Method 25
th
percentile pay ratio 50
th
percentile pay ratio 75
th
percentile pay ratio
2019 Option A 93:1 77:1 59:1
2020 Option A 68:1 57:1 44:1
2021 Option A 138:1 120:1 90:1
2022 Option A 35:1 31:1 26:1
2023 Option A 43:1 37:1 30:1
2024
*
Option A 66:1 58:1 47:1
2025 Option A 81:1 72:1 59:1
25
th
percentile pay ratio 50
th
percentile pay ratio 75
th
percentile pay ratio
Financial year Method Total pay and benefits Total salary Total pay and benefits Total salary Total pay and benefits Total salary
2025 Option A £26,538 £25,350 £29,875 £28,560 £36,114 £33,698
For the purpose of calculating the pay ratio, the CEO’s remuneration is based on the single figure for 2025 of £2,140,226 which includes all remuneration (salary, pension, benefits and LTIP). Details of colleague
bonus payments in respect of 2025 is based on bonuses paid in 2025. This is consistent with the calculation method used in previous years. Consistent with our practice in previous years, next year’s report will be
updated for bonuses paid to colleagues in respect of 2025. The Committee considers the median pay ratio consistent with the Group’s wider policies on employee pay, reward and progression. For example, the
Committee reviewed workforce remuneration including base pay, benefits and incentives which was taken into consideration when deciding the pay of Executive Directors and Senior Management. Changes in total
remuneration for the CEO are largely as a result of the volatile nature of their variable pay and this is reflected in the variation of the total pay ratio over the period.
* The pay ratio reported for 2024 has been recalculated to be based on colleague bonuses paid in respect of 2024 such that it is on a like-for-like basis to the CEO’s single figure calculation.
Annual Report on Remuneration continued
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Sustainability Statement
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Corporate Governance
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Financial Statements
191-198
Supplementary Information
Annual Report on Remuneration continued
Total shareholder return
The graph below compares the TSR performance of Grafton Group plc, assuming dividends are reinvested, with the TSR performance of the FTSE 250 over the period 31 December 2015 to 31 December 2025.
This graph shows the value, by 31 December 2025, of £100 invested in Grafton Group plc on 31 December 2015, compared with the value of £100 invested in the FTSE 250 Index on the same date. This comparator
group was chosen on the basis that the Company is a constituent of the index and it includes comparable sized businesses. The other points plotted are the values at intervening financial year ends.
Performance graph and single total figure of remuneration
150
200
100
50
0
2015 2016 2017 2018 2019 20212020 2022 2023
Grafton Group plc
FTSE 250 index
2024 2025
Single total figure of remuneration
The table below shows the total remuneration figure for the position of CEO over the ten years to 2025.
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
CEO single total figure of
remuneration (£’000) 1,692 1,689 2,211 1,852 1,322 2,876 791
*
1,019 1,649 2,141
Annual bonus payout
relative to maximum 60% 100% 93% 19% 0% 100% n/a 16% 64% 66%
LTIP vesting 50% 26% 72% 95% 30% 100% n/a n/a 13% 30%
* This is the pro-rated single figure of remuneration for the role of CEO. Mr. E. Born was appointed Chief Executive Officer and joined the Board on 28 November 2022. Mr. G. Slark stepped down from the Board on 31 December 2022. No bonus or LTIP was applicable in 2022.
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Financial Statements
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Supplementary Information
Annual Report on Remuneration continued
Statement of shareholder voting
The 2024 Annual Report on Remuneration received the following votes from shareholders at the 2025 AGM:
Total number ofvotes % of votes cast
For 114,547,566 99.36
Against 734,972 0.64
Total 115,282,538 100
The number of votes withheld for the Annual Report on Remuneration was 37,101.
The 2023 Directors Remuneration Policy received the following votes from shareholders at the 2023 AGM:
Total number ofvotes % of votes cast
For 133,960,759 97.88
Against 2,896,246 2.12
Total 136,857,005 100
The number of votes withheld for the Remuneration Policy was 2,160.
Directors’ and Secretary’s interests
The beneficial interests of the Directors in the share capital of the Company were as follows:
Director
31 December 2025
Grafton Shares*
31 December 2024
Grafton Shares
Unvested LTIP
awards**
Unvested SAYE
options***
I. Tyler 1,180 – – –
E. Born 31,739 14,330 506,954 2,462
D. Arnold 157,500 144,000 283,821 2,462
R. McGuckian 5,380 5,380 – –
A. Darzins 2,406 2,406 – –
M. Robson 2,500 2,500 – –
D. Dillon 5,000 – – –
A. Gisle Joosen – – – –
Secretary
S. Lannigan 6,317 5,064 25,550 –
* At 31 December 2025 a Grafton Share consists of one Ordinary Share of €0.05 in Grafton Group plc.
** Vesting of these awards is subject to performance conditions and includes awards granted in 2023, 2024 and 2025.
*** Mr. Born and Mr. Arnold each held options to purchase 1,156 shares at the agreed price at the end of the three year period ending on
1 June 2027 and options to purchase 1,306 shares at the agreed price at the end of the three year period ending on 1 June 2028.
The closing price of a Grafton Share on 31 December 2025 was 936.0p (31 December 2024: 959.70p)
andthe price range during the year was between 1,034.2p and 795.50p (2024: 886.5p and 1,087.0p).
There have been no changes in the interests of the Directors and Secretary between 31 December 2025
and the date of this report.
To further align the interests of senior management with those of shareholders, Executive Directors are
subject to share ownership guidelines. Executive Directors are required to build a holding of shares in the
Company with a minimum value of 200% of their salary. Executive Directors are expected to retain half
ofany shares that vest under the LTIP after taking into account any shares sold to pay tax and other
statutory obligations, until this share ownership requirement is fulfilled. In addition, Executive Directors
are required to apply 30% of their annual bonus after statutory deductions for the purchase of shares
inthe Group until this share ownership requirement is fulfilled.
There is normally a two-year holding period for shares received from LTIP awards that vest. Executive
Directors will normally be expected to maintain a minimum shareholding of 200% of salary (or actual
shareholding if lower) for the two years after stepping down from the Board, unless the Committee
decides otherwise.
Mr. Born held shares at the year end valued at 0.37 times his salary which reflects his relatively recent
appointment as a Director. Mr. Arnold held shares at the year end valued at 3.04 times his salary. This is
based on the closing price of a Grafton Share on 31 December 2025 of 936.0p.
LTIP awards over 4,656 shares granted in November 2022 vested in December 2025 in favour of
Mr.Born. Upon vesting, Mr. Born instructed the Company’s share plan administrators to sell 2,200
ofthese shares immediately to cover tax liabilities and broker commissions, retaining the remaining
2,456 Grafton shares. Mr. Born purchased a total of 14,953 shares during the year, of which 1,253 were
acquired through the Grafton Group plc Employee Share Participation Scheme.
During the year, Mr. Arnold purchased 2,867 Grafton shares and received an additional 9,499 shares upon
the vesting of the 2022 LTIP.
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Financial Statements
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Supplementary Information
Annual Report on Remuneration continued
Directors’ and Secretary’s interests under the Grafton Group plc 2021 Long Term Incentive Plan
The grant of awards over Grafton Shares to the Directors and Secretary under the LTIP are shown below:
Grant date
Share value
applied to award 01-Jan-25 Granted Lapsed Shares received 31-Dec-25 Performance period Vesting date***
E. Born 29 Nov 2022 £9.9325 37,251 – (32,595) (4,656)
*
– 1 Jan 22-31 Dec 24 29 Nov 2025
31 March 2023 £8.87 166,855 – – – 166,855 1 Jan 23-31 Dec 25 1 April 2026
20 March 2024 £9.783 157,334 – – – 157,334 1 Jan 24-31 Dec 26 21 March 2027
19 March 2025 £8.7165 – 182,765 182,765 1 Jan 25-31 Dec 27 19 March 2028
361,440 182,765 (32,595) (4,656) 506,954
D. Arnold 1 April 2022 £9.9325 75,992 – (66,493) (9,499)
**
– 1 Jan 22-31Dec 24 1 April 2025
31 March 2023 £8.87 88,839 – – – 88,839 1 Jan 23-31 Dec 25 1 April 2026
20 March 2024 £9.783 83,770 – – – 83,770 1 Jan 24-31 Dec 26 21 March 2027
19 March 2025 £8.7165 – 111,212 – – 111,212 1 Jan 25-31 Dec 27 19 March 2028
248,601 111,212 (66,493) (9,499) 283,821
S. Lannigan 1 April 2022 £9.9325 2,270 – (2,270) – – 1 Jan 22-31 Dec 24 1 April 2025
31 March 2023 £8.87 2,741 – – – 2,741 1 Jan 23-31 Dec 25 1 April 2026
20 March 2024 £9.783 2,556 – – – 2,556 1 Jan 24-31 Dec 26 21 March 2027
27 Nov 2024 £9.3535 4,802 – – – 4,802 1 Jan 24-31 Dec 26 28 Nov 2027
19 March 2025 £8.7165 – 15,451 – – 15,451 1 Jan 25-31 Dec 27 19 March 2028
12,369 15,451 (2,270) – 25,550
* The market price at the date of vesting was £9.3455.
** The market price at the date of vesting was £8.622.
*** This is the earliest date for vesting. The actual date of vesting is subject to approval by the Remuneration Committee.
The Grafton Group plc 2021 Long Term Incentive Plan was approved by shareholders at the Annual General Meeting of the Company held on 28 April 2021 and the first awards made under the Plan were
on17 May2021.
Andrea Gisle Joosen
Chair of the Remuneration Committee
4 March 2026
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Supplementary Information
Report of the Directors
Group results
Group revenue increased by 10.4% to £2.52bn from
£2.28bn in 2024. Statutory operating profit (before
the exceptional profit on disposal) was £166.7m
(2024: £152.6m). Adjusted operating profit of
£190.2m was up 7.1% from £177.5m last year.
Net finance expense was £9.7m (2024: net finance
income of £0.1m). The net finance expense
incorporates an interest charge of £15.2m
(2024: £15.0m) on lease liabilities recognised
under IFRS 16.
The income tax expense of £28.6m (2024: £30.5m)
is equivalent to an effective tax rate (before the
exceptional profit on disposal) of 18.2% of profit
before tax (2024: 20.0%). The rate after including
the exceptional profit on disposal is lower at 17.3%
(2024: 20.0%).
Basic earnings per share was 70.3 pence
(2024: 60.9 pence). Adjusted earnings per share
was 75.4 pence (2024: 71.8 pence).
The Group and Company financial statements for
the year ended 31 December 2025 are set out in
detail on pages 115 to 190 and are deemed to be
incorporated in this part of the Report of the
Directors together with the Supplementary
Information on pages 191 to 198.
Dividends
A final dividend for 2024 of 26.50 pence per
ordinary share was paid on 15 May 2025 to
shareholders on the register of members at the
close of business on 22 April 2025.
An interim dividend for 2025 of 10.75 pence per
ordinary share was paid on 10 October 2025 to
shareholders on the register of members at the
close of business on 12 September 2025.
A final dividend for 2025 of 27.00 pence per
ordinary share is proposed for approval by
shareholders at the AGM on 15 May 2026 and, if
approved, will be paid on 21 May 2026 to
shareholders on the register of members at the
close of business on 24 April 2026, the record date.
The ex-dividend date is 23 April 2026.
Review of the business
Shareholders are referred to the Chair’s Statement,
Chief Executive Officer’s Review, Operating Review
and Financial Review and all reports and
information included in the Strategic Report on
pages 2 to 42 which includes a review of
operations and the financial performance of the
Group for 2025, the outlook for 2026 and the key
performance indicators used to assess the
performance of the Group. These are deemed to
be incorporated in the Report of the Directors.
Cautionary statement
Certain statements made in this Annual Report are
forward-looking statements. Such statements are
based on current expectations and are subject to a
number of risks and uncertainties that could cause
actual events or results to differ materially from
those expressed or implied by these forward-
looking statements. They appear in a number of
places throughout this Annual Report and include
statements regarding the intentions, beliefs or
current expectations of Directors and senior
management concerning, amongst other things,
the results of operations, financial conditions,
liquidity, prospects, growth rate and potential
growth opportunities, potential operating
performance improvements, the effects of
competition and the strategy of the overall Group
and its individual businesses. You should not place
undue reliance on forward-looking statements.
These forward-looking statements are made as at
the date of this Directors’ Report. The Company
and its Directors expressly disclaims any obligation
to update or revise any forward-looking
statements, whether as a result of new
information, future developments or otherwise,
except as required by law.
The principal risks and uncertainties included on
pages 33 to 38 of this Annual Report could cause
the Group’s results to differ materially from those
expressed in forward-looking statements. There
may be other risks and uncertainties that the
Group is unable to predict at this time or that the
Group currently does not expect to have a material
adverse effect on its business. These forward-
looking statements are made as of the date of this
Annual Report.
Board of Directors
Under the Company’s Articles of Association,
Directors are required to submit themselves to
shareholders for election at the Annual General
Meeting following their appointment and all
Directors are required to submit themselves for
re-election at intervals of not more than three
years.
However, in line with the provisions contained in
the UK Corporate Governance Code, all Directors
retired and being eligible offered themselves for
re-election at the 2025 Annual General Meeting
(AGM). All Directors going forward for re-election
were re-elected to the Board on the same day.
The Board has decided that all Directors should
retire at the 2026 Annual General Meeting and
offer themselves for election/re-election.
Share capital
As at 31 December 2025, the share capital of the
Company consists of ordinary shares of euro five
cent each in Grafton Group plc. The composition
of the Company’s share capital is set out in Note
18 on page 155.
The Group has in place a number of employee
share schemes, the details of which are set out in
the Report of the Remuneration Committee on
Directors’ Remuneration and in Note 31 to the
Group Financial Statements.
Annual General Meeting
The AGM of the Company will be held at the Irish
Management Institute (IMI) Sandyford Road,
Dublin, D16 X8C3, Ireland at 10.30am on Friday
15 May 2026. The Notice of Meeting for the 2026
AGM will be made available on the Group’s website,
www.graftonplc.com. The resolutions to be
considered at the Annual General Meeting are
summarised below.
Financial statements
To receive and consider the Company’s financial
statements for the year ended 31 December 2025
together with the reports of the Directors and the
Auditors.
Final dividend
Shareholders are being asked to declare a final
dividend of 27.00 pence per Ordinary Share for the
year ended 31 December 2025 payable on 21 May
2026 to the holders of Ordinary Shares on the
register of members at close of business on
24 April 2026.
Election/Re-election of Directors
To elect/re-elect all the Directors of the Company.
Continuation in office of auditors
While it is not required under Irish law, an advisory,
non-binding resolution is being presented in
relation to the continuation of PwC in office as
Auditors.
Remuneration of the auditors
As required under Section 381(1)(b) of the
Companies Act 2014, a resolution is being
presented authorising the Directors to fix the
remuneration of the Auditors.
Report of the Remuneration Committee
on Directors’ remuneration
The Board is proposing to submit the Chair’s
Annual Statement, and the Annual Report on
Remuneration of the Remuneration Committee, as
set out on pages 87 to 90 and 99 to 111, to a
non-binding advisory vote.
2026 Remuneration Policy
In line with best practice, the Board is proposing to
submit a new Remuneration Policy which is set out
on pages 91 to 98 to a non-binding advisory vote. It
is the Company’s intention that this policy will
apply until the 2029 AGM unless the Remuneration
Committee seeks approval from shareholders to
adopt a new policy at an earlier date.
The Directors present their report to the shareholders together with the
audited financial statements for the year ended 31 December 2025.
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Notice Period for Extraordinary General
Meetings
This resolution will, if adopted, maintain the
existing authority in the Articles of Association
which permits the Company to convene an
extraordinary general meeting on 14 days’ notice in
writing where the purpose of the meeting is to
consider an ordinary resolution. As a matter of
policy, the 14 days’ notice will only be utilised
where the Directors believe that it is merited by the
business of the meeting and the circumstances
surrounding the business of the Meeting.
Authority to allot relevant securities
Shareholders are being asked to renew the
Directors’ authority to allot and issue any unissued
ordinary share capital of the Company. The total
number of shares which the Directors may issue
under this authority will be limited to one third of
the issued share capital of the Company. The
Directors have no present intention to make a
share issue other than in respect of employee
share schemes.
Disapplication of pre-emption rights
At each Annual General Meeting, the Directors
seek authority to disapply statutory pre-emption
rights in relation to allotments of shares for cash
up to an aggregate nominal value for all allotments
and all treasury shares representing five per cent
of the nominal value of the issued ordinary share
capital of the Company as at the date of the Notice
of Annual General Meeting. Under the Articles of
Association, shareholders are required to renew
this power at each year’s Annual General Meeting.
Authority to make market purchases of the
Company’s own shares
At the 2025 Annual General Meeting, shareholders
gave the Company and/or any of its subsidiaries
authority to make market purchases of up to 10
per cent of the Company’s own shares.
Shareholders are being asked to renew this
authority.
The Directors consider it appropriate to maintain
the flexibility that this authority provides. The
Directors monitor the Company’s share price and
may from time to time exercise this power to make
market purchases of the Company’s own shares,
at price levels which they consider to be in the best
interests of the shareholders generally, after taking
account of the Company’s overall financial
position. The minimum price which may be paid
for any market purchase of the Company’s own
shares will be the nominal value of the shares and
the maximum price which may be paid will be
105% of the then average market price of the
shares.
Authority to reissue treasury shares
Shareholders are being asked to sanction the price
range at which any treasury share (that is a share
of the Company redeemed or purchased and held
by the Company rather than being cancelled) may
be re-issued other than on the Stock Exchange.
The maximum and minimum prices at which such
a share may be reissued are 120% and 95%
respectively of the average market price of a share
calculated over the five business days immediately
preceding the date of such reissue.
The authorities which will be sought at the
forthcoming AGM to allot relevant securities,
disapply pre-emption rights, purchase the
Company’s Units and reissue treasury shares will,
if granted, expire on the earlier of the date of the
Annual General Meeting in 2027 or 15 months after
the passing of these resolutions.
Amendment of the Company’s Long Term
Incentive Plan
Shareholders are being asked to approve an
amendment to the Rules of the Grafton Group plc
2021 Long Term Incentive Plan to increase the
limit on an individual award from 200% of a
person’s base salary to 250% of a person’s base
salary, in line with the proposal in the
Remuneration Policy. It is also proposed that the
Rules be updated to remove the 5% dilution limit in
line with market practice.
Report of the Directors continued
Substantial holdings
So far as the Company is aware, the following held shares representing three per cent or more of the
ordinary share capital of the Company (excluding treasury shares) at 31 December 2025 and 26 February
2026:
31 December 2025 26 February 2026
Name
Holding % Holding %
Mr. Michael Chadwick 21,776,410 11.38 21,776,410 11.38
GLG Partners LP 11,544,495 6.03 11,527,269 6.02
Blackrock, Inc. 11,178,215 5.84 11,542,523 6.03
Dimensional Fund Advisors LP 10,381,584 5.43 10,381,584 5.43
Vanguard Group, Inc. 9,816,265 5.13 9,822,549 5.13
The Capital Group Companies, Inc. 7,650,223 4.00 7,650,223 4.00
abdrn plc 6,003,930 3.14 5,737,811 3.00
JPMorgan Asset Management (UK) Limited 5,681,867 2.97 5,681,867 2.97
Apart from these holdings, the Company has not been notified at 26 February 2026 or at 31 December
2025 of any interest of three per cent or more in its ordinary share capital.
Directors’ and Secretary’s interests in the share capital of the Company are set out in the Report of the
Remuneration Committee on Directors’ Remuneration on page 110.
Accounting records
The Directors are responsible for ensuring that adequate accounting records are maintained by the
Company as required by Sections 281-285 of the Companies Act, 2014. The Directors believe that they
have complied with this requirement by providing adequate resources to maintain proper books and
accounting records throughout the Group including the appointment of personnel with appropriate
qualifications, experience and expertise. The books and accounting records of the Company are
maintained at The Hive, Carmanhall Road, Sandyford Business Park, Sandyford, Dublin 18, Ireland.
Takeover regulations 2006
The capital structure of the Company is detailed in Note 18 to the Group Financial Statements. Details of
employee share schemes are set out in Note 31. In the event of a change of control, the vesting/
conversion/exercise of share entitlements/options may be accelerated. The Group’s borrowing facilities
may be required to be repaid in the event of a change of control. The Company’s Articles of Association
provide that the business of the Company shall be managed by the Directors, who may exercise all such
powers of the Company subject to the Companies Act and the Articles of Association. Details of the
powers of the Directors in relation to the issuing or buying back by the Company of its shares are set out
above. The Company’s Memorandum and Articles of Association, which are available on the Company’s
website, www.graftonplc.com, are deemed to be incorporated in this part of the Report of the Directors.
Corporate governance regulations
As required by company law, the Directors have prepared a Report on Corporate Governance which is set
out on pages 71 to 80 and which, for the purposes of Section 1373 of the Companies Act 2014, is
deemed to be incorporated in this part of the Report of the Directors. This includes the Report of the
Audit and Risk Committee. Details of the capital and employee share schemes are included in Notes 18
and 31 respectively.
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Directors’ compliance statement
It is the policy of the Company to comply with its relevant obligations as defined in the Companies Act
2014. The Directors have drawn up a compliance policy statement as defined in section 225(3)(a) of the
Companies Act 2014. Arrangements and structures have been put in place that are, in the Directors’
opinion, designed to secure a material compliance with the Company’s relevant obligations. These
arrangements and structures were reviewed by the Company during the financial year. As required by
section 225(2) of the Companies Act 2014, the Directors acknowledge that they are responsible for the
Company’s compliance with its relevant obligations. In discharging their responsibilities under section
225, the Directors relied on the advice of third parties who they believe have the requisite knowledge and
experience to advise the Company on compliance with its relevant obligations.
Principal risks and uncertainties
The Company is required under Irish company law to give a description of the principal risks and
uncertainties. These principal risks and uncertainties are set out on pages 33 to 38 and are deemed to be
incorporated in this section of the Report of the Directors.
Non -Financial Statement – European Union (disclosure of non-financial and diversity
information by certain large undertakings and groups) regulations 2017
The following are deemed to be incorporated in this part of the Report of the Directors:
Reporting requirement Location of information Page
Environmental matters Sustainability Statement – environmental disclosures 43 to 70
Key performance indicators 18
Social and employee
matters
Sustainability Statement – Social disclosures 59 to 66
Stakeholder engagement 19 and 20
Note 11 to the Group Financial Statements 147
Note 6 to the Group Financial Statements 144 and 145
Diversity Sustainability Statement – Social disclosures 59 to 66
Key performance indicators 18
Nomination Committee Report 84 to 86
Human rights Sustainability Statement – Social disclosures 59 to 66
Anti-bribery and
corruption
Sustainability Statement – Governance disclosures 67 and 68
Audit and Risk Committee Report 81 to 83
Business model Business model 9
Non-financial KPIs Key performance indicators 18
Sustainability statement – Environmental disclosures 50 to 58
Principal risks Risk management 33 to 38
Financial instruments Note 21 to the Group Financial Statements 160 to 166
Report of the Directors continued
Subsidiaries
The Group’s principal operating subsidiary undertakings are set out on page 185.
Political contributions
There were no political contributions which require disclosure under the Electoral Act, 1997.
Events after the balance sheet date
There have been no material events subsequent to 31 December 2025 that would require adjustment to
or disclosure in this report.
Auditor
The statutory Auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office in
accordance with Section 382 (2) of the Companies Act 2014 and a resolution authorising the Directors to
fix their remuneration will be submitted to the Annual General Meeting.
Disclosure of information to statutory auditors
In accordance with the provisions of section 330 of the Companies Act 2014, each of the persons who
are Directors of the Company at the date of approval of this report confirms that:
• So far as the Director is aware, there is no relevant audit information (as defined in the Companies Act
2014) of which the statutory Auditor is unaware; and
• The Director has taken all the steps that he/she ought to have taken as a Director to make himself/
herself aware of any relevant audit information (as defined) and to ensure that the statutory Auditor is
aware of such information.
On behalf of the Board.
Eric Born David Arnold
Director Director
4 March 2026
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Directors’ responsibilities statement
The Directors are responsible for preparing the
Annual Report and the Group and Company
financial statements, in accordance with
applicable law and regulations.
Irish law requires the Directors to prepare Group and
Company financial statements for each financial
year. Under that law, the Directors have prepared the
Group financial statements in accordance with
International Financial Reporting Standards as
adopted by the European Union (IFRS) and have
prepared the Company financial statements in
accordance with Generally Accepted Accounting
Practice in Ireland (accounting standards issued by
the Financial Reporting Council of the UK, including
Financial Reporting Standard 101 Reduced
Disclosure Framework and Irish law).
Under company law the Directors shall not approve
the financial statements unless they are satisfied that
they give a true and fair view of the assets, liabilities
and financial position of the Group and Company as
at the end of the financial year and of the profit or
loss of the Group for the financial year.
In preparing these financial statements, the Directors
are required to:
• select suitable accounting policies and then
apply them consistently;
• make judgements and estimates that are
reasonable and prudent;
• state whether the Group financial statements
have been prepared in accordance with IFRS as
adopted by the European Union, and as regards
the Company, have been prepared in accordance
with Generally Accepted Accounting Practice in
Ireland (accounting standards issued by the
Financial Reporting Council of the UK, including
Financial Reporting Standard 101 Reduced
Disclosure Framework and Irish law); and
• prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the Group and the Company will
continue in business.
The Directors are also required by the Companies Act
2014 and the Listing Rules to include a report
containing a fair review of the business and a
description of the principal risks and uncertainties
facing the Group.
The Directors are responsible for keeping adequate
accounting records that are sufficient to:
• correctly record and explain the transaction of
the Group and Company;
• enable, at any time, the assets, liabilities, and
financial position and profit or loss of the Group
and Company to be determined with reasonable
accuracy; and
• enable the Directors to ensure that the financial
statements comply with the provisions of the
Companies Act 2014 and enable those financial
statements to be audited.
The Directors are also responsible for safeguarding
the assets of the Company and the Group, and hence
for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for the maintenance
and integrity of the corporate and financial
information included on the Company’s website
(www.graftonplc.com). Legislation in Ireland
concerning the preparation and dissemination of
financial statements may differ from legislation in
other jurisdictions.
Responsibilities Statement as required by
the Listing Rules and the UK Corporate
Governance Code
Each of the Directors, whose names and functions
are listed on pages 72 and 73 of this Annual Report,
confirm that, to the best of each person’s knowledge
and belief:
• the Group financial statements, prepared in
accordance with IFRS as adopted by the
European Union and the Company financial
statements prepared in accordance with
Generally Accepted Accounting Practice in
Ireland (accounting standards issued by the
Financial Reporting Council of the UK, including
Financial Reporting Standard 101 Reduced
Disclosure Framework and Irish law), as applied
in accordance with the provisions of the
Companies Act 2014, give a true and fair view of
the assets, liabilities, and financial position of the
Group and Company at 31 December 2025 and
of the profit of the Group for the year then ended;
• the Report of the Directors contained in the
Annual Report includes a fair review of the
development and performance of the business
and the position of the Group and that a fair
description of the principal risks and
uncertainties faced by the Group is provided on
pages 33 to 38; and
• the Annual Report and Accounts 2025, taken as a
whole, provides the information necessary for
shareholders to assess the Company’s and
Group’s position and performance, business
model and strategy and is fair, balanced and
understandable.
On behalf of the Board
Eric Born David Arnold
Director Director
4 March 2026
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Independent auditors’ report to the members of Grafton Group plc
Report on the audit of the financial statements
Opinion
In our opinion:
• Grafton Group plc’s group financial statements and company financial statements (the “financial statements”) give a true and fair view of the group’s and the company’s
assets, liabilities and financial position as at 31 December 2025 and of the group’s profit and the group’s cash flows for the year then ended;
• the group financial statements have been properly prepared in accordance with International Financial Reporting Standards (“IFRSs”) as adopted by the European Union;
• the company financial statements have been properly prepared in accordance with Generally Accepted Accounting Practice in Ireland (accounting standards issued by the
Financial Reporting Council of the UK, including Financial Reporting Standard 101 “Reduced Disclosure Framework” and Irish law); and
• the financial statements have been properly prepared in accordance with the requirements of the Companies Act 2014.
We have audited the financial statements, included within the Annual Report and Accounts 2025 (the “Annual Report”), which comprise:
• the Group and Company Balance Sheets as at 31 December 2025;
• the Group Income Statement and Group Statement of Comprehensive Income for the year then ended;
• the Group Cash Flow Statement for the year then ended;
• the Group and Company Statements of Changes in Equity for the year then ended; and
• the notes to the financial statements, which include a description of the accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (“ISAs (Ireland)”) and applicable law. Our responsibilities under ISAs (Ireland) are
further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in Ireland, which includes IAASA’s
Ethical Standard as applicable to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
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Our audit approach
Overview
Audit scope
• We conducted an audit of the complete financial information of 10 of the group’s 17 reporting components across the United Kingdom, Ireland, the Netherlands, Finland
and Spain. Certain central functions were audited by the group audit team. In addition, specific audit procedures on certain balances and transactions were also performed
at four of the remaining reporting components primarily to ensure appropriate audit coverage. Overall, these accounted for in excess of 90% of the group’s revenue, in
excess of 85% of the group’s profit before tax and in excess of 90% of the group’s total assets.
Key audit matters
• Valuation of Goodwill for UK Distribution Group of Cash Generating Units (CGUs) as at 30 September 2025
• Completeness and accuracy of rebate income and valuation of rebate receivables
• Valuation of inventory
Materiality
• Overall group materiality: £7.5 million (2024: £7.4 million) based on c. 5% of profit before tax excluding property profits and exceptional items (2024: c. 5% of profit before
tax excluding property profits).
• Overall company materiality: €8.1 million (2024: €8.5 million) based on c. 0.4% of total assets.
• Performance materiality: £5.6 million (2024: £5.5 million) (group) and €6.0 million (2024: €6.3 million) (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the
directors made subjective judgements, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are
inherently uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by
the directors that represented a risk of material misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial statements of the current period and
include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest effect on:
the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the
results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Independent auditors’ report to the members of Grafton Group plc continued
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Key audit matter How our audit addressed the key audit matter
Valuation of Goodwill for UK Distribution Group of Cash Generating Units (CGUs) as at
30 September 2025
Refer to Note 1 “Summary of Material Accounting Policies”, Note 2 “Segment Information”,
Note 12 “Goodwill” and Note 32 “Accounting Estimates and Judgements”.
As at 31 December 2025, goodwill amounted to £659.1 million.
As set out in Note 2, effective 1 October 2025, the group changed its operating segments to a
geographical basis being Island of Ireland, Great Britain, Northern Europe and Iberia. In
accordance with IFRS a reorganisation of operating segments that changes the composition
of one or more CGUs to which goodwill has been allocated requires that the goodwill be
reallocated to the CGUs affected.
As set out in Note 12, management had previously identified limited headroom in the former
UK Distribution group of CGUs between the value-in-use (VIU) and its carrying amount. There
were indicators of impairment in that group of CGUs in advance of the reallocation of goodwill
to the enlarged Great Britain group of CGUs and therefore an impairment assessment was
performed as at 30 September.
The test for impairment of goodwill as at 30 September 2025 was performed using a VIU
model as set out in Note 12 to the financial statements, and involved a number of areas of
judgement and estimation. In particular determining key assumptions for revenue growth rate
and operating margin in the years 2026 to 2030, long-term growth rates used in estimating
cash flows for the purposes of calculating a terminal value, and pre-tax discount rates.
The cash flows included in the VIU model for the former UK Distribution group of CGUs are
those included in management’s forecast (as at October 2025) for Q4 of 2025, the Board
approved budget for 2026, and management forecasts for 2027 to 2030. The terminal value
was calculated using a long-term nominal growth rate in respect of the years after 2030.
While management determined there to be no impairment of goodwill, the assessment
demonstrated that the headroom of VIU over its carrying value was limited and therefore
sensitive to changes in assumptions.
We determined the valuation of Goodwill for the former UK Distribution group of CGUs as at
30 September 2025 to be a Key Audit Matter due to:
• the complexity and judgement involved;
• the limited headroom between the VIU of the former UK Distribution group of CGUs and its
carrying amount as at 30 September 2025; and
• the changes made to the group’s operating segments on 1 October 2025 and corresponding
changes to the composition of the groups of CGUs from that date resulting in goodwill of
the former UK Distribution group of CGUs being monitored at the level of the enlarged Great
Britain group of CGUs. The VIU model for the enlarged Great Britain group of CGUs is less
sensitive to changes in assumptions given the higher level of headroom, compared to that
for the UK Distribution group of CGUs on a standalone basis before the change.
We agreed the underlying cash flow forecasts included in the VIU model for the former UK
Distribution group of CGUs as at 30 September 2025 to the Board approved budget and
management forecasts and checked the mathematical accuracy of the model.
We considered the reliability of management’s forecasting process by considering how actual
results compared to budgets and forecasts historically.
We critically assessed and challenged management on the key assumptions included in the
model, in particular the revenue growth and operating margin assumptions over the period
2026 to 2030.
We compared the revenue growth rate assumptions to external economic and industry
forecasts. We assessed the appropriateness of forecast operating margins through
comparison to actual historic margins achieved and considered current market conditions.
We assessed the appropriateness of the forecast long-term growth rate used to calculate
terminal value by comparing it to independent sources.
With assistance from our in-house valuation experts, we considered the appropriateness of
the discount rate applied to the former UK Distribution group of CGUs by determining an
acceptable range of discount rates using observable inputs from independent external
sources.
We performed sensitivity analyses on the impact of changes in key inputs and assumptions
on the goodwill impairment assessment for the former UK Distribution group of CGUs,
focussing on the revenue growth rates, operating margin assumptions, discount rate and the
long-term growth rate assumed by management.
Based on the results of these procedures we are satisfied that management’s conclusion that
no impairment charge was required as at 30 September 2025, is reasonable.
We also assessed the appropriateness of the related disclosures within the financial
statements.
Independent auditors’ report to the members of Grafton Group plc continued
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Key audit matter How our audit addressed the key audit matter
Completeness and accuracy of rebate income and valuation of rebate receivables
Refer to Note 1 “Summary of Material Accounting Policies”, Note 17a “Trade and Other
Receivables” and Note 32 “Accounting Estimates and Judgements”.
The group has entered into rebate arrangements with a significant number of its suppliers.
Supplier rebates received and receivable in respect of goods purchased are deducted from
cost of sales in the income statement, or the cost of inventory to the extent that those goods
remain in inventory at the year end.
Due to the nature of the agreements in place, a portion of the group’s supplier rebate income
recognised during the year is not finalised or received until after the year end. In addition, in
certain businesses of the group, the process for calculating rebate income is of a manual
nature and involves the use of spreadsheets.
We determined this to be a key audit matter as the calculation of supplier rebates recognised
in the year and the rebates receivable at 31 December 2025 involves both the use of
estimates and manual calculations and is material to the performance and financial position
of the group.
We assessed the reasonableness of the estimates made by management in the calculation of
rebate income and rebate receivables.
We recalculated, on a sample basis, rebate income recognised during the year and year end
receivables by reference to supplier agreements and purchases reports.
For a sample of suppliers, we independently obtained external confirmation of rebate income
and rebates due at 31 December 2025. Where responses were not received, we performed
alternative procedures including obtaining rebate agreements and re-computing rebate
income and rebate receivables.
We also considered the actual results of the collection of rebates during the year, including
those relating to the prior year, and after the year end, comparing the amount collected to the
related estimated rebates receivable balance.
We concluded that the amounts recognised were reasonable.
We assessed the appropriateness of the related disclosures within the financial statements.
Valuation of inventory
Refer to Note 1 “Summary of Material Accounting Policies”, Note 16 “Inventories” and Note 32
“Accounting Estimates and Judgements”.
Inventory, net of provisions at 31 December 2025 amounted to £395.1 million. The inventory
provision at 31 December 2025 was £67.8 million. The group holds a significant number of
product lines across its branch network in the UK, Ireland, the Netherlands, Finland and Spain.
Significant judgement is exercised by management in assessing the level of inventory
provision in respect of slow-moving or obsolete inventory.
Management assesses the required level of provision based on a model that reflects the age
of inventory on hand at year end and other considerations in respect of specific inventory.
Where inventory on which rebates have been earned is held at the year end, an appropriate
rebate deduction is made from the gross carrying value of that inventory.
We determined this to be a key audit matter due to the judgement involved in estimating the
inventory provisions across multiple product lines and locations.
We tested the accuracy of inventory ageing reports where they supported the calculation of
inventory provisions by selecting a sample of inventory items on hand and testing the aged
classification by reference to purchase documentation.
We recomputed provisions recorded to assess whether they were in line with group policy. We
assessed the appropriateness of group policy by reference to the nature, ageing and level of
inventory held at year end. We also obtained an understanding from management of plans to
liquidate slower moving inventory and we considered the appropriateness of provisions made.
We recalculated on a sample basis the rebates allocated to inventory held at year end, by
reference to rebate arrangements applying to those purchases.
We concluded that the valuation of inventory was reasonable.
We assessed the appropriateness of the related disclosures within the financial statements.
Independent auditors’ report to the members of Grafton Group plc continued
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43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the
structure of the group and the company, the accounting processes and controls, and the industry in which they operate.
The group financial statements are a consolidation of 17 reporting components across the United Kingdom, Ireland, the Netherlands, Finland and Spain. The group’s
accounting process is structured around a local finance function for each of the reporting components. These functions maintain their own accounting records and controls
and report to the head office finance team in Dublin.
In establishing the scope of the group audit, we identified three reporting components as significant, which in our view required an audit of their complete financial
information due to their size and financial significance to the group. A further seven reporting components were selected for an audit of their complete financial information
based on their risk characteristics or size and to ensure appropriate audit coverage. Specific audit procedures on certain balances and transactions were performed at four of
the remaining reporting components primarily to ensure appropriate audit coverage.
The group audit team performed the audit of certain central functions. These procedures included, amongst others, procedures over post-retirement benefits, business
combinations acquisition accounting, valuation of investment properties, the consolidation process and impairment testing of goodwill.
The components subject to an audit of their full financial information, central functions audited by the group audit team, and components subject to specific audit
procedures on certain balances and transactions accounted for in excess of 90% of the group’s revenue, in excess of 85% of the group’s profit before tax and in excess of 90%
of the group’s total assets. The group audit team was responsible for the scope and direction of the audit process. The group audit team performed the work on four
components. PwC ROI and other PwC network firms performed work on nine components and one component was audited by a non-PwC network firm, operating under our
instruction. Where the work was performed by component auditors, we determined the level of involvement we needed to have in the audit work at those reporting
components to be able to conclude whether sufficient appropriate audit evidence had been obtained as a basis for our opinion on the group financial statements as a whole.
We obtained and considered the detailed findings reports from all component teams. In addition, the group engagement team also reviewed certain audit working papers in a
number of component audit files. The group audit team also attended the full scope and specified procedures scope component audit closing meetings with local
management by video conference or in person. Separate post audit conference calls were held with a number of component audit teams to discuss their findings. As part of
our audit, we made enquiries of management to understand their assessment of the potential impact of climate change risk on the judgements and estimates used in the
group’s financial statements. Management considers that the impact of climate change does not give rise to a material financial statement impact. We used our knowledge of
the group to evaluate management’s assessment. In particular, we considered how climate change risks could impact the assumptions made in the forecasts prepared by
management. We also considered the consistency of the disclosures in relation to climate change made in the other information within the Annual Report with the financial
statements and our knowledge from our audit.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in
evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
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Supplementary Information
Group financial statements Company financial statements
Overall
materiality
£7.5 million (2024: £7.4 million). €8.1 million (2024: €8.5 million).
How we
determined it
Based on c. 5% of profit before tax excluding property profits and exceptional
items (2024: c. 5% of profit before tax excluding property profits).
Based on c. 0.4% of total assets.
Rationale for
benchmark applied
We have applied this benchmark as profit before tax is a key accounting
benchmark, which is also a key performance indicator for the group. Given the
property profit and exceptional items are not related to the ongoing trading
activities we have excluded these in determining the benchmark.
We considered total assets to be the most relevant benchmark as the company
is primarily an investment holding company that holds investments in
subsidiaries and receivables from group companies.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall
materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of
transactions and disclosures, for example in determining sample sizes. Our performance materiality was 75% (2024: 75%) of overall materiality, amounting to £5.6 million
(2024: £5.5 million) for the group audit and €6.0 million (2024: €6.3 million) for the company audit.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and aggregation risk and the effectiveness of
controls - and concluded that an amount at the upper end of our normal range was appropriate.
We agreed with those charged with governance that we would report to them misstatements identified during our audit above £360,000 (group audit) (2024: £350,000) and
€405,000 (company audit) (2024: €425,000) as well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt the going concern basis of accounting included:
• evaluating management’s budgets and forecasts for the going concern assessment period (being the period of at least twelve months from the date on which the financial
statements are authorised for issue) and challenging the key assumptions. In evaluating these forecasts we considered the group’s historic performance, its past record of
achieving strategic objectives and its forecast financial performance and liquidity for the going concern assessment period.
• We also considered whether the assumptions underlying the budget and forecasts were consistent with related assumptions used in other areas of the entity’s business
activities, for example in testing for goodwill impairment; assessed liquidity through the going concern assessment period including considering the group’s available
financing and maturity profile of facilities; tested the mathematical integrity of the budgets and forecasts and reconciled these to Board approved budgets and forecasts;
and reperformed management’s sensitivity analysis to assess appropriate downside scenarios.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant
doubt on the group’s or the company’s ability to continue as a going concern for a period of at least twelve months from the date on which the financial statements are
authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
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Supplementary Information
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group’s or the company’s ability to continue as a going
concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the
directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting.
We are required to report if the directors’ statement relating to going concern in accordance with Rule 6.6.6(3) (a) of the Listing Rules of the UK Financial Conduct Authority is
materially inconsistent with our knowledge obtained in the audit. We have nothing to report in respect of this responsibility.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The directors are responsible
for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the
extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material
inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report based on these responsibilities.
With respect to the Report of the Directors, we also considered whether the disclosures required by the Companies Act 2014 (excluding the information included in the “Non
Financial Statement” as defined by that Act on which we are not required to report) have been included.
Based on the responsibilities described above and our work undertaken in the course of the audit, ISAs (Ireland) and the Companies Act 2014 require us to also report certain
opinions and matters as described below:
• In our opinion, based on the work undertaken in the course of the audit, the information given in the Report of the Directors (excluding the information included in the “Non
Financial Statement” on which we are not required to report) for the year ended 31 December 2025 is consistent with the financial statements and has been prepared in
accordance with the applicable legal requirements.
• Based on our knowledge and understanding of the group and company and their environment obtained in the course of the audit, we did not identify any material
misstatements in the Report of the Directors (excluding the information included in the “Non Financial Statement” on which we are not required to report).
Corporate Governance Statement
The Listing Rules and ISAs (Ireland) require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the Corporate Governance
Statement relating to the company’s compliance with the provisions of the UK Corporate Governance Code (the “Code”) specified for our review. Our additional responsibilities
with respect to the Corporate Governance Statement as other information are described in the Reporting on other information section of this report.
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Supplementary Information
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent
with the financial statements and our knowledge obtained during the audit, and we have nothing material to add or draw attention to in relation to:
• The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an explanation of how these are being
managed or mitigated;
• The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of accounting in preparing them, and
their identification of any material uncertainties to the group’s and company’s ability to continue to do so over a period of at least twelve months from the date of approval
of the financial statements;
• The directors’ explanation as to their assessment of the group’s and company’s prospects, the period this assessment covers and why the period is appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the company will be able to continue in operation and meet its liabilities as they fall due over
the period of its assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the group was substantially less in scope than an audit and only consisted of making inquiries and
considering the directors’ process supporting their statement; checking that the statement is in alignment with the relevant provisions of the UK Corporate Governance Code;
and considering whether the statement is consistent with the financial statements and our knowledge and understanding of the group and company and their environment
obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially
consistent with the financial statements and our knowledge obtained during the audit:
• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the information necessary for the
members to assess the group’s and company’s position, performance, business model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
• The section of the Annual Report describing the work of the audit committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s compliance with the Code does not properly
disclose a departure from a relevant provision of the Code specified under the Listing Rules for review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Directors’ Responsibilities Statement set out on page 115, the directors are responsible for the preparation of the financial statements in
accordance with the applicable framework and for being satisfied that they give a true and fair view.
The directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability to continue as a going concern, disclosing as
applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the company or to
cease operations, or have no realistic alternative but to do so.
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Financial Statements
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Supplementary Information
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and
to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect
material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed
below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and regulations related to health and safety, and we
considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct
impact on the preparation of the financial statements such as the Companies Act 2014 and relevant tax legislation. We evaluated management’s incentives and opportunities
for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to inappropriate journals
that adjust revenue and management bias in significant accounting estimates and judgements. Audit procedures performed by the engagement team included:
• Enquiring of senior management (group and operating entities), directors, members of the Audit and Risk Committee and Internal Audit of their assessment of the potential
fraud risk and their assessment of controls and any incidences of fraud during the year;
• Evaluating the group’s programme and controls designed to address fraud risk;
• Considering remuneration incentive schemes and performance targets for directors and senior management in our assessment of fraud risk;
• Using analytical procedures to identify any unusual or unexpected account balances;
• Assessing whether the judgements regarding key accounting estimates are indicative of a potential bias;
• For all components subject to an audit of their full financial information, identifying journal entries to test based on risk criteria including manual journals posted to adjust
revenue, and testing the identified entries;
• Considered the results of reporting from component teams relating to compliance with applicable laws and regulations and procedures performed to address assessed
fraud risk;
• Incorporating unpredictability into our audit procedures; and
• Maintaining an appropriate level of professional scepticism throughout the audit process.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are
not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk
of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it typically involves
selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk
characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the IAASA website at:
https://iaasa.ie/wp-content/uploads/docs/media/IAASA/Documents/audit-standards/Description_of_auditors_responsibilities_for_audit.pdf.
This description forms part of our auditors’ report.
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Financial Statements
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Supplementary Information
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with section 391 of the Companies Act 2014 and for
no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2014 opinions on other matters
• We have obtained all the information and explanations which we consider necessary for the purposes of our audit.
• In our opinion the accounting records of the company were sufficient to permit the company financial statements to be readily and properly audited.
• The Company Balance Sheet is in agreement with the accounting records.
Other exception reporting
Directors’ remuneration and transactions
Under the Companies Act 2014 we are required to report to you if, in our opinion, the disclosures of directors’ remuneration and transactions specified by sections 305 to 312
of that Act have not been made. We have no exceptions to report arising from this responsibility.
Prior financial year Non Financial Statement
We are required to report if the company has not provided the information required by Regulation 5(2) to 5(7) of the European Union (Disclosure of Non-Financial and Diversity
Information by certain large undertakings and groups) Regulations 2017 in respect of the prior financial year. We have nothing to report arising from this responsibility.
Siobhán Collier
for and on behalf of PricewaterhouseCoopers
Chartered Accountants and Statutory Audit Firm
Dublin
4 March 2026
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Financial Statements
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Supplementary Information
Financial Statements
Group Income Statement
2025 2024
For the year ended 31 December 2025
Notes
£’000£’000
Revenue
2
2,519,603
2,282,252
Operating costs
3
(2,358,758)
(2,133,626)
Property profit
4
5,881
3,999
Operating profit before exceptional items
166,726
152,625
Exceptional items
4
8,118
–
Operating profit
174,844
152,625
Finance expense
7
(26,313)
(25,077)
Finance income
7
16,618
24,968
Profit before tax
165,149
152,516
Income tax charge
9
(28,581)
(30,503)
Profit after tax for the financial year
136,568
122,013
Profit attributable to:
Owners of the Parent
136,568
122,013
Earnings per ordinary share – basic
11
70.28p
60.89p
Earnings per ordinary share – diluted
11
70.23p
60.86p
On behalf of the Board
Eric Born David Arnold
Director Director
4 March 2026
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Supplementary Information
Financial Statements
Group Statement of Comprehensive Income
2025 2024
For the year ended 31 December 2025
Notes
£’000£’000
Profit after tax for the financial year
136,568
122,013
Other comprehensive income
Items that are or may be reclassified subsequently to the income statement
Currency translation effects:
– on foreign currency net investments
40,478
(33,099)
Fair value movement on cash flow hedges:
– effective portion of changes in fair value of cash flow hedges
3
–
40,481
(33,099)
Items that will not be reclassified to the income statement
Remeasurement gain on Group defined benefit pension schemes
30
3,321
5,439
Deferred tax on Group defined benefit pension schemes
25
(1,006)
(1,081)
2,315
4,358
Total other comprehensive income/(expense)
42,796
(28,741)
Total comprehensive income for the financial year
179,364
93,272
Total comprehensive income attributable to:
Owners of the Company
179,364
93,272
Total comprehensive income for the financial year
179,364
93,272
On behalf of the Board
Eric Born David Arnold
Director Director
4 March 2026
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Supplementary Information
Financial Statements
Group Balance Sheet
2025 2024
As at 31 December 2025
Notes
£’000£’000
ASSETS
Non-current assets
Goodwill
12
659,107
634,301
Intangible assets
15
131,285
134,911
Property, plant and equipment
13(a)
371,756
367,354
Right-of-use asset
13(b)
366,279
377,726
Investment properties
13(d)
36,589
27,325
Deferred tax assets
25
7,320
7,453
Other receivables
17(a)
10,210
–
Retirement benefit assets
30
11,574
10,932
Other financial assets
14
128
125
Total non-current assets
1,594,248
1,560,127
Current assets
Properties held for sale
13(c)
2,581
763
Inventories
16
395,182
381,803
Trade and other receivables
17(a)
332,467
300,020
Lease receivable
17(b)
–
98
Derivative financial instruments
20
3
–
Fixed-term cash deposits
20
100,000
150,000
Cash and cash equivalents (excluding bank overdrafts)
20
395,764
359,430
Total current assets
1,225,997
1,192,114
Total assets
2,820,245
2,752,241
EQUITY
Equity share capital
18
6,488
6,744
Share premium account
18
225,813
224,141
Capital redemption reserve
19
2,814
2,548
Revaluation reserve
19
11,861
12,037
Shares to be issued reserve
19
6,405
6,802
Cash flow hedge reserve
19
(3)
(6)
Foreign currency translation reserve
19
82,661
42,183
Retained earnings
1,316,572
1,305,649
Treasury shares held
18
(3,897)
(3,897)
Equity attributable to owners of the Parent
1,648,714
1,596,201
2025 2024
As at 31 December 2025
Notes
£’000£’000
LIABILITIES
Non-current liabilities
Interest-bearing loans and borrowings
20
190,810
188,372
Lease liabilities
20
320,223
331,572
Provisions
23
12,769
13,042
Retirement benefit obligations
30
4,020
9,591
Deferred tax liabilities
25
62,879
62,040
Deferred consideration payable
27
–
599
Total non-current liabilities
590,701
605,216
Current liabilities
Interest-bearing loans and borrowings
20
30,929
49,000
Lease liabilities
20
77,185
72,156
Derivative financial instruments
22
–
5
Trade and other payables
24
448,388
401,142
Current income tax liabilities
18,840
20,138
Deferred consideration payable
27
1,398
3,537
Provisions
23
4,090
4,846
Total current liabilities
580,830
550,824
Total liabilities
1,171,531
1,156,040
Total equity and liabilities
2,820,245
2,752,241
On behalf of the Board
Eric Born David Arnold
Director Director
4 March 2026
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Supplementary Information
Financial Statements
Group Cash Flow Statement
2025 2024
For the year ended 31 December 2025
Notes
£’000£’000
Profit before taxation
165,149
152,516
Finance income
7
(16,618)
(24,968)
Finance expense
7
26,313
25,077
Operating profit
174,844
152,625
Depreciation
13(a)(b)
125,842
112,416
Amortisation of intangible assets
15
25,115
22,322
Other non-cash items
(2,406)
1,308
Share-based payments charge
31
813
1,162
Movement in provisions
23
(2,649)
(677)
Fair value gains recognised as property profit
13(d)
(3,087)
(3,191)
Loss on sale of property, plant and equipment
65
570
Property profit
(2,794)
(808)
Profit on disposal of Group businesses before disposal costs
27
(15,077)
–
(Profit)/loss on derecognition of leases
(3)
186
Contributions to pension schemes in excess of IAS 19 charge
(2,389)
(2,476)
Decrease in working capital
26
12,030
14,868
Cash generated from operations
310,304
298,305
Interest paid
(24,284)
(22,462)
Income taxes paid
9
(34,193)
(29,027)
Cash flows from operating activities
251,827
246,816
Investing activities
Inflows
Proceeds from sale of property, plant and equipment
1,716
1,273
Proceeds from sale of properties held for sale
3,557
4,120
Proceeds from sale of Group businesses (net of cash disposed)
27
6,600
–
Proceeds from sale of investment properties
–
305
Maturity of fixed-term cash deposits
350,000
400,000
Interest received
17,407
23,441
379,280
429,139
2025 2024
For the year ended 31 December 2025
Notes
£’000£’000
Outflows
Acquisition of subsidiary undertakings (net of cash/overdraft
acquired)
27
(20,862)
(67,245)
Investment in fixed-term cash deposits
(300,000)
(350,000)
Deferred acquisition consideration paid
27
(2,992)
(2,145)
Investment in intangible assets – computer software
15
(9,226)
(7,275)
Purchase of property, plant and equipment
13(a)
(36,981)
(39,571)
(370,061)
(466,236)
Cash flows from investing activities
9,219
(37,097)
Financing activities
Inflows
Proceeds from the issue of share capital
1,682
283
1,682
283
Outflows
Repayment of borrowings
(19,603)
(8,156)
Dividends paid
10
(72,594)
(73,190)
Treasury shares purchased (share buyback)
18
(56,725)
(81,085)
Payment on lease liabilities
(81,682)
(71,640)
(230,604)
(234,071)
Cash flows from financing activities
(228,922)
(233,788)
Net increase/(decrease) in cash and cash equivalents
32,124
(24,069)
Cash and cash equivalents at 1 January
351,055
383,939
Effect of exchange rate fluctuations on cash held
12,585
(8,815)
Cash and cash equivalents at the end of the year
395,764
351,055
Cash and cash equivalents are broken down as follows:
Cash at bank and short-term deposits
20
395,764
359,430
Bank overdrafts
20
–
(8,375)
Cash and cash equivalents at the end of the year
395,764
351,055
129
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Group Statement of Changes in Equity
Capital Foreign currency
Equity share Share premium redemption Revaluation Shares to be Cash flow translation Retained Treasury Total
capital account reserve reserveissued reservehedge reservereserveearningssharesequity
£’000£’000£’000£’000£’000£’000£’000£’000£’000£’000
Year to 31 December 2025
At 1 January 2025
6,744
224,141
2,548
12,037
6,802
(6)
42,183
1,305,649
(3,897)
1,596,201
Profit after tax for the financial year
–
–
–
–
–
–
–
136,568
–
136,568
Total other comprehensive income
Remeasurement gain on pensions (net of tax)
–
–
–
–
–
–
–
2,315
–
2,315
Movement in cash flow hedge reserve (net of tax)
–
–
–
–
–
3
–
–
–
3
Currency translation effect on foreign currency net investments
–
–
–
–
–
–
40,478
–
–
40,478
Total other comprehensive income
–
–
–
–
–
3
40,478
2,315
–
42,796
Total comprehensive income
–
–
–
–
–
3
40,478
138,883
–
179,364
Transactions with owners of the Parent recognised directly in equity
Dividends paid (Note 10)
–
–
–
–
–
–
–
(72,594)
–
(72,594)
Issue of Grafton Units
10
1,672
–
–
–
–
–
–
–
1,682
Purchase of treasury shares (Note 18)
–
–
–
–
–
–
–
–
(56,725)
(56,725)
Cancellation of treasury shares (Note 18)
(266)
–
266
–
–
–
–
(56,612)
56,612
–
Transfer from treasury shares (Note 18)
–
–
–
–
–
–
–
(113)
113
–
Share-based payments charge
–
–
–
–
813
–
–
–
–
813
Tax on share-based payments
–
–
–
–
(27)
–
–
–
–
(27)
Transfer from shares to be issued reserve
–
–
–
–
(1,183)
–
–
1,183
–
–
Transfer from revaluation reserve
–
–
–
(176)
–
–
–
176
–
–
(256)
1,672
266
(176)
(397)
–
–
(127,960)
–
(126,851)
At 31 December 2025
6,488
225,813
2,814
11,861
6,405
(3)
82,661
1,316,572
(3,897)
1,648,714
130
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Group Statement of Changes in Equity continued
Capital Foreign currency
Equity share Share premium redemption Revaluation Shares to be Cash flow translation Retained Treasury Total
capital account reserve reserveissued reservehedge reservereserveearningssharesequity
£’000£’000£’000£’000£’000£’000£’000£’000£’000£’000
Year to 31 December 2024
At 1 January 2024
7,094
223,861
2,195
12,186
6,562
(6)
75,282
1,332,992
(4,365)
1,655,801
Profit after tax for the financial year
–
–
–
–
–
–
–
122,013
–
122,013
Total other comprehensive income
Remeasurement gain on pensions (net of tax)
–
–
–
–
–
–
–
4,358
–
4,358
Movement in cash flow hedge reserve (net of tax)
–
–
–
–
–
–
–
–
–
–
Currency translation effect on foreign currency net investments
–
–
–
–
–
–
(33,099)
–
–
(33,099)
Total other comprehensive expense
–
–
–
–
–
–
(33,099)
4,358
–
(28,741)
Total comprehensive income
–
–
–
–
–
–
(33,099)
126,371
–
93,272
Transactions with owners of the Parent recognised directly in equity
Dividends paid (Note 10)
–
–
–
–
–
–
–
(73,190)
–
(73,190)
Issue of Grafton Units
3
280
–
–
–
–
–
–
–
283
Purchase of treasury shares (Note 18)
–
–
–
–
–
–
–
–
(81,085)
(81,085)
Cancellation of treasury shares (Note 18)
(353)
–
353
–
–
–
–
(81,391)
81,391
–
Transfer from treasury shares (Note 18)
–
–
–
–
–
–
–
(162)
162
–
Share-based payments charge
–
–
–
–
1,162
–
–
–
–
1,162
Tax on share-based payments
–
–
–
–
(42)
–
–
–
–
(42)
Transfer from shares to be issued reserve
–
–
–
–
(880)
–
–
880
–
–
Transfer from revaluation reserve
–
–
–
(149)
–
–
–
149
–
–
(350)
280
353
(149)
240
–
–
(153,714)
468
(152,872)
At 31 December 2024
6,744
224,141
2,548
12,037
6,802
(6)
42,183
1,305,649
(3,897)
1,596,201
131
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements
1. Summary of Material Accounting Policies
General Information
Grafton Group plc (‘Grafton’ or ‘the Group’) is a public limited company incorporated in the Republic of
Ireland. The registered number is 8149 and registered office address is The Hive, Carmanhall Road,
Sandyford Business Park, Dublin 18, D18 Y2C9. The Group is a European multinational distributor of
construction related products and solutions comprising four geographic segments serving the Island of
Ireland, Great Britain, Northern Europe and Iberia. In our home Irish market, we also operate the leading
home improvement retailer.
Statement of Compliance
The consolidated financial statements of Grafton Group plc have been prepared in accordance with
International Financial Reporting Standards (“IFRSs”) as adopted by the European Union (“EU”). The
IFRSs applied in these financial statements were those effective for accounting periods ending on
31 December 2025.
New Standards, Amendments and Interpretations
A number of new standards and amendments to standards and interpretations were effective for annual
periods beginning after 1 January 2025, and have been applied in preparing these financial statements.
The following Standards and Interpretations were effective for the Group and parent company in 2025 but
did not have a material effect on the results or financial position of the Group or parent company:
• IAS 21 (Amendments) - The Effects of Changes in Foreign Exchange Rates (Effective 1 January 2025)
New Standards, Amendments and Interpretations not yet adopted
A number of new standards and amendments to standards and interpretations are effective for annual
periods beginning after 1 January 2026, and have not been applied in preparing these financial
statements. The following Standards and Interpretations are not yet effective for the Group and parent
company:
• IFRS 9/IFRS 7 (Amendments) - Classification and Measurement of Financial Instruments (Effective
1 January 2026)
• Annual improvements to IFRS – Volume 11 (effective 1 January 2026)
• Amendment to IFRS 9 and IFRS 7 - Contracts Referencing Nature-dependent Electricity (effective
1 January 2026)
• IFRS 18 Presentation and Disclosure in Financial Statements (Effective 1 January 2027)
The Group is currently assessing how the application of IFRS 18 Presentation and Disclosure in Financial
Statements, effective for accounting periods on or after 1 January 2027, will affect the future
presentation of the Group’s financial statements. While the adoption of IFRS 18 will not affect the totals of
the Group’s assets, liabilities, equity, income and expenses, there will likely be changes as to how the
make-up of these principal categories are presented both in the primary statements and the notes
together with additional disclosures around management performance measures. Otherwise, the
standards outlined above are not expected to result in a net material change to the Group’s or parent
company financial statements.
Basis of Preparation
The consolidated Financial Statements are presented in sterling, rounded to the nearest thousand. As set
out in the Directors’ Report on Corporate Governance, the Directors, having made appropriate enquiries,
believe that the Company and the Group as a whole has adequate resources to continue in operational
existence for the foreseeable future, being at least 12 months from the date of approval of the financial
statements. For this reason, they continue to adopt the going concern basis in preparing the financial
statements. The Statements have been prepared under the historical cost convention, as modified by the
previous revaluation of land and buildings, the measurement at fair value of share-based payments at
initial date of award, the measurement at fair value of all derivative financial instruments and the
measurement at fair value of investment property. Assets classified as held for sale are stated at the
lower of carrying value and fair value less costs to sell. The carrying values of recognised assets and
liabilities that are fair value hedged are adjusted to record changes in the fair values attributable to the
risks that are being hedged.
The preparation of consolidated financial statements in accordance with IFRS as adopted by the
EU requires management to make certain estimates and assumptions that affect the application
of accounting policies and the reported amount of assets, liabilities, income and expense.
Management believes that the estimates and assumptions made are reasonable based on the
information available to it at the time that those estimates and assumptions are made. The areas
involving a high degree of judgement or complexity, or areas where assumptions and estimates are
significant in relation to the consolidated financial statements are set out in Note 32 and relate primarily
to valuation of inventory, accounting for defined benefit pension schemes, goodwill impairment,
rebate income and IFRS 16 “leases”.
In preparing the financial statements, the Directors have also considered the current and potential impact
of climate change. Costs associated with projects to improve energy efficiency, reduce carbon emissions
and to mitigate physical risks on the Group’s properties have been absorbed within operating expenses or
capital expenditure as appropriate. There has been no material impact on the net realisable value of
inventory or the net value of fixed assets in this year’s financial statements as a result of climate change.
The impact of climate change related incentives in executive director bonuses and interest on bank
borrowings has not been material. No liabilities have arisen in respect of net zero commitments as at
31 December 2025.
These considerations did not have a material impact on the financial reporting judgements and estimates
in the current year, specifically in the impairment and going concern analysis. The Group’s analysis of the
impact of climate change continues to evolve with Grafton committed to reducing its carbon impact.
Basis of Consolidation
The consolidated financial statements include the financial statements of the Company and all
subsidiaries drawn up to 31 December each year. The financial year end of the Group’s subsidiaries
are coterminous.
Subsidiaries
The financial statements of subsidiaries are included in the consolidated financial statements from the
date on which control is obtained and they cease to be consolidated from the date on which the Group
loses control. The definition of control is when the Group is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect these returns through its power over
the entity.
Transactions Eliminated on Consolidation
Intra-group balances and transactions, and any unrealised gains and income and expenses arising
from such transactions, are eliminated in preparing the consolidated financial statements. Unrealised
losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence
of impairment .
132
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
1. Summary of Material Accounting Policies continued
Revenue Recognition
Revenue comprises the fair value of consideration receivable for goods and services supplied to external
customers in the ordinary course of the Group’s activities and excludes inter-company revenue and value
added tax.
In general, revenue is recognised to the extent that the Group has satisfied its performance obligations
to the buyer and the buyer has obtained control of the goods or services being transferred. In the case
of sales of goods, this generally arises when products have either been delivered to or collected by a
customer and there is no unfulfilled obligation that could affect the acceptance of the products.
Service revenue comprises tool hire revenue and is recognised over the period of hire.
Revenues are recorded based on the price specified in the sales invoices/contracts net of actual and
estimated returns, rebates and any discounts granted and in accordance with the terms of sale.
Accumulated experience is used to estimate returns, rebates and discounts using the expected value
method and revenue is only recognised to the extent that it is highly probable that a significant reversal
will not occur.
Segment Reporting
An operating segment is a component of the Group that engages in business activities from which it
may earn revenues and incur expenses for which discrete financial information is available, including
revenues and expenses that relate to transactions with any of the Group’s other components. All
operating segments’ operating results are reviewed regularly by the Group’s Chief Operating Decision
Maker, being the Board, who is responsible for allocating resources and assessing performance.
Foreign Currency Translation
Functional and Presentation Currency
The consolidated financial statements are presented in sterling. Items included in the financial
statements of each of the Group’s entities are measured using its functional currency, being the currency
of the primary economic environment in which the entity operates which is primarily euro and sterling.
The functional currency of the parent company is euro.
Transactions and Balances
Transactions in foreign currencies are recorded at the rate of exchange ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated to the
relevant functional currency at the rate of exchange ruling at the balance sheet date.
All currency translation differences on monetary assets and liabilities are taken to the income statement
except for the effective portion designated as a hedge of a net investment in a foreign operation which is
recognised in other comprehensive income.
Foreign Operations
The assets and liabilities of foreign operations, including goodwill arising on consolidation, are translated
to sterling at the foreign exchange rates ruling at the balance sheet date. Results and cash flows of
subsidiaries which do not have sterling as their functional currency are translated into sterling at average
exchange rates for the year and the related balance sheets are translated at the rates of exchange ruling
at the balance sheet date.
Foreign exchange movements arising on translation of the net investment in a foreign operation,
including those arising on long-term intra-Group loans deemed to be quasi equity in nature, are
recognised directly in other comprehensive income, in the currency translation reserve. The portion of
exchange gains or losses on foreign currency borrowings or derivatives used to provide a hedge against
a net investment in a foreign operation that is designated as a hedge of those investments is recognised
directly in other comprehensive income to the extent that they are determined to be effective. The
ineffective portion is recognised immediately in the income statement.
Movements since 1 January 2004, the date of transition to IFRS, are recognised in the currency
translation reserve and are reclassified to the income statement on disposal of the related business.
Share Capital and Share Premium
The Company’s share capital and share premium has been translated from euro into sterling at historic
rates of exchange at the dates of transactions.
Exceptional Items and non-recurring Items
The Group has adopted a policy in relation to its income statement which seeks to highlight significant
items within the Group’s results. Such items may include significant restructuring provisions, profit or
loss on disposal or termination of operations, litigation costs and settlements and impairment of assets.
Judgement is used by the Group in assessing the particular items which, by virtue of their scale and
nature, should be disclosed in the income statement or related notes. Where exceptional items are not
significant for separate presentation, they are disclosed as non-recurring items.
Property profit is disclosed as a separate line item on the face of the Income Statement. Property profit
arises when the proceeds, less costs to sell, exceed the carrying value of the disposed property. Property
profit also includes fair value movements.
Rebate Arrangements
Rebate arrangements are a common component of supplier agreements in the building materials
distribution and DIY retail sectors. As part of its on-going business activities, Grafton Group plc entities
have entered into such arrangements with a significant number of their suppliers.
Supplier rebates received and receivable in respect of goods which have been sold to the Group’s
customers are deducted from cost of sales in the income statement. Where goods on which rebate has
been earned remain in inventory at the year end, an appropriate rebate deduction is made from the gross
balance sheet carrying value of that inventory. The rebate deduction is only released to the income
statement when the goods are ultimately sold. At the year end the balance sheet includes a balance
representing unpaid amounts receivable from suppliers.
Finance Expense
Finance expense comprises interest payable on borrowings calculated using the effective interest rate
method, net foreign exchange losses on monetary items and gains and losses on hedging instruments
that are recognised in the income statement. The net finance cost of pension scheme obligations is
recognised as a finance expense in the income statement. The interest expense component of lease
payments is recognised in the income statement using the effective interest rate method. Where
appropriate the fair value adjustment to hedged items that are the subject of a fair value hedge is included
as a finance expense or finance income. Borrowing costs that are not directly attributable to the
acquisition, construction or production of a qualifying asset are recognised in the income statement as
incurred using the effective interest rate method.
133
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
1. Summary of Material Accounting Policies continued
Finance Income
Finance income comprises interest income on cash and cash equivalents, fixed-term cash deposits,
dividend income, gains on the disposal of financial assets, and gains on hedging instruments that are
recognised in profit or loss. The net expected return on defined benefit pension scheme plan assets is
recognised as finance income in the income statement. Interest income is recognised in the income
statement as it accrues using the effective interest rate method.
Business Combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which
is the date on which control is transferred to the Group. Control is defined as when the Group is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect these
returns through its power over the entity.
The Group measures goodwill at the acquisition date as:
• The fair value of the consideration transferred; plus
• The recognised amount of any non-controlling interests in the acquiree; plus
• If the business combination is achieved in stages, the fair value of the existing equity interest in the
acquiree; less
• The net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in the income
statement. The consideration transferred does not include amounts related to the settlement of the
pre-existing relationships. Such amounts are generally recognised in the income statement.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities,
that the Group incurs in connection with a business combination are expensed as incurred.
To the extent that settlement of all or any part of consideration for a business combination is deferred,
the fair value of the deferred component is determined through discounting the amounts payable to their
present value. Any contingent consideration payable is recognised at fair value at the acquisition date.
The fair value of contingent consideration at acquisition date is arrived at through discounting the
expected payment to present value and is disclosed as a liability within deferred consideration on
acquisition of businesses.
If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted
for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are
recognised in the income statement.
A consideration arrangement contingent upon the continuing employment by the selling shareholders, in
which the payments are automatically forfeited if employment terminates, is classified as remuneration
for post-combination services, in line with IFRS 3.
Goodwill
Goodwill is the excess of the consideration paid over the fair value of the identifiable assets, liabilities and
contingent liabilities in a business combination and relates to assets which are not capable of being
individually identified and separately recognised.
Goodwill acquired is allocated, at acquisition date, to the groups of Cash Generating Units (“CGUs”)
expected to benefit from synergies related to the acquisition. Where management reassesses its groups
of CGUs, goodwill is reallocated on a relative value basis.
Goodwill is measured at cost less accumulated impairment losses. The CGUs represent the lowest level
within the Group at which goodwill is monitored for internal management purposes. These units are no
larger than the operating segments determined in accordance with IFRS 8: Operating Segments. Goodwill
is subject to impairment testing on an annual basis and at any time during the year if an indicator of
impairment exists.
Where the recoverable amount of a CGU is less than the carrying amount, an impairment loss is
recognised. Impairment losses arising in respect of goodwill are not reversed once recognised.
Where a business is disposed of from a CGU to which goodwill had been allocated on acquisition, an
allocation is made to the disposed business and included in determining the profit or loss arising on
disposal. The allocation of goodwill to the disposed business is determined on the basis of the fair value
of the disposed business relative to the fair value of the portion of the CGU retained. Fair value of the
disposed business is based on the disposal consideration and fair value of the portion of the CGU
retained is determined on a value-in-use basis.
Intangible Assets (Computer Software)
Acquired computer software, including computer software which is not an integrated part of an item of
computer hardware, is stated at cost less any accumulated amortisation and any accumulated
impairment losses. Cost comprises of purchase price and any other directly attributable costs.
Costs relating to the development of computer software are recognised if it meets the following criteria:
• An asset can be separately identified;
• The ability to use the asset can be demonstrated;
• It is probable that the asset created will generate future economic benefits;
• Adequate resources are available to complete the development of the asset;
• The completion and implementation of the asset is technically feasible;
• It is probable that the expected future economic benefits that are attributable to the asset will flow to
the entity; and
• Expenditure attributable to the asset during its development can be measured reliably.
Costs relating to the development of computer software for internal use are capitalised once the
recognition criteria outlined above are met.
Computer software is amortised over its expected useful life, which ranges from four to ten years, by
charging equal instalments to the income statement from the date the assets are ready for use.
Intangible Assets (other than Goodwill and Computer Software)
An intangible asset, other than goodwill and computer software, is recognised to the extent that it is
probable that the expected future economic benefits attributable to the asset will flow to the Group and
that its fair value can be measured. The asset is deemed to be identifiable when it is separable (i.e.
capable of being divided from the entity and sold, transferred, licensed, rented or exchanged, either
individually or together with a related contract, asset or liability) or when it arises from contractual or
other legal rights, regardless of whether those rights are transferable or separable from the Group or from
other rights and obligations.
134
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
1. Summary of Material Accounting Policies continued
Intangible Assets (other than Goodwill and Computer Software) continued
Trade names, customer relationships and technology assets, acquired as part of a business combination,
are valued at their fair value at the date control is achieved and are capitalised separately from goodwill if
the intangible asset meets the definition of an asset and the fair value can be reliably measured.
Brand-related intangible assets are amortised on a straight-line basis over the period of their expected
useful economic lives, which ranges from 2 to 20 years. The useful economic life used to amortise
intangible assets relates management’s estimate of the period over which economic benefit will be
derived from the asset.
Intangible assets are carried at cost less any accumulated amortisation and any accumulated
impairment losses. The carrying value of intangible assets is reviewed for impairment at each reporting
date and is also subject to impairment testing when events or changes in circumstances indicate that the
carrying values may not be recoverable.
Property, Plant and Equipment
Property, plant and equipment are stated at cost or deemed cost less accumulated depreciation and
impairment losses. The Group’s freehold properties in Ireland were revalued to fair value in 1998 and are
measured on the basis of deemed cost being the revalued amount at the date of that revaluation less
accumulated depreciation. The valuations were deemed to be cost for the purposes of transition to IFRS
as adopted by the EU.
Property, plant and equipment are depreciated over their useful economic life on a straight-line basis at
the following rates:
Freehold buildings
50–100 years
Freehold land
Not depreciated
Leasehold improvements/buildings
Lease term or up to 100 years
Plant and machinery
5–20 years
Motor vehicles
5–10 years
Plant hire equipment
4–10 years
The residual value and useful lives of property, plant and equipment are reviewed and adjusted if
appropriate at each balance sheet date.
On disposal of property, plant and equipment, the cost and related accumulated depreciation and
impairments are removed from the balance sheet and the net amount, less any proceeds, is taken to the
income statement.
The carrying amounts of the Group’s property, plant and equipment are reviewed at each balance sheet
date to determine whether there is any indication of impairment. An impairment loss is recognised
whenever the carrying amount of an asset or its cash generation unit exceeds its recoverable amount.
Impairment losses are recognised in the income statement.
Cost includes expenditure that is directly attributable to the acquisition of the asset. Subsequent costs
are included in an asset’s carrying amount or recognised as a separate asset, as appropriate, only when it
is probable that future economic benefits associated with the item will flow to the Group and the cost of
replacing the item can be reliably measured. All other repair and maintenance costs are charged to the
income statement during the financial period in which they are incurred.
Leases
Identification of Leases
The identification of leases involves judgement as IFRS 16 defines a lease as a contract (or part of a
contract) that, for a period of time in exchange for consideration, conveys the right to:
• Control an identified asset;
• Obtain substantially all economic benefits from use of the asset; and
• Direct the use of the asset.
Lease Term
The lease term is the non-cancellable period for which the Group has the right to use an underlying asset
together with:
• Periods covered by an option to extend the lease if the Group is reasonably certain to exercise that
option; and
• Periods covered by an option to terminate the lease if the Group is reasonably certain not to exercise
that option. This assessment involves the exercise of judgement by the Group.
Initial Measurement of Lease Liability
The lease liability is initially measured at the present value of the lease payments that are payable for the
lease term, discounted using the incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
• Fixed lease payments (including in-substance fixed payments);
• Variable lease payments that depend on an index or rate, initially measured using the index or rate at the
commencement date;
• The amount expected to be payable by the lessee under residual value guarantees (e.g. if the fair value
of the asset at the end of the lease term is below an agreed amount, the lessee would pay to the lessor
an amount equal to the difference between the fair value and agreed amount);
• The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
• Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to
terminate the lease.
The lease liability does not include variable elements which are dependent on external factors, e.g.
payments that are based on turnover. Instead, such variable elements are recognised directly in the
income statement.
Judgements applied include determining the lease term for those leases with termination or extension
options and the discount rate used which is based on incremental borrowing rate. Such judgements
could impact the lease term and significantly the resultant lease liability and right-of-use asset
recognised.
Where a lease agreement contains a clause to restore the asset to a specified condition i.e. dilapidation
costs, the Group recognises a provision for dilapidations under IAS 37 Provisions, Contingent Liabilities
and Contingent Assets in its balance sheet.
Initial Measurement of Right-of-Use Asset
The right-of-use asset comprises the amount of the initial measurement of the lease liability, adjusted for:
• Any lease payments made at or before the commencement date, less any lease incentives; and
• Any initial direct costs incurred by the Group.
135
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
1. Summary of Material Accounting Policies continued
Initial Measurement of Right-of-Use Asset continued
In addition, where the Group subleases a headlease (or part thereof) to a third party and such sublease is
deemed by the Group to be a finance sublease, the right-of-use asset relating to sublease is derecognised
and a finance lease receivable is recognised.
Subsequent Measurement of Lease Liability
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the
lease liability (using the effective interest method) and by reducing the carrying amount to reflect the
lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-
use asset) whenever:
• The lease term has changed or there is a change in the assessment of exercise of a purchase option, in
which case the lease liability is remeasured by discounting the revised lease payments using a revised
discount rate;
• The lease payments change due to changes in an index or rate or a change in expected payment under
a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised
lease payments using the initial discount rate (unless the lease payments change is due to a change in a
floating interest rate, in which case a revised discount rate is used); and
• A lease contract is modified and the lease modification is not accounted for as a separate lease, in
which case the lease liability is remeasured by discounting the revised lease payments using a revised
discount rate.
Subsequent Measurement of Right-of-Use Asset
After initial measurement, the right-of-use assets are measured at cost less accumulated depreciation,
adjusted for:
• Any impairment losses in accordance with IAS 36 Impairment of Assets; and
• Any remeasurement of the lease liability.
Right-of-use assets are depreciated over the shorter period of the lease term and useful life of the
underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use
asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is
depreciated over the useful life of the underlying asset.
Lease Modifications
A lease modification is a change to the original terms and conditions of the lease. The effective date of
the modification is deemed to be the date when both parties agree to a lease modification.
A lease modification is accounted for as a separate lease if:
• The modification increases the scope of the lease by adding the right to use one or more underlying
assets; and
• The consideration for the lease increases by an amount commensurate with the standalone price for
the increase in scope of the lease.
If both criteria are met, the Group adopts the accounting policy on the initial recognition and
measurement of lease liabilities and right-of-use assets. If a change in the lease terms does not meet the
test outlined above, the Group must modify the initially recognised components of the lease contract.
Sublease Accounting
Where the Group acts as a lessor, the sublease is classified as a finance lease or an operating lease.
A lease is deemed to be a finance lease where the lease transfers substantially all the risks and
rewards incidental to the ownership of the underlying asset. Otherwise, the lease is deemed to be an
operating lease.
Where the Group is an intermediate lessor, it accounts for its interests in the head lease and the sublease
separately. The Group assesses the lease classification of a sublease with reference to the right-of-use
asset arising from the head lease, not with reference to the underlying asset.
If the head lease is not a short-term lease or low-value lease and the sublease is deemed to be a
finance lease, the Group recognises a lease liability relating to the head lease but does not recognise
a corresponding right-of-use asset. Instead, the Group recognises a finance lease debtor relating to
the sublease.
Investment Properties
Investment property is initially measured at cost and subsequently at fair value with any change therein
recognised in profit or loss. Fair value is defined as the price that would be received if the asset was sold
in an orderly transaction between market participants based on the asset’s highest and best use.
Any gain or loss on disposal of investment property (calculated as the difference between the net
proceeds from disposal and the carrying amount of the item) is recognised in profit or loss. When
investment property that was previously classified as property, plant and equipment is sold, any related
amount included in the revaluation reserve is transferred to retained earnings.
When the use of a property changes from owner occupied or held for sale to investment property, the
property is remeasured to fair value and reclassified accordingly. Any gain on this remeasurement is
recognised in profit or loss to the extent that it reverses a previous impairment loss on the specific
property, with any remaining gain recognised in Other Comprehensive Income and presented in the
revaluation reserve. Any loss is recognised in profit or loss.
Assets Held for Sale
Non-current assets that are expected to be recovered principally through sale rather than continuing use
and meet the IFRS 5 criteria are classified as held for sale. These assets are shown in the balance sheet
at the lower of their carrying amount and fair value less any costs to sell. Impairment losses on initial
classification as non-current assets held for sale and subsequent gains or losses on remeasurement are
recognised in the income statement.
Investments
Investments, other than investments in joint ventures and associates, are stated in the balance sheet at
fair value with changes in fair value recognised directly in other comprehensive income. There is no
subsequent reclassification of fair value gains and losses to profit and loss following derecognition of the
investment. Dividends from such investments are recognised in the income statement and are reported
as non-operating items.
Where investments are actively traded in organised financial markets, fair value is determined by
reference to Stock Exchange quoted market bid prices at the close of business on the balance sheet
date. Where it is impracticable to determine fair value in accordance with IFRS 13 Fair Value
Measurement, unquoted equity investments are recorded at historical cost and are included within
financial assets on this basis in the Group balance sheet. They are assessed for impairment annually.
136
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Annual Report and Accounts 2025
02-42
Strategic Report
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Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
1. Summary of Material Accounting Policies continued
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is based on the first-in, first-out
principle and includes all expenditure incurred in acquiring the inventories and bringing them to their
present location and condition. Raw materials and purchased finished goods are valued on the basis of
purchase cost on a first-in, first-out basis. In the case of manufactured finished goods and work-in-
progress, cost includes direct materials, direct labour and attributable overheads based on normal
operating capacity and excludes borrowing costs. Net realisable value is the estimated proceeds of sale
less all further costs to completion and less all costs to be incurred in marketing, selling and distribution.
Trade and Other Receivables and Payables
Trade and other receivables and payables are stated at amortised cost (less any impairment losses),
which approximates to fair value given the short-term nature of these assets and liabilities.
Trade receivables are carried at original invoice amount less an allowance for potentially uncollectable
debts. Provision is made using the expected credit loss model which uses a lifetime expected loss
allowance for all trade receivables. To measure the expected credit losses, trade receivables are grouped
based on shared credit risk characteristics and days past due.
Bad debts are written-off in the income statement when there is no reasonable expectation of recovery.
Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a
debtor to engage in a repayment plan with the Group, and the commencement of legal proceedings.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash balances held for the purposes of meeting short-term cash
commitments and money market instruments which are readily convertible to a known amount of cash.
Where money market instruments are categorised as cash equivalents, the related balances have an
original maturity of three months or less. Cash balances and bank overdrafts held by the Group are
carried at amortised cost. Money market instruments are classified and measured at fair value through
profit or loss. The carrying amount of these assets and liabilities approximates to their fair value.
For the purposes of the Group cash flow statement, bank overdrafts are netted against cash and cash
equivalents where the overdrafts are repayable on demand and form an integral part of cash
management.
Where there is a master netting agreement in place that grants the Group the legal right to set-off and
management has intention to settle on a net basis with each bank, bank overdrafts are off-set against
cash and cash equivalents. Where off-setting criteria has not been met, bank overdrafts are included
within current interest-bearing loans and borrowings in the Group balance sheet.
Derivative Financial Instruments and Hedging Activities
Derivative financial instruments, principally interest rate and currency swaps/forwards, are used in
certain circumstances to hedge the Group’s exposure to foreign exchange and interest rate risks arising
from its financing activities.
Derivative financial instruments are recognised initially at fair value and thereafter are subsequently
remeasured at their fair value. Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date. The
fair value of interest rate and currency swaps/forwards is the estimated amount that the Group would
receive or pay to terminate the swap at the balance sheet date, taking into account current interest and
currency exchange rates and the current creditworthiness of the swapped counterparts.
The method of recognising the resulting gain or loss on remeasurement to fair value depends on whether
the derivative is designated as a hedging instrument. Where derivatives are not designated or do not fulfil
the criteria for hedge accounting, changes in fair values are reported in the income statement. Where
derivatives qualify for hedge accounting, recognition of the resulting gains or losses depends on the
nature of the item being hedged. The Group designates certain derivatives for various purposes in hedge
relationships in one or more of the following types of relationships:
(i) Fair value hedge: Hedges of the fair value of recognised liabilities;
(ii) Cash flow hedge: Hedges of a particular risk associated with a highly probable forecast transaction; or
(iii) Net investment hedge: Hedges of a net investment in a foreign operation.
The Group documents at the inception of the transaction the relationship between hedging instruments
and hedged items, as well as its risk management objectives and strategy for undertaking various
hedging transactions. The Group also documents whether changes in the cash flows of the hedging
instruments are expected to offset changes in the cash flows of the hedged items.
(i) Fair Value Hedge
Any gain or loss stemming from the remeasurement of the hedging instrument to fair value is reported in
the income statement. In addition, any gain or loss on the hedged item which is attributable to the fair
value movement in the hedged risk is adjusted against the carrying amount of the hedged item and
reflected in the income statement.
Where a derivative financial instrument is used to economically hedge the foreign exchange exposure of
a recognised monetary asset or liability, hedge accounting is not applied and any gain or loss accruing on
the hedging instrument is recognised as finance income or expense in the income statement.
If the hedge no longer meets the criteria for hedge accounting, hedge accounting ceases and the
adjustment to the carrying amount of a hedged item for which the effective interest method is used is
amortised to profit or loss over the period to maturity.
(ii) Cash Flow Hedge
The effective part of any gain or loss on the derivative financial instrument is recognised in other
comprehensive income and presented in the cash flow hedge reserve in equity with the ineffective
portion being reported as finance expense or income in the income statement. If a hedge of a forecasted
transaction subsequently results in the recognition of a financial asset or a financial liability, the
associated gains and losses that were recognised in other comprehensive income are reclassified into
profit or loss in the same period or periods during which the asset acquired or liability assumed affects
profit or loss. For cash flow hedges, other than those covered by the preceding statements, the
associated cumulative gain or loss is removed from other comprehensive income and recognised in the
income statement in the same period or periods during which the hedged forecast transaction affects
profit or loss. The ineffective part of any gain or loss is recognised immediately in the income statement.
Hedge accounting is discontinued when a hedging instrument expires or is sold, terminated or exercised,
or no longer qualifies for hedge accounting. The cumulative gain or loss at that point remains in equity
and is recognised in accordance with the above policy when the transaction occurs. If a hedged
transaction is no longer expected to occur, the net cumulative gain or loss recognised in other
comprehensive income is transferred to the income statement in the period.
137
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
1. Summary of Material Accounting Policies continued
(iii) Net Investment Hedge
Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in
other comprehensive income and presented in the foreign currency translation reserve in equity. The
gain or loss relating to the ineffective portion is recognised immediately in the income statement within
finance income or finance expense. Cumulative gains and losses remain in equity until disposal or
partial disposal of the net investment in the foreign operation at which point the related differences are
reclassified to the income statement as part of the overall gain or loss on sale.
Interest-Bearing Loans and Borrowings
All loans and borrowings are initially recorded at fair value, net of related transaction costs. After initial
recognition, current and non-current interest-bearing loans and borrowings are measured at amortised
cost. Any difference between the proceeds (net of transaction costs) and the redemption value is
recognised in the income statement over the period of the borrowings using the effective interest rate
method. Amortised cost includes any issue costs and any discount or premium on settlement.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least twelve months after the balance sheet date.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the
extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred
until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the
facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised
over the period of the facility to which it relates.
Provisions
A provision is recognised on a discounted basis when the Group has a present (either legal or
constructive) obligation as a result of a past event and it is probable that a transfer of economic benefits
will be required to settle the obligations and a reliable estimate can be made of the amount required to
settle the obligation. A provision for restructuring is recognised when the Group has approved a
restructuring plan and the restructuring has commenced. A provision for onerous contracts is recognised
when the expected benefits to be derived by the Group from a contract are lower than the unavoidable
costs of meeting its obligations under the contract. The provision is measured at the lower of the present
value of the expected cost of terminating the contract and the present value of the expected net cost of
continuing with the contract.
Retirement Benefit Obligations
Obligations to the defined contribution pension plans are recognised as an expense in the income
statement as service is received from the relevant employees. The Group has no legal or constructive
obligation to pay further contributions in the event that these plans do not hold sufficient assets to
provide retirement benefits.
The Group operates a number of defined benefit pension schemes, all of which have been closed to both
new members and future accrual, which require contributions to be made to separately administered
funds. The Group’s net obligation in respect of defined benefit pension schemes is calculated separately
for each plan by estimating the amount of future benefits that employees have earned in return for their
service in the current and prior periods. That benefit is discounted to determine its present value, and the
fair value of any plan asset is deducted. The discount rate employed in determining the present value of
the schemes’ liabilities is determined by reference to market yields at the balance sheet date on high-
quality corporate bonds for a term consistent with the currency and term of the associated post-
employment benefit obligations.
The net surplus or deficit arising in the Group’s defined benefit pension schemes are shown within either
non-current assets or liabilities on the face of the Group Balance Sheet. The deferred tax impact of
pension scheme surpluses and deficits is disclosed separately within deferred tax assets or liabilities as
appropriate. The Group recognises actuarial gains and losses immediately in other comprehensive income.
Any increase in the present value of the plans’ liabilities expected to arise from employee service during
the period is charged to operating profit. The Group determines net interest expense/(income) on the net
defined benefit liability/(asset) for the period by applying the discount rate used to measure the defined
benefit obligation at the beginning of the period. Differences between the income recognised based on
the discount rate and the actual return on plan assets, together with the effect of changes in the current
or prior assumptions underlying the liabilities are recognised in other comprehensive income. When the
benefits of a defined benefit plan are improved, the portion of the increased benefit relating to past
service by employees is recognised as a past service cost in the income statement at the earlier of the
date when the plan amendment occurs and when the related restructuring costs are recognised. To the
extent that the benefits vest immediately, the expense is recognised immediately in the income statement.
Share-Based Payment Transactions
The 2011 and 2021 Long Term Incentive Plans (“LTIP”) and the SAYE Scheme for UK employees enables
employees to acquire shares in the Company subject to the conditions of these schemes. New units are
issued to satisfy obligations under the SAYE scheme. Entitlements under the LTIP may be satisfied by the
issue of units or by a market purchase of units. The fair value of share entitlements at the grant date is
recognised as an employee expense in the income statement over the vesting period with a
corresponding increase in equity. The fair value is determined by an external valuer using a binomial
model. Share entitlements granted by the Company are subject to certain non-market-based vesting
conditions. Non-market-based vesting conditions are not taken into account when estimating the fair
value of entitlements as at the grant date. The expense for share entitlements shown in the income
statement is adjusted to reflect the number of awards for which the related non-market-based vesting
conditions are expected to be met, such that the amount ultimately recognised as an expense is based on
the number of awards that meet the related non-market-based vesting conditions at the vesting date. The
proceeds received by the Company on the vesting of share entitlements are credited to share capital and
share premium when the share entitlements are converted or issued.
Government Grants
Government grants and assistance are recognised at their fair value in the income statement when there
is a reasonable assurance that the grant will be received and all attaching conditions have been complied
with. When the grant relates to an expense item, it is recognised in operating costs within the income
statement over the period necessary to match on a systematic basis to the costs that it is intended to
compensate. Where the grant relates to a non-current asset, the value is credited to a deferred income
account and is released to the income statement over the expected useful life of the relevant asset.
Income Tax
Income tax in the income statement represents the sum of current tax and deferred tax.
Income tax is recognised in the income statement except to the extent that it relates to items recognised
directly in other comprehensive income.
138
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
1. Summary of Material Accounting Policies continued
Income Tax continued
Current tax is based on taxable profit and represents the expected tax payable for the year. Taxable profit
differs from net profit as reported in the income statement because it excludes items of income or
expense that are taxable or deductible in other years and it further excludes certain items that are not tax
deductible including property depreciation. The Group’s liability for current tax is calculated using rates
that have been enacted or substantially enacted at the balance sheet date. The Group’s income tax
charge reflects various allowances and reliefs and planning opportunities available in the tax jurisdictions
in which the Group operates. The determination of the Group’s charge for income tax in the income
statement requires estimates to be made, on the basis of professional advice, in relation to certain
matters where the ultimate outcome may not be certain and where an extended period may be required
before such matters are determined. The amount shown for current taxation reflects tax uncertainties
and is based on the Directors’ estimate of (i) the most likely amount; or (ii) the expected value of the
probable outflow of economic resources that will be required. The estimates for income tax included
in the financial statements are considered appropriate but no assurance can be given that the final
determination of these matters will not be materially different to the estimates included in the financial
statements. Whilst it is possible, the Group does not currently anticipate that any such differences
could have a material impact on the income tax provision and profit for the period in which such a
determination is made nor does it expect any significant impact on its financial position in the near
term. This is based on the Group’s knowledge and experience, as well as the profile of the individual
components which have been reflected in the current tax liability, the status of the tax audits, enquiries
and negotiations in progress at each year end, previous claims and any factors specific to the relevant
tax environments.
Deferred tax is provided, using the liability method, on all temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in
the year when the asset is realised or the liability is settled based on rates that have been enacted or
substantially enacted at the balance sheet date.
Deferred tax assets and liabilities are not recognised for the following temporary differences:
• Goodwill that is not deductible for tax purposes;
• Temporary differences arising from the initial recognition of an asset or liability in a transaction that is
not a business combination and, at the time of the transaction, affects neither the accounting profit or
taxable profit or loss; and
• Temporary differences associated with investments in subsidiaries in which case deferred tax is
only recognised to the extent that it is probable that the temporary differences will reverse in the
foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profit would be available to allow all or part of
the deferred tax asset to be utilised.
Share Capital
Ordinary Shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary
shares are recognised as a deduction from equity, net of any tax effects.
Repurchase of Share Capital
When share capital recognised as equity is purchased, the amount of the consideration paid, including
directly attributable costs, is recognised as a change in equity.
Dividends
Dividends on ordinary shares are recognised as a liability in the Group’s financial statements in the period
in which they are declared by the Company. In the case of interim dividends, these are considered to be
declared when they are paid. In the case of final dividends these are declared when authorised by the
shareholders in General Meeting.
Earnings Per Share
The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS
is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding during the period, adjusted for treasury shares
held. Diluted EPS is calculated by dividing the profit or loss attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding adjusted for treasury shares held and for the
effects of all dilutive potential ordinary shares related to employee share schemes.
2. Segment Information
IFRS 8 Operating Segments requires operating segments to be identified on the basis of internal reports
that are regularly reviewed by the Chief Operating Decision Maker, being the Board, in order to allocate
resources to the segments and to assess their performance.
During the financial year ended 31 December 2025, the Group has adopted a new reporting structure
which better reflects the Group’s strategy - the distribution of construction related products and solutions
serving geographic markets with scalable formats that can deliver long-term growth for shareholders.
The Company is now organised into four geographical areas: Island of Ireland, Great Britain, Northern
Europe and Iberia following the move from five distribution segments, one retailing segment and one
manufacturing segment in 2024. The operating segments are now aligned with these geographical areas
and also align with how the Board now manages the business, assesses performance and allocates
capital and resources for organic and inorganic growth:
Island of Ireland - comprising Chadwicks, Woodie’s, MacBlair and MFP (divested 31 May 2025)
Great Britain - comprising Selco, Leyland SDM, TG Lynes, CPI EuroMix and StairBox
Northern Europe - comprising Isero and Polvo in The Netherlands and IKH in Finland
Iberia - comprising Salvador Escoda in Spain
Comparative figures for 2024 have been restated to reflect the new structure. The realignment has no
impact on the Group’s consolidated financial results.
Information regarding the results of each operating segment is included in this note. Performance is
measured based on segment operating profit/(loss) as included in the internal management reports that
are reviewed by the Group’s Chief Operating Decision Maker. Segment operating profit is used to measure
performance as such information is the most relevant in evaluating the results of the Group’s segments.
No segment is over reliant on any major customer and credit risk is well diversified as disclosed in Note
17. Segment results, assets and liabilities include all items directly attributable to a segment. Segment
capital expenditure is the total amount incurred during the period to acquire segment assets that are
expected to be used for more than one accounting period.
139
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
2. Segment Information continued
Group Income Statement
2024
2025 Restated
£’000 £’000
Revenue
Island of Ireland
1,071,601
1,016,230
Great Britain
765,443
767,019
Northern Europe
469,698
469,339
Iberia
212,861
29,664
Total revenue
2,519,603
2,282,252
Segmental operating profit before intangible amortisation arising on
acquisitions and acquisition related items
Island of Ireland
110,968
107,518
Great Britain
49,232
46,359
Northern Europe
29,625
35,342
Iberia
13,592
322
203,417
189,541
Reconciliation to consolidated operating profit
Central activities
*
(19,107)
(16,011)
184,310
173,530
Property profit
5,881
3,999
Operating profit before exceptional items, intangible amortisation arising
on acquisitions and acquisition related items
190,191
177,529
Exceptional items
8,118
-
Operating profit before intangible amortisation arising on acquisitions
and acquisition related items
198,309
177,529
Acquisition related items
**
(1,492)
(4,633)
Amortisation of intangible assets arising on acquisitions
(21,973)
(20,271)
Operating profit
174,844
152,625
Finance expense
(26,313)
(25,077)
Finance income
16,618
24,968
Profit before tax
165,149
152,516
Income tax expense
(28,581)
(30,503)
Profit after tax for the financial year
136,568
122,013
* The increase reflects a combination of continued, planned investment in strengthening capabilities and expertise within the Group’s
head office centre of excellence to support the Group’s strategic priorities as well as inflationary increases and higher employee
incentive costs.
** Acquisition related items comprise deferred consideration payments relating to the retention of former owners of businesses acquired,
transaction costs and expenses, professional fees for new and target acquisitions, adjustments to previously estimated earn outs and
customer relationships asset impairment charges.
Revenue by Country
2025 2024
£’000 £’000
Revenue
*
Ireland
**
953,778
901,342
United Kingdom
883,266
881,907
Netherlands
345,987
337,581
Finland
123,711
131,758
Spain
212,861
29,664
Total revenue
2,519,603
2,282,252
* Service revenue, which relates to plant and equipment hire and is recognised over time, amounted to £26.8m for the year
(2024: £12.3m).
** Grafton Group plc is domiciled in the Republic of Ireland and the revenues from external customers in Ireland were £953.8m
(2024: £901.3m).
The analysis of geographic revenue above is the same whether it is based on location of assets
or customers.
140
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
2. Segment Information continued
Group Balance Sheet
31 Dec 2024
31 Dec 2025 Restated
£’000 £’000
Segment assets
Island of Ireland
845,536
749,660
Great Britain
795,344
824,929
Northern Europe
499,285
492,245
Iberia
165,291
157,467
2,305,456
2,224,301
Unallocated assets
Deferred tax assets
7,320
7,453
Retirement benefit assets
11,574
10,932
Other financial assets
128
125
Derivative financial instruments (current)
3
-
Fixed-term cash deposits
100,000
150,000
Cash and cash equivalents
395,764
359,430
Total assets
2,820,245
2,752,241
31 Dec 2024
31 Dec 2025 Restated
£’000 £’000
Segment liabilities
Island of Ireland
376,764
354,661
Great Britain
304,864
319,059
Northern Europe
131,636
110,469
Iberia
50,789
42,705
864,053
826,894
Unallocated liabilities
Interest bearing loans and borrowings (current and non-current)
221,739
237,372
Retirement benefit obligations
4,020
9,591
Deferred tax liabilities
62,879
62,040
Current income tax liabilities
18,840
20,138
Derivative financial instruments (current)
-
5
Total liabilities
1,171,531
1,156,040
141
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
2. Segment Information continued
Other segment information
Year end 31 December
Island of Ireland
Great Britain
Northern Europe
Iberia
Group
2024 2024 2024
2025 Restated 2025 Restated 2025 Restated 2025 2024 2025 2024
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Goodwill acquired
7,472
–
–
–
–
–
933
3,863
8,405
3,863
Property, plant & equipment additions
22,552
19,133
9,635
14,106
2,764
6,043
2,030
289
36,981
39,571
Property, plant & equipment acquired
9,286
–
–
–
–
–
–
14,218
9,286
14,218
Right-of-use assets additions
6,404
2,995
1,856
4,552
8,709
7,595
8,919
12
25,888
15,154
Right-of-use assets acquired
4,045
–
–
–
–
–
–
24,413
4,045
24,413
Investment in intangible assets
2,753
2,879
3,153
2,226
3,274
2,170
46
–
9,226
7,275
Intangible assets acquired
5,146
–
–
–
–
–
–
15,678
5,146
15,678
Depreciation on property, plant & equipment
15,689
13,959
22,779
22,591
6,024
5,782
2,606
433
47,098
42,765
Depreciation on right-of use assets
21,270
20,304
33,944
32,633
16,596
15,698
6,934
1,016
78,744
69,651
Amortisation of intangible assets
3,553
2,135
6,201
6,602
13,387
13,252
1,974
333
25,115
22,322
Additional geographic analysis
The following is a geographic analysis of the information presented above, where relevant.
Republic of Ireland
UK
Netherlands
Finland
Spain
Group
2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Property, plant & equipment additions
20,909
16,411
11,278
16,828
2,135
4,474
629
1,569
2,030
289
36,981
39,571
Property, plant & equipment acquired
9,286
–
–
–
–
–
–
–
–
14,218
9,286
14,218
Right-of-use assets additions
6,034
2,127
2,226
5,420
8,360
7,562
349
33
8,919
12
25,888
15,154
Right-of-use assets acquired
4,045
–
–
–
–
–
–
–
–
24,413
4,045
24,413
Investment in intangible assets
2,435
2,050
3,471
3,055
2,995
2,042
279
128
46
–
9,226
7,275
Intangible assets acquired
5,146
–
–
–
–
–
–
–
–
15,678
5,146
15,678
*
* Country of domicile
Republic of Ireland
UK
Netherlands
Finland
Spain
Group
2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Segment non-current assets
**
546,264
610,220
631,736
664,154
215,160
126,819
112,306
84,704
59,550
55,818
1,565,016
1,541,715
Properties held for sale
2,581
763
Inventories
395,182
381,803
Trade and other receivables (total)
342,677
300,020
Total segment assets
2,305,456
2,224,301
Segment liabilities
348,311
328,004
333,317
345,716
92,832
76,064
38,804
34,405
50,789
42,705
864,053
826,894
** Excludes deferred tax assets, retirement benefit assets, non-current other receivables and other financial assets but includes current finance lease receivables.
142
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02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
3. Operating Costs and Income
The following have been charged/(credited) in arriving at operating profit:
2025 2024
Total Total
£’000 £’000
(Increase)/decrease in inventories (Note 26)
(1,046)
28,574
Purchases and consumables
1,565,214
1,407,786
Staff costs before non-recurring items (Note 6)
420,801
365,952
Auditors’ remuneration – Group and subsidiaries
1,215
1,333
Auditors’ remuneration – Audit services provided by other firms
176
144
Depreciation (Note 13(a))
47,098
42,765
Depreciation on right-of-use assets (Note 13(b))
78,744
69,651
Lease rentals and other hire charges (Note 13(b))
3,740
2,092
Amortisation of intangible assets (Note 15)
25,115
22,322
Loss on disposal of property, plant and equipment
64
570
Acquisition related costs
1,492
4,633
Selling, distribution and administrative expenses
216,145
187,804
2,358,758
2,133,626
The following services were provided by the Group’s Auditor:
2025 2024
£’000 £’000
Audit services
– Group Auditor – PwC Ireland
659
770
– Other network firm – PwC
492
539
1,151
1,309
Other assurance services
*
– Group Auditor – PwC Ireland
64
24
– Other network firm – PwC
–
–
64
24
Auditors’ remuneration - audit and other assurance services
1,215
1,333
Other non-audit services
– Group Auditor – PwC Ireland
–
–
– Other network firm – PwC
–
–
–
–
Tax advisory services
– Group Auditor – PwC Ireland
–
–
– Other network firm – PwC
–
–
–
–
Total (including expenses)
– Group Auditor – PwC Ireland
723
794
– Other network firm – PwC
492
539
1,215
1,333
* Other assurance services primarily relates to the review of the Group’s Half Year results.
143
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Strategic Report
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Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
4. Property Profit, Non-Recurring Items and
Exceptional Items
Property Profit
The property profit in 2025 of £5.9m relates to profit on property disposals of £2.8m of one UK property,
a fair value gain of £1.0m on two investment properties in Ireland and an additional fair value gain of
£2.1m on one investment property in Great Britain.
The property profit in 2024 of £4.0m relates to profit on property disposals of £0.8m and a fair value gain
of £0.5m on one investment property in Ireland and an additional fair value gain of £2.7m on one
investment property in the UK.
Non-Recurring Items
There were no non-recurring items recognised in 2025 or 2024.
Exceptional Items
On 13 February 2025, the Group entered into an agreement, which was subject to approval from the
Competition and Consumer Protection Commission (CCPC), for the sale of the MFP business to a
subsidiary of Wienerberger AG which mainly operates through Pipelife Ireland Solutions Limited in
Ireland. This transaction completed on 31 May 2025. The net profit on the disposal of the MFP business
was £8.1m with further details outlined in Note 27 .
5. Directors’ Remuneration, Pension Entitlements and
Interests
2025 2024
£’000 £’000
Emoluments
3,376
3,115
Benefits under Long Term Incentive Plan (“LTIP”)
*
716
126
Total emoluments
4,092
3,241
Emoluments above include the following:
Pension payments/contributions
**
115
111
115
111
* For the year ended 31 December 2025, this is the value of LTIP awards that will vest in April 2026. The vesting of these awards was
subject to performance conditions over the period from 1 January 2023 to 31 December 2025. The value of the awards is based on the
average share price of £9.30 for the three months to 31 December 2025. For the year ended 31 December 2024, this is the value of LTIP
awards that vested in April and December 2025. The value of these awards has been updated from that disclosed last year to reflect the
share price of £8.622 and £9.3455 on the dates of vesting.
** This is the amount of contribution payable in respect of the financial year by way of a company contribution to a pension scheme or a
taxable payment in lieu of pension made through the payroll. This amount is accruing to two directors at 31 December 2025 (2024:
two).
Further unaudited information on Directors’ remuneration, pension entitlements and interests in shares
and share entitlements is presented in the Report of the Remuneration Committee on Directors’
Remuneration on pages 87 to 111.
6. Employment
The average number of persons employed during the year by segment was as follows:
2025 2024*
Total Total
Island of Ireland
3,178
3,183
Great Britain
3,486
3,505
Northern Europe
1,877
1,874
Iberia
790
798
Unallocated
75
70
9,406
9,429
* Prior year comparatives have been updated to conform to current year presentation.
The aggregate remuneration costs of employees were:
2025 2024
Total Total
£’000 £’000
Wages and salaries
359,768
317,154
Social welfare costs
48,451
36,431
Share-based payments charge
813
1,162
Defined benefit pension (Note 30)
240
128
Defined contribution pension and related costs
11,529
11,077
Staff costs charged to operating profit
420,801
365,952
Net finance cost on pension scheme obligations (Note 30)
32
305
Charged to income statement
420,833
366,257
Remeasurement (gain) on pension schemes (Note 30)
(3,321)
(5,439)
Total employee benefit cost
417,512
360,818
The share-based payments charge was derived on the basis of the Group’s expectation of the number of
shares likely to vest having regard to the service, the historic performance of the Group over the period
since the share entitlements were granted and the forecast performance over the remaining life of
share awards.
Total capitalised costs in 2025 were £Nil (2024: £Nil).
144
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Strategic Report
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Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
6. Employment continued
Key Management
The cost of key management including Directors is set out in the table below:
2025
2024
Number of individuals
13
13
2025 2024
£’000 £’000
Short-term employee benefits
4,148
3,887
Share-based payment charge
760
956
Retirement benefits expense
167
163
Charged to operating profit
5,075
5,006
7. Finance Expense and Finance Income
2025 2024
£’000 £’000
Finance expense:
Interest on bank loans, US senior notes and overdrafts
*
8,531
8,270
Interest on lease liabilities
*
15,209
15,026
Net finance cost on pension scheme obligations
32
305
Unwinding of discount applicable to deferred consideration (Note 27)
167
1,476
Foreign exchange loss
2,374
–
26,313
25,077
Finance income:
Interest income on bank deposits
*
(16,046)
(23,355)
Unwinding of discount applicable to contingent receivables (Note 27)
(572)
–
Foreign exchange gain
–
(1,613)
(16,618)
(24,968)
Net finance expense recognised in income statement
9,695
109
* Net bank and US senior note interest income of £7.5m (2024: £15.1m). Including interest on lease liabilities, net interest expense was
£7.7m (2024: £0.1m net interest income).
2025 2024
£’000 £’000
Amounts relating to items not at fair value through income statement
– Total finance expense on financial liabilities
23,740
23,296
– Total finance income on financial assets
(16,046)
(23,355)
Recognised directly in other comprehensive income
Currency translation effects on foreign currency net investments
40,478
(33,099)
Effective portion of changes in fair value of cash flow hedges
3
–
40,481
(33,099)
8. Foreign Currencies
The results and cash flows of the subsidiaries with euro functional currencies have been translated into
sterling using the average exchange rate for the year. The balance sheets of subsidiaries with euro
functional currencies have been translated into sterling at the rate of exchange ruling at the balance
sheet date.
The average sterling/euro rate of exchange for the year ended 31 December 2025 was Stg85.68 pence
(2024: Stg84.66 pence). The sterling/euro exchange rate at 31 December 2025 was Stg87.26 pence
(2024: Stg82.92 pence).
9. Income Tax
(a) Income tax recognised in income statement
2025 2024
£’000 £’000
Current tax expense
Irish corporation tax
12,692
13,869
UK and other corporation tax
16,810
15,763
Global minimum top-up tax
1,571
524
31,073
30,156
Deferred tax (credit)/expense
Irish deferred tax relating to the origination and reversal of temporary
differences
(995)
(52)
Deferred tax expense resulting from change in tax rates
–
–
UK and other deferred tax (credit)/expense relating to the origination and
reversal of temporary differences
(1,497)
399
(2,492)
347
Total income tax expense in income statement
28,581
30,503
145
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
9. Income Tax continued
Taxation
The income tax expense of £28.6m (2024: £30.5m) is equivalent to an effective tax rate (before the
exceptional profit on disposal) of 18.2% of profit before tax (2024: 20.0%). The rate after including the
exceptional profit on disposal is lower at 17.3% (2024: 20.0%). This is a blended rate of corporation tax on
profits in the five jurisdictions where the Group operates. The decrease in the effective rate reflects a
higher proportion of profit in Ireland which is taxed at 15.0%, including the Pillar Two top-up tax, and a
credit relating to updated estimates of amounts relating to prior years. The tax rate is impacted by the
disallowance of a tax deduction for certain overheads including depreciation on property.
Taxation paid in 2025 was £34.2m (2024: £29.0m).
The amount shown for current taxation reflects tax uncertainties and is based on the Directors’ estimate
of: (i) the most likely amount; or (ii) the expected value, of the probable outflow of economic resources
that will be required. As with all estimates, the actual outcome may be different to the current estimate.
(b) Reconciliation of Effective Tax Rate
2025 2024
£’000 £’000
Profit before tax
165,149
152,516
Profit before tax multiplied by the Irish standard rate of tax of 12.5%
(2024:12.5%)
20,644
19,065
Effects of:
Expenses not deductible for tax purposes
649
2,627
Differences in effective tax rates on overseas earnings
7,303
6,966
Effect of change in tax rates
–
–
Items not previously recognised for deferred tax
1,507
1,072
Current tax expense related to global minimum top-up tax
1,571
524
Other differences
(3,093)
249
Total income tax expense in income statement
28,581
30,503
(c) Deferred Tax Recognised Directly in Equity/Other Comprehensive Income
2025 2024
£’000 £’000
Actuarial movement on pension schemes (Note 30)
1,006
1,081
Employee share schemes
27
42
1,033
1,123
Deferred income tax liabilities have not been recognised for any taxes that would be payable on the
unremitted earnings of certain subsidiaries as it is probable that any temporary differences will not
reverse in the foreseeable future.
(d) Pillar Two – Global Minimum Top-Up Tax
The Group is subject to the global minimum top-up tax under Pillar Two tax legislation. Pillar Two
legislation has been enacted or substantively enacted in Ireland and several other jurisdictions in which
the Group operates effective from 1 January 2024. Under the legislation, the Group is liable to pay a
top-up tax for the difference between the Pillar Two effective tax rate per jurisdiction and the 15%
minimum rate. Specific adjustments envisaged in the Pillar Two legislation can give rise to different
effective tax rates compared to those calculated for IFRS purposes. The Group has applied a temporary
mandatory relief from deferred tax accounting for the impacts of the top-up tax and will account for it as
a current tax when it is incurred.
The Group has recognised a Pillar Two current tax expense of £1.6m for 2025 (2024: £0.5m) and expects
to avail of transitional safe harbour reliefs in respect of a number of its jurisdictions for the financial year.
The Group will continue to monitor changes in law and guidance as they apply to Grafton Group plc and
its subsidiaries.
10. Dividends
2025 2024
£’000 £’000
Group
Final dividend for 2024 of 26.50p per Grafton Unit – paid 15 May 2025
51,769
–
Interim dividend for 2025 of 10.75p per Grafton Unit – paid 10 October 2025
20,825
–
Final dividend for 2023 of 26.00p per Grafton Unit – paid 9 May 2024
–
52,216
Interim dividend for 2024 of 10.50p per Grafton Unit – paid 11 October 2024
–
20,974
72,594
73,190
A final dividend for 2023 of 26.00p per share was paid on 9 May 2024 in the amount of £52.2m.
An interim dividend for 2024 of 10.50p per share was paid on 11 October 2024 in the amount of £21.0m.
The final dividend for 2024 of 26.50p per share was paid on 15 May 2025 in the amount of £51.8m.
An interim dividend for 2025 of 10.75p per share was paid on 10 October 2025 in the amount of £20.8m.
A final dividend for 2025 of 27.00p per share will be paid to all holders of Grafton Units on the Company’s
Register of Members at the close of business on 24 April 2026 (the ‘Record Date’). The Ex-dividend date
is 23 April 2026. The cash consideration will be paid on 21 May 2026. A liability in respect of the final
dividend has not been recognised at 31 December 2025, as there was no obligation to pay any dividends
at the end of the year.
146
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Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
11. Earnings Per Share – Group
The computation of basic, diluted and adjusted earnings per share is set out below.
2025 2024
£’000 £’000
Numerator for basic, adjusted and diluted earnings per share:
Profit after tax for the financial year
136,568
122,013
Numerator for basic and diluted earnings per share
136,568
122,013
Profit after tax for the financial year
136,568
122,013
Exceptional items
(8,118)
–
Amortisation of intangible assets arising on acquisitions
21,973
20,271
Tax relating to amortisation of intangible assets arising on acquisitions
(4,942)
(4,573)
Acquisition related items
1,492
4,633
Unwinding of discount applicable to deferred consideration payable
167
1,476
Unwinding of discount applicable to contingent consideration receivable
(572)
–
Numerator for adjusted earnings per share
146,568
143,820
Denominator for basic and adjusted earnings per share:
Number of Number of
Grafton Units Grafton Units
Weighted average number of Grafton Units in issue
194,316,609
200,367,922
Dilutive effect of options and awards
149,206
101,676
Denominator for diluted earnings per share
194,465,815
200,469,598
Earnings per share (pence)
– Basic
70.28
60.89
– Diluted
70.23
60.86
Adjusted earnings per share (pence)
*
– Basic
75.43
71.78
– Diluted
75.37
71.74
* The term “Adjusted” means before exceptional items, amortisation of intangible assets arising on acquisitions, the impact of unwinding
acquisition related deferred consideration to present value and acquisition related items.
The weighted average potential employee share entitlements over 666,581 Grafton Units (2024: 677,432)
which are currently anti-dilutive are not included in the above calculation for diluted earnings per share
and adjusted diluted earnings per share.
12. Goodwill
2025 2024
Cost £’000 £’000
At 1 January
634,301
645,062
Arising on acquisitions (Note 27)
8,405
3,863
Translation adjustment
16,401
(14,624)
At 31 December
659,107
634,301
Cash Generating Units
Goodwill arising as part of a business combination is allocated to groups of Cash Generating Units
(“CGUs”) or, where appropriate, recognition of a new CGU or group of CGUs. The groups of CGUs
represent the lowest level at which goodwill is monitored for internal management purposes and are not
larger than the operating segments determined in accordance with IFRS 8, Operating Segments.
Goodwill has been allocated to a total of four (2024: six) groups of CGUs as follows, and a reconciliation
of the movement in goodwill from 31 December 2024 to 31 December 2025 is presented thereafter.
31 December 2025
Goodwill
2025
£’000
Island of Ireland
228,348
Great Britain
273,694
Northern Europe
152,053
Iberia
5,012
659,107
31 December 2024
Goodwill
2024
£’000
Ireland Distribution
158,781
UK Distribution
289,929
Netherlands Distribution
110,374
Finland Distribution
34,117
Spain Distribution
3,835
Manufacturing
37,265
634,301
147
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Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
12. Goodwill continued
Goodwill reallocation
As outlined in Note 2, for the financial year ended 31 December 2025, the Group has adopted a new reporting structure which better reflects the Group’s strategy. From 1 October 2025, the Group was organised into
four geographical areas or operating segments which align with how the Board now manages the business, assesses performance and allocates capital and resources.
In accordance with IAS 36, a reorganisation of operating segments that changes the composition of one or more CGUs to which goodwill has been allocated requires that the goodwill be reallocated to the CGUs
affected. The resulting changes during the year to the allocation of goodwill is summarised below:
Great Island of Northern UK Ireland Netherlands Finland UK
Britain Ireland Europe Iberia* Distribution Distribution Distribution Distribution Manufacturing Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 January 2025
–
–
–
3,835
289,929
158,781
110,374
34,117
37,265
634,301
Arising on acquisition (Note 27)
–
–
–
933
–
7,472
–
–
–
8,405
Reallocated to Island of Ireland
–
219,753
–
–
(53,500)
(166,253)
–
–
–
–
Reallocated to Great Britain
273,694
–
–
–
(236,429)
–
–
–
(37,265)
–
Reallocated to Northern Europe
–
–
144,491
–
–
–
(110,374)
(34,117)
–
–
Translation adjustment
–
8,595
7,562
244
–
–
–
–
–
16,401
At 31 December 2025
273,694
228,348
152,053
5,012
–
–
–
–
–
659,107
* Previously Spain Distribution.
Goodwill Acquired
Goodwill acquired during the year of £7.5m (2024: £3.9m) was allocated to the Island of Ireland group of
CGUs (2024: Iberia group of CGUs) and goodwill arising from fair value adjustments on earlier
acquisitions in the amount of £0.9m (2024:£nil) was allocated to the Iberia group of CGUs. Goodwill on
acquisition reflects the anticipated purchasing and operational synergies to be realised as part of the
enlarged Group. Intangible assets which formed part of the acquisition consideration are detailed in Note
15.
Impairment Testing
Goodwill is subject to impairment testing on an annual basis at 31 December and additionally during the year if
an indicator of impairment is considered to exist.
At the 30 June 2025 interim reporting date, there were impairment indicators in two of the Group’s markets
which prompted an impairment test to be carried out on two of the former groups of CGUs - UK Distribution
and Finland Distribution. No impairments were noted.
There were impairment indicators in the Group’s UK Distribution and Finland Distribution markets in advance
of the reallocation of goodwill from the former groups of CGUs to the enlarged Great Britain and Northern
Europe groups of CGUs and therefore impairment assessments were performed as at 30 September 2025.
No impairments were noted although for the former UK Distribution group of CGUs the recoverable amount
had more limited headroom over its carrying amount, therefore it was more sensitive to possible changes in
key assumptions.
The annual impairment test was completed as at 31 December 2025 to determine the recoverable amounts of
the revised groups of CGUs.
The recoverable amount of each cash generating unit is determined based on value-in-use calculations. The
carrying value of each cash generating unit was compared to its estimated value-in-use. There were no
impairments during the year (2024: £Nil). Total accumulated impairment losses at 31 December 2025
amounted to £Nil (2024: £Nil).
Value-in-use Calculations
The value-in-use at 30 September 2025 and 31 December 2025 was calculated on the basis of estimated future
cash flows discounted to present value. Estimated future cash flows were determined by reference to the budget
for 2026 and management forecasts for each of the following years from 2027 to 2030 inclusive. The terminal
value was calculated using a long-term nominal growth rate in respect of the years after 2030. The estimates of
future cash flows were based on consideration of past experience together with an assessment of the future
prospects of each of the businesses within the CGUs. The assumptions used are also referenced against
external industry data, where available.
The key assumptions used in the value-in-use calculations are the nominal revenue growth rate, the
discount rate and the long-term growth rate. The pre-tax discount rates used were based on the Group’s
estimated weighted average cost of capital, adjusted to reflect risks associated with each CGU.
148
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Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
12. Goodwill continued
Significant Goodwill Amounts
A summary of the allocated goodwill and the assumptions (all nominal) relating to the recoverable amounts of these groups of CGUs at 31 December 2025 is shown below:
Island of Ireland Great Britain Northern Europe Iberia
2025 2025 2025 2025
Goodwill (£’000)
228,348
273,694
152,053
5,012
Recoverable amount basis
Value-in-use
Value-in-use
Value-in-use
Value-in-use
Revenue growth rate average
*
5.1%
6.2%
5.7%
4.9%
Long-term growth rate
2.5%
2.5%
2.5%
2.5%
Discount rate (pre-tax)
10.0%
12.7%
9.7%
12.7%
* CAGR for the years 2026 – 2030.
A summary of the allocated goodwill and the assumptions (all nominal) relating to the recoverable amounts of the groups of CGUs at 31 December 2024 is shown below:
UK Distribution Ireland Distribution Netherlands Distribution Finland Distribution UK Manufacturing
2024 2024 2024 2024 2024
Goodwill (£’000)*
289,929
158,781
110,374
34,117
37,265
Recoverable amount basis
Value-in-use
Value-in-use
Value-in-use
Value-in-use
Value-in-use
Revenue growth rate average
**
6.2%
3.9%
6.0%
4.9%
9.9%
Long-term growth rate
2.5%
2.5%
2.5%
2.5%
2.5%
Discount rate (pre-tax)
12.7%
9.7%
9.5%
9.8%
12.7%
* The remaining goodwill balance of £3.8m is allocated to the Spain Distribution CGU The goodwill amount of this CGU is not significant.
** CAGR for the years 2025 – 2029.
A summary of the assumptions (all nominal) relating to the recoverable amounts of the UK Distribution group of CGUs and Finland Distribution group of CGUs at 30 September 2025 is shown below:
UK Distribution Finland Distribution
30 September 2025 30 September 2025
Recoverable amount basis
Value-in-use
Value-in-use
Revenue growth rate average
*
5.7%
5.5%
Long-term growth rate
2.5%
2.5%
Discount rate (pre-tax)
12.9%
9.7%
* CAGR for the years 2026 – 2030.
Sensitivity Analysis
Where impairment assessments have been performed, it is noted that the value-in-use calculations are sensitive to changes in the key assumptions of the revenue growth rate, the discount rate and the long-term
growth rate. While management believes that the value-in-use assumptions are appropriate, a sensitivity analysis was performed based on reasonable changes in each of the three key assumptions in each CGU. At
30 September 2025, the former UK Distribution group of CGUs’ recoverable amount had limited headroom over its carrying amount. A 160 bps increase in the discount rate would eliminate the headroom that the
group of CGU’s recoverable amount has over its carrying amount. Similarly, a decrease in the revenue growth rate of 80 bps would eliminate the headroom observed at 30 September 2025.
At 31 December 2025, no reasonably possible change in any of the key assumptions would cause the carrying amount to exceed the recoverable amount in any of the significant groups of CGUs.
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Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
13. Property, Plant and Equipment, Right-of-Use Asset,
Properties Held for Sale and Investment Properties
13. (a) Property, Plant and Equipment
Leasehold
Freehold land improvements/ Plant and Motor
and buildings buildings
Machinery
*
Vehicles Total
£’000 £’000 £’000 £’000 £’000
Year ended 31 December 2025
Opening net book amount
155,970
55,649
128,965
26,770
367,354
Additions
3,369
670
26,768
6,174
36,981
Arising on acquisitions (Note 27)
–
410
8,868
8
9,286
Disposal of Group businesses (Note 27)
–
–
(1,400)
–
(1,400)
Disposals
(85)
(423)
(869)
(404)
(1,781)
Depreciation charge (Note 3)
(2,962)
(9,063)
(28,465)
(6,608)
(47,098)
Reclassifications
242
1,106
(1,211)
(137)
–
Reclassification to properties held for
sale (Note 13(c))
(358)
–
–
–
(358)
Reclassification to investment
properties (Note 13(d))
(371)
–
–
–
(371)
Reclassification to intangibles assets
(Note 15)
**
–
–
(1,716)
–
(1,716)
Exchange adjustment
6,110
288
4,178
283
10,859
Closing net book amount
161,915
48,637
135,118
26,086
371,756
At 31 December 2025
Cost
217,329
132,211
356,105
57,561
763,206
Accumulated depreciation
& impairment loss
(55,414)
(83,574)
(220,987)
(31,475)
(391,450)
Net book amount
161,915
48,637
135,118
26,086
371,756
Year ended 31 December 2024
Opening net book amount
160,147
61,185
117,499
28,435
367,266
Additions
4,756
3,472
25,893
5,450
39,571
Arising on acquisitions
–
–
14,218
–
14,218
Disposals
–
(47)
(1,453)
(343)
(1,843)
Depreciation charge (Note 3)
(2,888)
(8,723)
(24,638)
(6,516)
(42,765)
Reclassifications
(477)
32
445
–
–
Exchange adjustment
(5,568)
(270)
(2,999)
(256)
(9,093)
Closing net book amount
155,970
55,649
128,965
26,770
367,354
At 31 December 2024
Cost
206,581
128,264
333,913
57,441
726,199
Accumulated depreciation
& impairment loss
(50,611)
(72,615)
(204,948)
(30,671)
(358,845)
Net book amount
155,970
55,649
128,965
26,770
367,354
* This also includes plant hire equipment.
** Computer software amounting to £1.7m have been transferred from property, plant and equipment to intangible assets to reflect the
most appropriate asset class for these assets.
The Group’s freehold and long leasehold properties located in the Republic of Ireland were professionally
valued as at December 1998 by professional valuers in accordance with the Appraisal and Valuation
Manual of the Society of Chartered Surveyors. Property acquired/purchased after December 1998 is
stated at cost or deemed cost. Previous valuations, which were made on an open market for existing
use basis, were deemed to be cost for the purpose of the transition to IFRS as adopted by the EU. The
remaining properties, which are located in the United Kingdom, the Netherlands, Finland and Spain, are
included at cost less depreciation.
13. (b) Right-of-Use Asset
Property & Other
Land Leases Vehicles Assets Total
£’000 £’000 £’000 £’000
Year ended 31 December 2025
Opening balance at 1 January 2025
360,947
16,404
375
377,726
Additions
*
16,489
8,586
813
25,888
Reclassified to investment
properties (Note 13(d))
**
(7,774)
–
–
(7,774)
Arising on acquisitions (Note 27)
1,992
2,053
–
4,045
Depreciation charge (Note 3)
(71,113)
(7,440)
(191)
(78,744)
Disposals
(2,114)
(141)
–
(2,255)
Remeasurements
*
37,328
472
87
37,887
Translation adjustment
8,700
779
27
9,506
Closing net book amount
344,455
20,713
1,111
366,279
Year ended 31 December 2024
Opening balance at 1 January 2024
389,285
11,488
525
401,298
Additions
*
7,387
7,744
23
15,154
Arising on acquisitions
21,214
3,199
–
24,413
Depreciation charge (Note 3)
(63,831)
(5,665)
(155)
(69,651)
Disposals
(509)
(279)
(2)
(790)
Remeasurements
*
15,412
522
–
15,934
Translation adjustment
(8,011)
(605)
(16)
(8,632)
Closing net book amount
360,947
16,404
375
377,726
* Right-of-use asset additions relate to new lease contracts entered into during the year and mainly arise due to leases entered
into for replacement vehicle leases, new store locations and new lease contracts agreed for existing stores. Right-of-use asset
remeasurements have mainly arisen due to the finalisation of rent reviews and the reassessment of extension options available
to the Group on a number of property leases that will now be exercised.
** Right-of-use assets amounting to £7.8m have been transferred from right-of -use assets to investment properties to reflect the most
appropriate asset class for these assets (relate to right-of-use assets sublet to third parties under operating leases).
Cash flow exposures relating to extension options and termination options, which are not reflected in the
measurement of lease liabilities are £Nil (2024: Nil).
The average lease term is 6.6 years (2024: 6.7 years). The average remaining lease term at 31 December
2025 is 3.0 years (2024: 3.2 years).
150
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02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
13. Property, Plant and Equipment, Right-of-Use Asset,
Properties Held for Sale and Investment Properties
continued
13. (b) Right-of-Use Asset continued
The amounts recognised in the income statement include:
2025 2024
Total Total
£’000 £’000
Depreciation expense on right-of-use assets (Note 3)
78,744
69,651
Interest expense on lease liabilities (Note 7)
15,209
15,026
Expense relating to short-term leases (Note 3)
3,110
1,415
Expense relating to leases of low-value assets (Note 3)
266
287
Expense relating to variable lease payments not included in measurements
of lease liability (Note 3)
364
390
Income from subleasing right-of-use assets – operating leases
1,234
1,078
The total cash outflow for leases amounted to £96.9m (2024: £86.7m). There have been no sale and
leaseback transactions in the current year.
The undiscounted lease amounts to be received on an annual basis, in relation to the sublease operating
lease income, is £0.4m for year one, £0.4m for year two, £0.3m for year three, £0.1m for years four
onwards with total income from subleasing right-of-use assets amounting to £1.4m (2024: £1.8m).
13. (c) Properties Held for Sale
Carrying
Amount
£’000
At 1 January 2024
4,291
Disposals
(3,366)
Translation adjustment
(162)
At 31 December 2024
763
Disposals
(763)
Reclassifications from property, plant & equipment
358
Reclassifications from investment properties
2,223
At 31 December 2025
2,581
During the year, one UK held for sale property was sold. The total number of properties held for sale at
31 December 2025 was three (2024: one). These properties are located in Ireland (two), and the
Netherlands (one) (2024: one in UK).
Properties held for sale are not used in the course of business and are available for immediate sale
in their present condition subject to terms that are usual and customary for properties of this nature.
The individual properties were being actively marketed at the year end and the Group is committed
to its plan to sell these properties in an orderly manner.
Properties held for sale are recognised in the balance sheet at the lower of their carrying amount and
fair value less disposal costs. Fair value for this purpose is estimated based on comparable market
transactions. The carrying value of these properties at 31 December 2025 and 31 December 2024 was
equal to or less than fair value less disposal costs and therefore no reduction in the carrying amount is
required to be recognised.
The following table shows the valuation techniques used in measuring the fair value of properties held for
sale and the significant unobservable inputs used.
Valuation technique
Description of the unobservable inputs used
Level 3 Fair
Value
£’000
Assets valued using
comparable market
Island of Ireland
2,581
transactions
•
Comparable development land prices of £42,500 per acre
(2024: £40,450 per acre).
Assets valued using Island of Ireland
independent valuations
•
One property was independently valued by an independent
property advisor during 2025 who indicated a valuation of
£2.1m (2024: £1.1m).
13. (d) Investment Properties
Level 3
Fair Value
£’000
At 1 January 2024
24,609
Fair value gains
3,191
Disposals
(251)
Translation adjustment
(224)
At 31 December 2024
27,325
Fair value gains
3,087
Disposals
–
Reclassifications from property, plant & equipment
371
Reclassifications from right-of-use assets (see Note 13(b))
7,774
Reclassifications to properties held for sale
(2,223)
Translation adjustment
255
At 31 December 2025
36,589
During the year, a fair value gain of £2.1m was recognised on one UK investment property and £1.0m on
two Irish properties. During the year, two Irish investment properties were transferred to properties held
for sale. Three UK properties were transferred from right-of-use assets to investment properties in the
year. The total number of investment properties at 31 December 2025 was 11 (2024: 10) of which nine
(2024: six) are located in the UK and two (2024: four) in Ireland. These properties are being held with a
view to enhancing their value.
151
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02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
13. Property, Plant and Equipment, Right-of-Use Asset,
Properties Held for Sale and Investment Properties continued
13.(d) Investment Properties continued
The following is a summary of valuation methods used in relation to the Group’s investment properties
which are carried at fair value:
At 31 December 2025
Comparable Present value
Independent market of future 2025
valuations transactions cashflows Total
£’000 £’000 £’000 £’000
Investment Properties
Great Britain
24,160
375
7,774
32,309
Island of Ireland
2,749
1,531
-
4,280
Total
26,909
1,906
7,774
36,589
At 31 December 2024
Comparable
Independent market 2024
valuations transactions* Total
£’000 £’000 £’000
Investment Properties
Great Britain
17,562
4,825
22,387
Island of Ireland
3,312
1,626
4,938
Total
20,874
6,451
27,325
* Comparable market transactions has been represented due to the change in segments, with total amount being the same as prior year.
The following tables show the valuation techniques used in measuring the fair value of investment
properties and the significant unobservable inputs used. Where market transactions can be identified,
the comparable market transaction method is used in order to determine fair value.
Valuation technique
Description of the unobservable inputs used
Level 3 Fair
Value £’000
1,906
Assets valued using Island of Ireland
comparable market
•
Comparable warehouse market prices of £785 (2024: £746)
transactions per square metre.
Great Britain
•
Comparable warehouse market price of £350 (2024: £350)
per square metre.
•
Comparable residential market prices of £50,000
(2024:£50,000)
Level 3 Fair
Valuation technique
Description of the unobservable inputs used
Value £’000
Assets valued using Island of Ireland 26,909
independent valuations
•
One property was valued by an independent property
advisor during 2025 at £2.7m (2024: £2.2m).
Great Britain
•
Four properties were independently valued by an
independent property advisor during 2025 who indicated a
valuation range of £21.4m to £27.4m (2024: valuation range
of £14.6m to £20.6m for three properties). Management
determined that the appropriate fair value to recognise in
the financial statements is £24.2m. (2024: three properties
at £17.6m).
*
Great Britain 7,774
Assets valued using
•
Three properties were valued at year end by reference to
present value of future the present value of future cash flows expected to be
cashflows generated.
Total
36,589
* One of the four properties that was valued independently during 2025 was valued using comparable market transactions in the prior
year. The amount of comparable market prices for industrial development land during 2024 was £1.5m. The reason for the change in
valuation was an increase in developer interest in similar assets and strengthening of the market for similar properties in the area.
The estimated fair value would increase/(decrease) if comparable market prices per square metre/acre
were higher/(lower).
14. Other Financial Assets
Other
Investments
£’000
At 1 January 2024
127
Translation adjustment
(2)
At 31 December 2024
125
Translation adjustment
3
At 31 December 2025
128
Other investments represent sundry equity investments at cost less provision for impairment.
152
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
15. Intangible Assets
Customer
Computer Trade Relationships
Software Names Technology Total
£’000 £’000 £’000 £’000
Cost
At 1 January 2024
14,201
40,159
168,280
222,640
Additions
7,275
–
–
7,275
Acquisitions (Note 27)
161
8,259
7,258
15,678
Translation adjustment
(445)
(1,389)
(5,668)
(7,502)
At 1 January 2025
21,192
47,029
169,870
238,091
Additions
9,226
–
–
9,226
Acquisitions (Note 27)
16
1,514
3,616
5,146
Reclassifications from property, plant &
equipment (Note 13(a))
*
3,959
–
–
3,959
Translation adjustment
793
1,943
6,630
9,366
At 31 December 2025
35,186
50,486
180,116
265,788
Amortisation
At 1 January 2024
6,231
12,754
64,754
83,739
Charge for the year
2,051
3,999
16,272
22,322
Translation adjustment
(170)
(471)
(2,240)
(2,881)
At 1 January 2025
8,112
16,282
78,786
103,180
Charge for the year
3,142
4,764
17,209
25,115
Reclassifications from property, plant &
equipment (Note 13(a))
*
2,243
–
–
2,243
Translation adjustment
294
668
3,003
3,965
At 31 December 2025
13,791
21,714
98,998
134,503
Net book amount
At 31 December 2025
21,395
28,772
81,118
131,285
At 31 December 2024
13,080
30,747
91,084
134,911
* Computer software amounting to £1.7m has been transferred from Property, Plant and Equipment to Intangible Assets to reflect the
most appropriate asset class for these assets.
Customer relationships, technology and trade names arise from business combinations (Note 27) and
are amortised over their estimated useful lives. The average remaining amortisation period is 6.3 years
(2024: 6.3 years).
The amortisation expense of £25.1m (2024: £22.3m) has been charged in operating costs in the income
statement. Amortisation of intangibles acquired through business combinations amounted to £22.0m
(2024: £20.3m).
16. Inventories
2025 2024
£’000 £’000
Raw materials
5,301
4,426
Finished goods
600
2,310
Goods purchased for resale
389,281
375,067
395,182
381,803
The inventory provision at 31 December 2025 was £67.8m (2024: £54.6m).
Movement in Impairment Provision
2025 2024
£’000 £’000
At 1 January
54,647
56,015
Utilised/released during year
(10,375)
(5,635)
Additional provision
21,535
6,157
Translation adjustment
1,995
(1,890)
At 31 December
67,802
54,647
17. Trade and Other Receivables and Finance
Lease Receivables
17. (a) Trade and Other Receivables
2025 2024
£’000 £’000
Amounts falling due within one year:
Trade receivables
223,721
204,442
Other receivables
84,314
71,996
308,035
276,438
Prepayments
24,432
23,582
332,467
300,020
Amounts falling due after more than one year:
Other receivables (Note 27)
10,210
–
342,677
300,020
The carrying amounts of the trade receivables include receivables, in Salvador Escoda, which are subject
to a discounting arrangement. Under this arrangement, Salvador Escoda has transferred the relevant
receivables to four (2024: five) Spanish banking partners in exchange for cash and is prevented from
selling or pledging the receivable. However, Salvador Escoda has retained substantially all of the risks and
rewards of ownership through late payment and credit risk. The Group therefore continues to recognise
the transferred assets in their entirety in the balance sheet. The amount repayable under the discounting
agreement is presented as current liabilities in interest-bearing loans and borrowings.
153
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
17. Trade and Other Receivables and Finance
Lease Receivables continued
The relevant carrying amounts are as follows: Carrying Amount
2025 2024
£’000 £’000
Transferred receivables
21,573
20,281
Interest-bearing loans and borrowings – euro bank credit facilities (Note 20)
21,573
20,281
The carrying amount of trade and other receivables represents the maximum credit exposure. Other
receivables primarily includes contingent consideration receivable on disposal of group businesses and
rebates receivable. Rebates receivable, included in other receivables, amounted to £69.7m
(2024: £60.3m).
The maximum exposure to credit risk for trade debtors and other receivables, falling due within one year,
at the reporting date by geographic region was as follows:
Carrying Amount
2025 2024
£’000 £’000
Republic of Ireland
120,479
96,695
United Kingdom
76,078
70,505
Netherlands
48,099
46,287
Finland
14,785
16,947
Spain
48,594
46,004
308,035
276,438
Credit risk is well diversified over a broad customer base with only a small number of accounts with
balances in excess of £100,000 that collectively account for a small proportion of total trade receivables.
A number of businesses also have credit insurance policies in place which provide cover for the most
significant amounts receivable from customers in the UK and Ireland.
The ageing of total trade and other receivables, under the expected credit loss model, at 31 December
2025 was:
Weighted
Gross Carrying Average Loss
Value Impairment Amount Rate
£’000 £’000 £’000 %
Not Past Due
285,731
(773)
284,958
0.3%
Past Due
0-30 days
45,961
(360)
45,601
0.8%
30-60 days
9,111
(2,906)
6,205
31.9%
+60 days
9,546
(3,633)
5,913
38.1%
64,618
(6,899)
57,719
10.7%
350,349
(7,672)
342,677
2.2%
The ageing of total trade and other receivables, under the expected credit loss model, at 31 December
2024 was:
Weighted
Gross Carrying Average Loss
Value Impairment Amount Rate
£’000 £’000 £’000 %
Not Past Due
248,655
(1,217)
247,438
0.5%
Past Due
0-30 days
41,724
(432)
41,292
1.0%
30-60 days
9,529
(3,374)
6,155
35.4%
+60 days
8,210
(3,075)
5,135
37.5%
59,463
(6,881)
52,582
11.6%
308,118
(8,098)
300,020
2.6%
Movement in Impairment Provision
2025 2024
£’000 £’000
At 1 January
8,098
9,567
Written-off during the year
(3,092)
(3,091)
Additional provision
2,390
1,928
Translation adjustment
276
(306)
At 31 December
7,672
8,098
17. (b) Finance Lease Receivables
Finance lease receivables are presented in the balance sheet as follows:
2025 2024
£’000 £’000
Lease receivables:
Lease receivables – falling due within one year
–
98
Lease receivables – falling due after more than one year
–
–
–
98
The average remaining lease term is 0.0 years (2024: 1.0 years). The finance income on the finance lease
receivable recognised during the year amounted to £Nil (2024: £Nil).
154
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
18. Share Capital and Share Premium
Group and Company
2025 2024
£’000 £’000
Authorised:
Equity shares
306 million ordinary shares of 5c each (2024: 306 million)
15,300
15,300
15,300
15,300
Year ended 31 December 2025
2025
Nominal
Issue Number of Value
Price Shares £’000
Issued and fully paid:
Ordinary shares – nominal value of €0.05
At 1 January
197,802,776
6,744
Issued under UK SAYE scheme
*
210,351
9
2021
Long Term Incentive Plan
April 2022 LTIP Award
16,512
1
Share Buyback
Share Buyback – Programme 5
(171,302)
(7)
Share Buyback – Programme 6
(3,293,879)
(142)
Share Buyback – Programme 7
(2,735,984)
(117)
At 31 December
191,828,474
6,488
Total nominal share capital issued
6,488
* Refer to Note 31 which outlines the issue price of the 2024, 2023 and the 2022 SAYE Schemes.
Year ended 31 December 2024
2024
Nominal
Issue Number of Value
Price Shares £’000
Issued and fully paid:
Ordinary shares – nominal value of €0.05
At 1 January
206,060,972
7,094
Issued under UK SAYE scheme
*
48,147
2
2021
Long Term Incentive Plan
April 2021 LTIP Award
Nil
24,686
1
Share Buyback
Share Buyback – Programme 4
(5,520,921)
(234)
Share Buyback – Programme 5
(2,810,108)
(119)
At 31 December
197,802,776
6,744
Total nominal share capital issued
6,744
* Refer to Note 31 which outlines the issue price of the 2023, 2022 and the 2020 SAYE Schemes.
Share Premium
2025 2024
Group £’000 £’000
At 1 January
224,141
223,861
Premium on issue of shares under UK SAYE scheme
1,672
280
At 31 December
225,813
224,141
Grafton Units Issued and Cancelled During 2025
The number of Grafton Units issued during the year under the Group’s Executive Share Schemes and
the UK SAYE scheme was 226,863 (2024: 72,833). Costs relating to the issues were £Nil (2024: £Nil).
The number of Grafton units cancelled during the year was 6,201,165 (2024: 8,331,029). The total
consideration received, excluding the share buybacks, amounted to £1,682,000 (2024: £283,000).
Grafton Units
As at 31 December 2025 and 31 December 2024, a Grafton Unit comprised one ordinary share of euro
five cent in Grafton Group plc.
Ordinary Shares
The holders of ordinary shares are entitled to attend, speak and vote at all General Meetings
of the Company.
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Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
18. Share Capital and Share Premium continued
Simplification of Grafton Unit
The Grafton Unit comprises one ordinary share of euro five cent in Grafton Group plc.
Treasury Shares
The Group holds 500,000 (2024: 500,000) Grafton Units at a cost of £3,897,000 (2024: £3,897,000) as
treasury shares. At 31 December 2025, the Group also held Nil shares (2024: Nil shares) purchased but
not cancelled as part of the share buyback programme at a cost of £Nil as noted below (2024: £Nil).
Share Buyback Programme
The movement in treasury shares as a result of the buybacks is noted below:
Transfer from
Purchase of Transaction Total Purchase Cancellation Treasury Total
Shares Costs
of Shares
*
of Shares
Shares
**
Movement
£’000 £’000 £’000 £’000 £’000 £’000
Buyback Programme 1
100,000
284
100,284
(100,000)
(284)
–
LTIP Awards 2022
7,563
16
7,579
(7,563)
(16)
–
Buyback Programme 2
93,316
187
93,503
(93,316)
(187)
–
Buyback Programme 3
50,000
100
50,100
(50,000)
(100)
–
LTIP Awards 2023
3,408
7
3,415
(3,408)
(7)
–
Buyback Programme 4
100,000
198
100,198
(100,000)
(198)
–
Buyback Programme 5
30,000
60
30,060
(30,000)
(60)
–
Buyback Programme 6
30,000
60
30,060
(30,000)
(60)
–
Buyback Programme 7
25,000
50
25,050
(25,000)
(50)
–
Total
439,287
962
440,249
(439,287)
(962)
–
Transfer from
Purchase of Transaction Total Purchase Cancellation Treasury Total
Shares Costs
of Shares
*
of Shares
Shares
**
Movement
£’000 £’000 £’000 £’000 £’000 £’000
Year ended
31 December 2022
142,609
372
142,981
(141,693)
–
1,288
Year ended
31 December 2023
159,143
315
159,458
(159,591)
(687)
(820)
Year ended
31 December 2024
80,923
162
81,085
(81,391)
(162)
(468)
Year ended
31 December 2025
56,612
113
56,725
(56,612)
(113)
–
Total
439,287
962
440,249
(439,287)
(962)
–
* Including transaction costs.
** At 31 December 2025, the share buyback programmes and the LTIP purchase and cancellation, were fully completed and the related
transactions costs have been transferred from treasury shares to retained earnings, totalling £1.0m.
Since the first buyback commenced on 9 May 2022 and up to 31 December 2025, the Group has
purchased a total of 49.28 million ordinary shares which represents 20.5% of the issued share capital on
the date of commencement. It acquired them at an average price of £8.69 per share.
Excluding the LTIP awards in 2022 and 2023, cash of £428.3m has been returned to shareholders
through all completed and ongoing share buybacks up to 31 December 2025.
Buyback Programme 5 (completed on 8 January 2025)
The Board announced a fifth programme, commencing 29 August 2024, to buy back ordinary shares in
the Company for an aggregate consideration of up to £30.0m which was to end no later than 31 January
2025, subject to market conditions. At 31 December 2024, the Group had purchased 2,810,108 shares
in aggregate for cancellation at a total cost of £28.4m, including transaction costs. These shares were
all cancelled by 31 December 2024. In January 2025, the Group purchased a further 171,302 shares in
aggregate for cancellation at a further cost of £1.6m, including transaction costs. This programme fully
completed on 8 January 2025.
Buyback Programme 6 (commenced 6 March 2025 and completed on 8 July 2025)
The Board announced a sixth programme, commencing 6 March 2025, to buy back ordinary shares in the
Company for an aggregate consideration of up to £30.0m which was to end no later than 31 August 2025,
subject to market conditions. At 31 December 2025, the Group had purchased 3,293,879 shares in
aggregate for cancellation at a total cost of £30.1m, including transaction costs. This programme fully
completed on 8 July 2025.
Buyback Programme 7 (commenced 4 September 2025 and completed
on 7 November 2025)
The Board announced a seventh programme, commencing 4 September 2025, to buy back ordinary
shares in the Company for an aggregate consideration of up to £25.0m which will end no later than
31 January 2026, subject to market conditions. At 31 December 2025, the Group had purchased
2,735,984 shares in aggregate for cancellation at a total cost of £25.1m, including transaction costs.
This programme fully completed on 7 November 2025.
19. Group Statement of Changes in Equity
The capital redemption reserve is a legal reserve which arose from the purchase of ‘A’ ordinary shares,
the redemption of redeemable shares in prior years and the buy-back and cancellation of shares.
The revaluation reserve was created as a result of a revaluation of Irish properties in 1998.
The shares to be issued reserve comprises amounts expensed in the income statement in connection
with share-based payments, net of transfers to retained earnings on the exercise of share entitlements
and the lapsing of such entitlements.
The cash flow hedge reserve comprises the effective portion of the cumulative net change in the fair
value of cash flow hedging instruments related to hedged transactions that have not yet occurred.
The foreign currency translation reserve arises from the currency effect on translation of the investment
in subsidiaries with euro functional currencies as adjusted for foreign currency borrowings and
derivatives designated as net investment hedges.
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Financial Statements
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Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
20. Interest-Bearing Loans and Borrowings
2025 2024
£’000 £’000
Non-current liabilities
Euro bank loans
51,499
56,053
US senior notes
139,311
132,319
Total interest-bearing loans and borrowings
190,810
188,372
Lease liabilities
320,223
331,572
511,033
519,944
Current liabilities
Bank overdrafts
*
–
8,375
Euro bank credit facilities
30,929
40,625
Total interest-bearing loans and borrowings
30,929
49,000
Lease liabilities
77,185
72,156
108,114
121,156
* Bank overdrafts are included as current liabilities where there are no netting arrangements in place.
The increase in non-current interest bearing loans and borrowings largely reflects a foreign exchange
movement on translation of the Group’s euro denominated bank loans/US senior notes into sterling at the
year end.
The euro bank credit facilities of £30.9m (2024: £40.6m) and bank overdrafts of £Nil (2024: £8.4m) at
31 December 2025 relate to short-term debt in Salvador Escoda in Spain which the Group acquired on
30 October 2024. The Salvador Escoda bank credit facilities of £30.9m include debt related to
discounting effects on debtors (£21.5m) and credit facilities covering import lines of credit (£9.4m) with
four (2024: five) Spanish banking partners. These short-term credit facilities have no financial covenants
or security.
Maturity of financial liabilities
The maturity profile of the Group’s interest-bearing financial liabilities (bank debt, bank overdrafts, loan notes and lease liabilities) can be summarised as follows:
Bank Bank
overdrafts/ overdrafts/
credit Bank US senior Lease credit Bank US senior Lease
facilities loans notes liabilities Total facilities loans notes liabilities Total
2025 2025 2025 2025 2025 2024 2024 2024 2024 2024
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Due within one year
30,929
–
–
77,185
108,114
49,000
–
–
72,156
121,156
Between one and two years
–
–
–
71,969
71,969
–
–
–
67,580
67,580
Between two and three years
–
–
69,656
62,976
132,632
–
–
–
61,339
61,339
Between three and four years
–
51,499
–
53,298
104,797
–
–
66,160
53,004
119,164
Between four and five years
–
–
69,655
43,404
113,059
–
56,053
–
44,930
100,983
After five years
–
–
–
88,576
88,576
–
–
66,159
104,719
170,878
30,929
51,499
139,311
397,408
619,147
49,000
56,053
132,319
403,728
641,100
Derivatives
(3)
5
Gross debt
619,144
641,105
Fixed-term cash deposits
(100,000)
(150,000)
Cash and cash equivalents
(395,764)
(359,430)
Net debt
123,380
131,675
Net cash, excluding the impact of leases, amounted to £274.0m (2024: £272.1m).
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Financial Statements
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Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
20. Interest-Bearing Loans and Borrowings continued
Borrowing Facilities and US Senior Notes
At 31 December 2025, the Group had bilateral loan facilities of £337.6m (2024: £328.3m) with four relationship banks which all mature in August 2029.
The revolving loan facilities of £337.6m were put in place in August 2022 for a term of five years to August 2027. The arrangements included two one-year extension options exercisable at the discretion of the Group
and the four banks. The second one-year extension option was agreed in July 2024 and these facilities are now repayable in August 2029. This is sustainability linked debt funding and includes an incentive
connected to the achievement of carbon emissions, workforce diversity and community support targets that are fully aligned to the Group’s sustainability strategy.
The Group had an undrawn committed borrowing facility at 31 December 2025 of £285.0m (2024: £270.8m) in respect of which all conditions precedent were met. The Group had liquidity of £776.8m at
31 December 2025 (2024: £776.2m) of which £491.8m (2024: £505.4m) was held in accessible cash and deposits and £285.0m (2024: £270.8m) in undrawn revolving bank facilities.
In September 2018, the Group raised €160m (31 December 2025: £139.6m before costs; 31 December 2024: £132.7m before costs) through an issue of unsecured senior notes in the US Private Placement market
with ten and twelve-year maturities at an average fixed annual coupon of 2.5% and used the proceeds received to refinance existing debt. The issue of these notes diversified the Group’s sources of funding by
re-entering the US Private Placement market, extended the maturity profile of debt and provided greater certainty over the cost of debt for an extended period at attractive rates.
The average maturity of committed bank facilities and unsecured senior notes at 31 December 2025 was 3.6 years (2024: 4.6 years).
The following table indicates the effective interest rates at 31 December 2025 in respect of interest bearing financial assets and financial liabilities and the periods in which they re-price.
6 months 6-12 More than
Effective Total or less months 1-2 years 2-5 years 5 years
Interest Rate £’000 £’000 £’000 £’000 £’000 £’000
Euro deposits
1.81%
156,182
156,182
–
–
–
–
Sterling deposits
3.89%
69,000
69,000
–
–
–
–
Cash at bank
0.00%–3.70%
170,582
170,582
–
–
–
–
Total cash and cash equivalents
395,764
395,764
–
–
–
–
Fixed-term cash deposits:
Sterling deposits
*
4.18%
100,000
100,000
–
–
–
–
Total fixed-term cash deposits
100,000
100,000
–
–
–
–
Floating rate debt:
Euro loans
3.11%
(51,499)
(51,499)
–
–
–
–
Euro bank credit facilities
2.37%
(30,929)
(30,929)
–
–
–
–
Total floating rate debt
(82,428)
(82,428)
–
–
–
–
Fixed rate debt:
Lease liabilities
3.99%
(397,408)
(38,846)
(38,339)
(71,969)
(159,678)
(88,576)
US senior notes
2.38%–2.59%
(139,311)
–
–
–
(139,311)
–
Total fixed rate debt
(536,719)
(38,846)
(38,339)
(71,969)
(298,989)
(88,576)
Derivatives
3
3
–
–
–
–
Total net (debt)/cash
(123,380)
374,493
(38,339)
(71,969)
(298,989)
(88,576)
* Fixed-term cash deposits have a maturity date greater than three months at inception but less than three months at the balance sheet date .
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Corporate Governance
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Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
20. Interest-Bearing Loans and Borrowings continued
The following table indicates the effective interest rates at 31 December 2024 in respect of interest bearing financial assets and financial liabilities and the periods in which they re-price.
6 months 6-12 More than
Effective Total or less months 1-2 years 2-5 years 5 years
Interest Rate £’000 £’000 £’000 £’000 £’000 £’000
Euro deposits
2.79%
110,866
110,866
–
–
–
–
Sterling deposits
4.68%
149,962
149,962
–
–
–
–
Cash at bank
0.00%–4.75%
98,602
98,602
–
–
–
–
Total cash and cash equivalents
359,430
359,430
–
–
–
–
Fixed-term cash deposits:
Sterling deposits
*
4.99%
150,000
150,000
–
–
–
–
Total fixed-term cash deposits
150,000
150,000
–
–
–
–
Floating rate debt:
Bank overdrafts
3.76%
(8,375)
(8,375)
–
–
–
–
Euro loans
4.20%
(56,053)
(56,053)
–
–
–
–
Euro bank credit facilities
3.05%
(40,625)
(40,625)
–
–
–
–
Total floating rate debt
(105,053)
(105,053)
–
–
–
–
Fixed rate debt:
Lease liabilities
3.81%
(403,728)
(35,791)
(36,365)
(67,580)
(159,273)
(104,719)
US senior notes
2.38%–2.59%
(132,319)
–
–
–
(66,160)
(66,159)
Total fixed rate debt
(536,047)
(35,791)
(36,365)
(67,580)
(225,433)
(170,878)
Derivatives
(5)
(5)
–
–
–
–
Total net (debt)/cash
(131,675)
368,581
(36,365)
(67,580)
(225,433)
(170,878)
* Fixed-term cash deposits have a maturity date greater than three months at inception but less than three months at the balance sheet date.
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Financial Statements
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Supplementary Information
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Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
21. Financial Instruments and Financial Risk
The fair values of financial assets and liabilities together with the carrying amounts shown in the balance
sheet are as follows:
At 31 December 2025
Total
Fair value Fair value Amortised carrying
through OCI through P&L cost value
£’000 £’000 £’000 £’000
Other financial assets*
128
–
–
128
Trade and other receivables
*
–
–
308,035
308,035
Lease receivables
*
–
–
–
–
Contingent consideration receivable on disposal
of businesses (Note 27)
–
12,251
–
12,251
Fixed-term cash deposits
*
–
–
100,000
100,000
Cash and cash equivalents
*
–
–
395,764
395,764
128
12,251
803,799
816,178
Foreign currency forwards
3
–
–
3
Euro bank loans
**
–
–
(51,499)
(51,499)
Euro bank credit facilities
–
–
(30,929)
(30,929)
Bank overdrafts
–
–
–
–
US senior notes
**
–
–
(139,311)
(139,311)
Lease liabilities
*
–
–
(397,408)
(397,408)
Trade and other payables
*
–
–
(399,525)
(399,525)
Deferred consideration payable on acquisition
of businesses
–
(1,398)
–
(1,398)
3
(1,398)
(1,018,672)
(1,020,067)
* The Group has not disclosed the fair values of financial instruments such as short-term receivables and payables because their
carrying value closely approximates fair value.
** The fair value of euro bank loans was £52.6m and the fair value of US senior notes was £133.6m.
At 31 December 2024
Total
Fair value Fair value Amortised carrying
through OCI through P&L cost value
£’000 £’000 £’000 £’000
Other financial assets*
125
–
–
125
Trade and other receivables
*
–
–
276,438
276,438
Lease receivables
*
–
–
98
98
Fixed-term cash deposits
*
–
–
150,000
150,000
Cash and cash equivalents
*
–
–
359,430
359,430
125
–
785,966
786,091
Foreign currency forwards
(5)
–
–
(5)
Euro bank loans
**
–
–
(56,053)
(56,053)
Euro bank credit facilities
–
–
(40,625)
(40,625)
Bank overdrafts
–
–
(8,375)
(8,375)
US senior notes
**
–
–
(132,319)
(132,319)
Lease liabilities
*
–
–
(403,728)
(403,728)
Trade and other payables
*
–
–
(354,319)
(354,319)
Deferred consideration payable on acquisition
of businesses
–
(4,136)
–
(4,136)
(5)
(4,136)
(995,419)
(999,560)
* The Group has not disclosed the fair values of financial instruments such as short-term receivables and payables because their
carrying value closely approximates fair value.
** The fair value of euro bank loans was £57.4m and the fair value of US senior notes was £125.4m.
Fair Value
A number of the Group’s accounting policies and disclosures require the determination of fair value,
for both financial and non-financial assets and liabilities. Set out below is an analysis of financial
instruments carried at fair value, by valuation method. The different levels in the fair value hierarchy
have been defined as follows:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable, either directly
or indirectly.
Level 3: inputs that are not based on observable market data.
Fair values have been determined for measurement and/or disclosure purposes based on the
following methods.
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Corporate Governance
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Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
21. Financial Instruments and Financial Risk continued
Fair Value continued
Trade and Other Receivables/Trade and Other Payables
• For receivables and payables with a remaining life of less than six months or demand balances, fair
value is the amount that is payable contractually less an impairment provision where appropriate.
Deferred Consideration Payable on Acquisition of Businesses
• The fair value of contingent deferred consideration payable is calculated assuming a probability of
payout, which will be based on achievement of EBITDA targets, and discounted to present value using
market derived discount rates.
Contingent Consideration Receivable on Disposal of Businesses
• Contingent consideration receivable relates to a variable earn-out component following the disposal of
a Group business and is based on future purchases by the Group. The fair value is calculated based
on historical trading volumes and is discounted to present value using market derived discount rates.
The fair value is sensitive to change in the future trading volumes with the former Group business.
The derived discount rates and future trading volumes are significant unobservable inputs.
Cash and Cash Equivalents and Fixed Term Cash Deposits
• For cash and cash equivalents, all of which have a remaining maturity of less than three months from
the balance sheet date, the carrying amount is a reasonable approximation of fair value. For fixed-term
cash deposits, all of which have a maturity date greater than three months at inception but less than
three months at the balance sheet date, the carrying amount is a reasonable approximation of fair
value. At 31 December 2025, £4.0m of cash (2024: £4.0m) is retained in the event of a default by the
Group on a letter of credit. This arrangement can be replaced at any time.
Other Financial Assets
• Certain of the Group’s financial assets are comprised of investments that do not have a quoted market
price in an active market and whose fair value cannot be reliably measured. Such investments are
measured at cost less provision for impairment where appropriate and applicable.
Derivative Instruments (Interest Rate Swaps & Foreign Currency Forwards)
• The fair values of interest rate swaps and foreign currency forwards are calculated as the present value
of the estimated future cash flows based on the terms and maturity of each contract and using the
spot, forward currency rates and market interest rates as applicable for a similar instrument at the
measurement date. Fair values reflect the credit risk of the instrument and include adjustments to take
account of the credit risk of the Group entity and counterparty where appropriate.
Interest Bearing Loans and Borrowings
• For floating rate interest bearing loans and borrowings with a contractual repricing date of less than six
months, the nominal amount is deemed to reflect fair value. For loans with repricing dates of greater
than six months, the fair value is calculated based on the present value of the expected future principal
and interest cash flows discounted at interest rates effective at the balance sheet date and adjusted for
credit spread.
The following table shows the fair values of financial assets and liabilities including their level in the fair
value hierarchy.
2025 2025 2025
Level 2 Level 3 Total
£’000 £’000 £’000
Assets/(liabilities) measured and recognised at fair value
Other derivative instruments – designated as hedging
instruments
3
–
3
Contingent consideration receivable on disposal of businesses
–
12,251
12,251
Deferred consideration payable on acquisition of businesses
–
(1,398)
(1,398)
Liabilities not measured at fair value
Liabilities at amortised cost
US senior notes
(133,644)
–
(133,644)
2024 2024 2024
Level 2 Level 3 Total
£’000 £’000 £’000
Liabilities measured and recognised at fair value
Other derivative instruments – designated as hedging
instruments
(5)
–
(5)
Deferred consideration payable on acquisition of businesses
–
(4,136)
(4,136)
Liabilities not measured at fair value
Liabilities at amortised cost
US senior notes
(125,397)
–
(125,397 )
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Corporate Governance
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Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
21. Financial Instruments and Financial Risk continued
Fair Value continued
Level 2 Fair Values
Inter-relationship between key unobservable inputs and fair value
Type
Valuation technique
Significant unobservable inputs
measurement
Financial assets and liabilities measured at fair value
Foreign currency forwards
The fair value of foreign currency forwards is calculated
Not applicable
Not applicable
as the present value of the estimated future cashflows
based on observable yield curves, spot and forward
currency rates
Financial assets and liabilities not held at fair value
Other financial liabilities
*
Discounted cash flows
Not applicable
Not applicable
* Other financial liabilities include Euro bank loans and US senior notes.
Level 3 Fair Values Inter-relationship between key unobservable inputs and fair value
Type
Valuation technique
Significant unobservable inputs
measurement
Financial assets and liabilities measured at fair value
Deferred consideration payable
The fair value of deferred consideration payable is
EBITA/EBITDA forecasts
Achievement of forecast determines consideration
calculated assuming a probability of payout, which will be payable.
based on achievement of EBITA/EBITDA targets, and
discounted to present value using market derived discount
rates. The fair value assumes achievement of targets but is
sensitive to change in the assessed probability of achieving
targets.
Contingent consideration receivable
The fair value of contingent consideration receivable is
The derived discount rates and future trading A higher discount rate and/or lower trading
calculated based on historical trading volumes and is volumes are significant unobservable inputs. volumes would decrease consideration receivable.
discounted to present value using market derived discount
rates. The fair value is sensitive to change in the future
trading volumes with the former Group business.
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
21. Financial Instruments and Financial Risk continued
Risk Exposures and Group Treasury Policy
The Group’s operations expose it to various financial risks that include credit risk, liquidity risk, currency
risk and interest rate risk. The Group’s treasury policies, which are regularly reviewed, are designed to
reduce financial risk in a cost-efficient way. A limited number of foreign currency spot contracts, foreign
exchange swaps, foreign currency forwards and interest rate swaps are undertaken periodically to hedge
underlying interest rate, fair value and currency exposures and it is Board policy to manage these risks in
a non-speculative manner.
The Group has exposure to the following risks from its use of financial instruments:
• Credit risk;
• Liquidity risk;
• Currency risk; and
• Interest rate risk.
The manner in which the Group is exposed to each of these risks and the risk management policies
applied are discussed below. The Board of Directors has the overall responsibility for the establishment
and oversight of the Group’s risk management framework. The Board is responsible for developing and
monitoring the Group’s risk management policies. The Board and the Audit and Risk Committee have
reviewed the process for identifying, evaluating and managing the significant risks affecting the business.
Credit Risk
Credit risk arises from credit granted to customers. Credit risk also arises on cash and cash equivalents,
fixed-term cash deposits and derivative financial instruments with banks and financial institutions.
Exposure to credit risk is monitored on an ongoing basis. The Group’s exposure to customer credit risk is
diversified over a large customer base and the incidence of default by customers is tightly managed by
Business Unit credit control teams. Credit insurance is in place, subject to annual renewal, to cover major
exposures in the UK and Irish distribution businesses. Credit evaluations are performed regularly. New
customers are subject to initial credit checks that include trade and bank references and are generally
subject to restricted credit limits prior to developing a credit history.
Due to the established nature of the businesses, a high proportion of customers have long-standing
trading relationships with Group companies. These established customers are reviewed regularly for
financial strength and the appropriateness of their credit limit.
The Group establishes a provision for impairment that represents its estimate of losses in respect of
trade and other receivables. The main components of this provision are a specific loss component that
relate to individually significant exposures and a collective loss component established for groups of
similar assets in respect of losses that have been incurred but not yet identified.
Cash and short-term bank deposits are invested with a range of banks, all with original maturities of less
than three months at 31 December 2025. Fixed-term cash deposits have a maturity date greater than
three months at inception but a remaining maturity of less than three months at the balance sheet date.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset,
including derivative financial instruments, in the balance sheet.
The maximum exposure to credit risk at 31 December 2025 and 31 December 2024 was:
2025 2024
£’000 £’000
Trade and other receivables
308,035
276,438
Fixed-term cash deposits
100,000
150,000
Cash and cash equivalents
395,764
359,430
803,799
785,868
Additional disclosures in relation to the Group’s exposure to credit risk arising from trade and other
receivables is set out in Note 17.
The maximum exposure to credit risk for cash and cash equivalents, based on the domicile of the parent
bank, at the reporting date was:
Carrying Amount
2025 2024
£’000 £’000
United Kingdom
173,741
184,964
Republic of Ireland
126,636
92,287
Netherlands
25,656
12,048
Finland
16,194
15,940
Spain
3,457
3,267
France
50,080
50,924
395,764
359,430
The majority of the Group’s cash on deposit and cash balances is held with financial institutions that have
an upper investment grade credit rating.
2025 2024
£’000 £’000
Gross amounts of cash and cash equivalents
472,000
464,434
Amounts set off in the balance sheet*
(76,236)
(105,004)
Net amounts of cash and cash equivalents in the balance sheet
395,764
359,430
* The Group has netting arrangements in place with Bank of Ireland and HSBC Bank with cash balances and overdrawn positions being
netted.
The maximum exposure to credit risk for fixed-term cash deposits, based on the domicile of the parent
bank, at the reporting date was:
Carrying Amount
2025 2024
£’000 £’000
United Kingdom
100,000
150,000
164
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
21. Financial Instruments and Financial Risk continued
Foreign Currency Risk Management
Transactional foreign exchange risk arises from foreign currency transactions, assets and liabilities.
Group operations manage foreign exchange trading risks against their functional currencies. The majority
of trade conducted by the Group’s Irish, Dutch, Finnish and Spanish businesses is in euro. Sterling is the
principal currency for the Group’s UK businesses. Currency risks are regularly monitored and managed
by utilising forward foreign currency contracts as appropriate for settling liabilities arising from the
purchase of goods for resale in non-functional currencies. The majority of transactions entered into by
Group entities are denominated in functional currencies and no significant level of hedging is required.
A proportion of the Group’s net assets are denominated in euro. This is reflected in profit after tax
reserves retained in euro denominated trading and finance companies which gives rise to translation
differences on conversion to sterling. Borrowings made in a non-functional currency are swapped into
a functional currency.
Sensitivity Analysis
A 10% strengthening of the sterling exchange rate against the euro exchange rate at the balance sheet
date would have decreased equity and profit after tax by the amount shown below. This assumes that all
variables, in particular the results and financial position of each euro functional currency entity and
interest rates, remained constant. A 10% weakening of the sterling exchange rate against the euro
exchange rate would have an equal and opposite effect on the amounts shown below on the basis that all
variables remain constant.
Equity Profit after tax
£’000 £’000
31 December 2025
10% strengthening of sterling currency against the euro
(86,456)
(8,820)
31 December 2024
10% strengthening of sterling currency against the euro
(74,518)
(7,360)
Hedging
The Group has exposure to changes in interest rates on certain debt instruments and can hedge an
element of this risk by entering into interest rate swaps. There were £Nil contracts outstanding at
31 December 2025 (2024: £Nil).
Interest Rate Risk
The majority of the Group’s ongoing operations are financed from a mixture of cash generated from
operations and borrowings. Bank borrowings are initially secured at floating interest rates and interest
rate risk is monitored on an ongoing basis. Interest rate swaps are used to manage interest rate risk
when considered appropriate having regard to the interest rate environment.
In September 2018, the Group raised €160m (31 December 2025: £139.6m before costs) through an
issue of unsecured senior notes in the US Private Placement market with ten and twelve-year maturities
at an average fixed annual coupon of 2.5% and used the proceeds received to refinance existing debt.
The issue of these notes diversified the Group’s sources of funding by re-entering the US Private
Placement market, extended the maturity profile of debt and provided greater certainty over the cost of
debt for an extended period at attractive rates. The Group is also exposed to interest rate risk on its
deposits.
Cash Flow Sensitivity Analysis for Variable Rate Debt Instruments
A reduction of 50 basis points in interest rates at the reporting date would have increased profit before
tax and equity by £0.4m (2024: £0.5m) on the basis of the Group’s gross debt of £619.1m at 31 December
2025. £82.4m of the gross debt is exposed to variable rates with the interest rate on the US senior notes
of £139.3m and the implicit interest rate on lease liabilities of £397.4m is fixed. An increase of 50 basis
points, on the same basis, would have an equal and opposite effect.
Capital Management
The capital structure of the Group comprises share capital, reserves and net debt.
The overall approach is to optimise shareholder value by leveraging the balance sheet to an appropriate
level having regard to economic and trading conditions in the Group’s markets, the level of internal cash
generation, credit conditions generally and interest rates payable.
The Group’s capital structure is kept under ongoing review and the debt component is actively managed
with a view to maintaining diversified sources of funding, significant undrawn facilities and cash deposits.
The Directors monitor the Company’s share price and may from time to time exercise their powers to
make market purchases of the Company’s own shares, at price levels which they consider to be in the
best interests of the shareholders generally, after taking account of the Company’s overall financial
position.
The principal bank covenants are a net debt (excluding leases) to equity ratio limit of 85%, EBITDA interest
cover of three times, which excludes interest on lease liabilities, and a minimum shareholders’ equity of
£1.0bn at 31 December 2025. The US notes covenants, which are tested excluding the impact of leases,
are a net debt to equity ratio limit of 85%, EBITDA interest cover of four times and a minimum
shareholders’ equity of £1.0bn at 31 December 2025.
The Group has complied with these covenants throughout the reporting period. There are no indications
that the Group would have difficulties complying with the covenants when they will next be tested as at
the 30 June 2026 interim reporting date.
At 31 December 2025 the net debt to equity ratio was 7.5% (2024: 8.2%) as the Group was in a net debt
position of £123.4m (2024: net debt of £131.7m). At 31 December 2025 the Group had net cash (before
lease liabilities) of £274.0m (2024: £272.1m) and therefore the net debt to equity ratio covenant was not
applicable. Shareholders’ equity was £1.65bn at 31 December 2025 (2024: £1.60bn). EBITDA for the year
was £319.2m (2024: £292.0m) and underlying EBITDA interest cover for 2025 was 41.5 times (2024: not
applicable as the Group had net credit interest in the year). For covenant purposes the interest cover for
2025 was not applicable as the Group had net credit interest (excluding lease interest) in the year (2024:
not applicable as the Group had net credit interest (excluding lease interest) in the year).
165
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
21. Financial Instruments and Financial Risk continued
Funding and Liquidity
The Group has cash resources at its disposal through the holding of fixed-term cash deposits of £100.0m (2024: £150.0m) and cash balances of £395.8m at the year end (2024: £359.4m) which together with
undrawn bank facilities of £285.0m (2024: £270.8m) and cash flow from operation provides flexibility in financing its operations.
The following are the undiscounted contractual maturities of financial liabilities, including interest payments:
31 December 2025
Between Between Greater
Carrying Contractual Within 1 and 2 and than
Amount
Cash Flow
*
1 Year 2 Years 5 Years 5 Years
£’000 £’000 £’000 £’000 £’000 £’000
Non-Derivative Financial Liabilities
Bank loans
51,499
58,563
1,659
1,659
55,245
–
Bank credit facilities
30,929
31,672
31,672
–
–
–
US senior notes
139,311
152,532
3,469
3,469
145,594
–
Lease liabilities
397,408
460,289
90,514
82,489
177,623
109,663
Trade and other payables (Note 24)
399,525
399,525
399,525
–
–
–
Deferred consideration payable on acquisition of businesses
1,398
1,600
1,600
–
–
–
Derivative Financial Instruments
Other derivatives
–
–
–
–
–
–
1,020,070
1,104,181
528,439
87,617
378,462
109,663
* Includes interest based on the rates in place at 31 December 2025.
31 December 2024
Between Between Greater
Carrying Contractual Within 1 and 2 and than
Amount
Cash Flow
*
1 Year 2 Years 5 Years 5 Years
£’000 £’000 £’000 £’000 £’000 £’000
Non-Derivative Financial Liabilities
Bank loans
56,053
68,699
2,449
2,449
63,801
–
Bank credit facilities
40,625
41,881
41,881
–
–
–
Bank overdrafts
8,375
8,421
8,421
–
–
–
US senior notes
132,319
148,243
3,297
3,297
74,144
67,505
Lease liabilities
403,728
470,076
85,795
79,103
180,336
124,842
Trade and other payables (Note 24)
354,319
354,319
354,319
–
–
–
Deferred consideration payable on acquisition of businesses
4,136
4,503
3,703
800
–
–
Derivative Financial Instruments
Other derivatives
5
5
5
–
–
–
999,560
1,096,147
499,870
85,649
318,281
192,347
* Includes interest based on the rates in place at 31 December 2024.
166
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Annual Report and Accounts 2025
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Strategic Report
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Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
21. Financial Instruments and Financial Risk continued
Funding and Liquidity continued
The following table indicates the periods in which cash flows associated with derivatives that are cash flow hedges are expected to occur.
31 December 2025
Carrying Expected 6 Months 6 to 1 to 2 2 to 3 3 to 4 4 to 5
Amount Cash Flow or Less 12 Months Years Years Years Years
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Other derivatives
3
3
3
–
–
–
–
–
31 December 2024
Carrying Expected 6 Months 6 to 1 to 2 2 to 3 3 to 4 4 to 5
Amount Cash Flow or Less 12 Months Years Years Years Years
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Other derivatives
(5)
(5)
(5)
–
–
–
–
–
22. Derivatives
2025 2024
£’000 £’000
Included in current assets and current liabilities:
Fair value of other derivatives
3
(5)
Nature of Derivative Instruments as at 31 December 2025
Notional
Notional receivable
payable amount amount of
of contracts contracts Fair value Fair value
outstanding outstanding asset liability
Hedge Period
Nature of hedging instrument
£’000 £’000 £’000 £’000
Foreign Currency Forwards*
December 2025 – January 2026
Forward purchase of foreign currency liabilities
2,151
2,151
3
–
* The fair value of foreign currency forwards (derivative financial instruments) are shown as current assets of £3,000 in the balance sheet.
Nature of Derivative Instruments as at 31 December 2024
Notional
Notional payable receivable
amount of amount of
contracts contracts Fair value Fair value
outstanding outstanding asset liability
Hedge Period
Nature of hedging instrument
£’000 £’000 £’000 £’000
Foreign Currency Forwards*
December 2024 – January 2025
Forward purchase of foreign currency liabilities
1,140
1,140
–
(5)
* The fair value of foreign currency forwards (derivative financial instruments) are shown as current liabilities of £5,000 in the balance sheet.
167
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Annual Report and Accounts 2025
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
23. Provisions
2025 2024
£’000 £’000
Non-current liabilities
Insurance provision
5,305
6,156
Dilapidations provision
7,288
6,181
Other provisions
176
705
12,769
13,042
Current liabilities
Insurance provision
1,768
2,051
Disposal provisions
1,372
1,303
Other provisions
950
1,492
4,090
4,846
Insurance
Dilapidations
2025 2024 2025 2024
£’000 £’000 £’000 £’000
At 1 January
8,207
9,930
6,181
4,925
Charge in year
1,980
1,883
927
1,483
Utilised
–
–
(691)
(77)
Released
(773)
(1,102)
(69)
(33)
Acquired (Note 27)
–
–
752
–
Paid during the year
(2,743)
(2,075)
–
–
Foreign exchange
402
(429)
188
(117)
At 31 December
7,073
8,207
7,288
6,181
Non-current
5,305
6,156
7,288
6,181
Current
1,768
2,051
–
–
Disposal Provisions
Other Provisions
Total
2025 2024 2025 2024 2025 2024
£’000 £’000 £’000 £’000 £’000 £’000
At 1 January
1,303
1,366
2,197
3,011
17,888
19,232
Charge in year
–
–
732
–
3,639
3,366
Utilised
–
–
–
(206)
(691)
(283)
Released
–
–
(2,012)
(550)
(2,854)
(1,685)
Acquired (Note 27)
–
–
167
–
919
–
Paid during the year
–
–
–
–
(2,743)
(2,075)
Foreign exchange
69
(63)
42
(58)
701
(667)
At 31 December
1,372
1,303
1,126
2,197
16,859
17,888
Non-current
–
–
176
705
12,769
13,042
Current
1,372
1,303
950
1,492
4,090
4,846
Insurance Provision
The insurance provision relates to actual obligations under the self-insurance elements of the Group’s
overall insurance arrangements which are subject to limits in respect of both individual and aggregate
claims. This provision was based on an independent actuarial valuation. The provision principally covers
the combined public and employer liability claims for the Group’s businesses. The Group has third-party
insurance cover above specific limits for individual claims and has an overall maximum aggregate
payable for all claims for any one year. Given the nature of employer and public liability claims, the
timing of cash outflows can vary significantly. The outflow arising from the payment of claims in 2026
is expected to be at a similar level to 2025. Based on historical experience, it is the Directors best
estimate that the balance of claims which are provided for at 31 December 2025 will be paid over
a two to six-year period.
The incurred but not reported (“IBNR”) element of the insurance provision is classified as non-current
as the normal cycle for settlement of such claims is likely to be more than 12 months from the year end.
Claims no longer being challenged by the Group are classified as current liabilities at year end.
The Group no longer has an unconditional right to defer payment and it is only the timing of the
payment that is uncertain.
Claims in legal process are classified as non-current liabilities at year end as the Group does not control
the extent and duration of the legal process.
Dilapidations Provision
The dilapidations provision covers the cost of reinstating certain Group properties at the end of the lease
term. This is estimated based on the terms of individual leases which set out the conditions relating to
the return of property. The timing of the outflows will match the ending of the relevant leases which range
from two to 20 years.
Disposals Provision
The disposal provision covers the future legal costs in relation to the disposal of the Belgium business.
Other Provisions
Other provisions relate to restructuring, pension contributions, legal provisions, deferred consideration
and Waste Electrical & Electronic Equipment (“WEEE”) provisions. None of these are individually material
to require separate disclosure in the financial statements.
24. Trade and Other Payables
2025 2024
£’000 £’000
Trade payables
304,180
264,328
Accruals
95,345
89,991
399,525
354,319
Social welfare
2,989
2,443
Employee income tax
7,458
6,418
Value added tax
38,416
37,962
448,388
401,142
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
25. Deferred Taxation
Recognised Deferred Tax Assets and Liabilities
Net (assets)/ Net (assets)/
Assets Liabilities liabilities Assets Liabilities liabilities
2025 2025 2025 2024 2024 2024
£’000 £’000 £’000 £’000 £’000 £’000
Property, plant and equipment
(2,747)
37,288
34,541
(2,272)
33,682
31,410
Employee share schemes
(623)
–
(623)
(584)
–
(584)
Other items
(3,950)
1,126
(2,824)
(3,560)
1,071
(2,489)
Intangibles
–
24,029
24,029
–
27,287
27,287
Pension
–
436
436
(1,037)
–
(1,037)
(Assets)/Liabilities
(7,320)
62,879
55,559
(7,453)
62,040
54,587
The increase in the net deferred tax liability reflects a movement in the deferred tax on the pension scheme surplus and an increase in the deferred tax liability in respect of property, plant and equipment offset by a
decrease in the deferred liability on intangibles and an increase in the deferred tax asset on other items.
At 31 December 2025, there were unrecognised deferred tax assets in relation to capital losses of £0.6m (31 December 2024: £0.7m), trading losses of £1.6m (31 December 2024: £1.3m) and deductible temporary
differences of £5.5m (31 December 2024: £5.2m).
Deferred tax assets were not recognised in respect of certain capital losses as they can only be recovered against certain classes of taxable profits. The Directors believe that it is not probable that such profits will
arise in the foreseeable future. The trading losses arose in entities that have incurred losses in recent years and the Directors believe that it is not probable there will be sufficient taxable profits in the relevant entities
against which they can be utilised. Separately, the Directors believe that it is not probable the deductible temporary differences will be utilised.
Analysis of Net Deferred Tax (Asset)/Liability – 2025
Recognised in
Recognised equity/other Foreign Disposal of
Balance in profit comprehensive exchange Arising on Group Balance
1 Jan 25 or loss income retranslation acquisitions businesses 31 Dec 25
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Property, plant and equipment
31,410
2,388
–
743
–
–
34,541
Employee share schemes
(584)
(66)
27
–
–
–
(623)
Other items
(2,489)
(397)
–
109
–
(47)
(2,824)
Intangibles
27,287
(4,942)
–
1,043
641
–
24,029
Pension
(1,037)
525
1,006
(58)
–
–
436
54,587
(2,492)
1,033
1,837
641
(47)
55,559
Analysis of Net Deferred Tax (Asset)/Liability – 2024
Recognised in
Recognised equity/other Foreign
Balance in profit comprehensive exchange Arising on Balance
1 Jan 24 or loss income retranslation acquisitions 31 Dec 24
£’000 £’000 £’000 £’000 £’000 £’000
Property, plant and equipment
29,220
2,972
–
(762)
(20)
31,410
Employee share schemes
(883)
257
42
–
–
(584)
Other items
(1,014)
1,180
–
37
(2,692)
(2,489)
Intangibles
28,901
(4,573)
–
(920)
3,879
27,287
Pension
(2,655)
511
1,081
26
–
(1,037)
53,569
347
1,123
(1,619)
1,167
54,587
Financial Statements
Notes to the Group Financial Statements continued
26. Movement in Working Capital
Other
Inventory receivables Other payables Total
£’000 £’000 £’000 £’000
At 1 January 2024
361,598
262,763
(400,251)
224,110
Translation adjustment
(11,427)
(8,174)
12,511
(7,090)
Acquisitions (Note 27)
60,206
39,764
(20,520)
79,450
Interest accruals
*
–
(87)
(834)
(921)
Movement in 2024
(28,574)
5,754
7,952
(14,868)
At 1 January 2025
381,803
300,020
(401,142)
280,681
Translation adjustment
14,251
10,827
(14,485)
10,593
Acquisitions (Note 27)
(605)
6,777
(5,648)
524
Disposal of Group businesses (Note 27)
(1,313)
(3,593)
3,605
(1,301)
Interest accruals
*
–
(789)
544
(245)
Contingent consideration receivable (Note 27)
–current
–
1,039
1,039
Movement in 2025
1,046
18,186
(31,262)
(12,030)
At 31 December 2025 (current)
395,182
332,467
(448,388)
279,261
Contingent consideration receivable (Note 27)
–non-current
–
10,210
–
10,210
At 31 December 2025 (current and non-current)
395,182
342,677
(448,388)
289,471
* Interest accruals on long-term borrowings are included separately in other payables as accrued interest is paid within 12 months.
27. Acquisition of Subsidiary Undertakings and
Businesses, Acquisition Related Liabilities &
Disposal of Group Businesses
Acquisition of Subsidiary Undertakings and Businesses
On 31 May 2025, the Group acquired 100% of the issued share capital of HSS Hire Ireland Limited (“HSS
Hire Ireland”) from HSS Hire Group. HSS Hire Ireland is a tool and equipment hire specialist operating
from four branches and four customer distribution centres in the Republic of Ireland, offering an
extensive range of conventional hire products as well as specialist equipment with a particular focus on
powered access. Grafton operates the HSS Hire Ireland business as part of Chadwicks, its market-leading
distribution business in the Republic of Ireland. This transaction is in line with our strategy to strengthen
our market positions in existing and adjacent markets and broaden the offering of our Chadwicks
business in the Island of Ireland segment.
The fair value of the net assets acquired have been determined on a provisional basis as these have not
yet been finally determined by the Group. A measurement period adjustment of £1.7m was recorded to
reduce the fair value of property, plant and equipment. Goodwill on the acquisition reflects the anticipated
synergies to be realised as part of the enlarged Group.
The fair values of assets and liabilities acquired in 2025, and adjustments to provisional fair value of
assets and liabilities from previous acquisitions, are set out below:
HSS Hire
Ireland Other Total
£’000 £’000 £’000
Property, plant and equipment (Note 13a)
9,286
–
9,286
Right-of-use asset (Note 13b)
4,045
–
4,045
Intangible assets – computer software (Note 15)
16
–
16
Intangible assets – trade names (Note 15)
1,514
–
1,514
Intangible assets – customer relationships (Note 15)
3,616
–
3,616
Inventories (Note 26)
162
(767)
(605)
Trade and other receivables (Note 26)
**
6,777
–
6,777
Trade and other payables (Note 26)
(5,648)
–
(5,648)
Provisions (Note 23)
(753)
(166)
(919)
Lease liability
(4,045)
–
(4,045)
Corporation tax liability
(939)
–
(939)
Deferred tax liability (Note 25)
(641)
–
(641)
Cash acquired
3,528
–
3,528
Net assets acquired
16,918
(933)
15,985
Goodwill (Note 12)
7,472
933
8,405
Consideration
24,390
–
24,390
Satisfied by:
Cash paid
24,390
–
24,390
Net cash outflow – arising on acquisitions
Cash consideration
24,390
–
24,390
Less: cash and cash equivalents acquired
(3,528)
–
(3,528)
20,862
–
20,862
*
* Adjustments totalling £0.9m were made to provisional fair values in the period relating to the acquisition of Salvador Escoda which
completed in 2024.
** The fair value of acquired trade receivables is £6.8m. The gross contractual amount for trade receivables due is £7.1m, with a loss
allowance of £0.3m recognised on acquisition.
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Strategic Report
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Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
27. Acquisition of Subsidiary Undertakings and
Businesses, Acquisition Related Liabilities &
Disposal of Group Businesses continued
The acquisition would have contributed revenue of £26.5m (unaudited) and operating profit of £2.9m
(unaudited) in the year ended 31 December 2025 on the assumption that it had been acquired on
1 January. The acquisition completed in 2025 contributed revenues of £14.5m and operating profit of
£1.4m for the period from the date of acquisition until the year end.
In 2025, the Group incurred acquisition costs of £1.3m (2024: £3.0m) relating to actual and target
acquisitions. These have been included in operating costs in the Group Income Statement.
The fair value of identifiable net assets acquired in 2025 was £16.0m (2024: £60.5m).
Fair Value Consideration Goodwill
£’000 £’000 £’000
Total acquisitions
15,985
24,390
8,405
Any adjustments to provisional fair value of assets and liabilities including recognition of any newly
identified assets and liabilities, will be made within 12 months of respective acquisition dates. There were
adjustments totalling £0.9m made to provisional fair values in the period relating to the acquisition of
Salvador Escoda which completed in 2024.
Acquisition Related Liabilities
Deferred consideration relates to the acquisiton of TA Windows Limited in December 2023 and is payable
within three years from the date of acquisition. In addition to this deferred consideration, the Group has
an agreement to make further payments to certain selling shareholders who, as part of the agreement,
are required to remain in employment with the Group for the deferred period.
Analysis of Deferred Consideration on Acquisition of Businesses
2025 2024
£’000 £’000
At 1 January
4,136
4,890
Paid during the year
(2,992)
(2,145)
Unwinding of discount applicable to deferred consideration (Note 7)
167
1,476
Translation adjustment
87
(85)
1,398
4,136
2025 2024
£’000 £’000
Non-current
–
599
Current
1,398
3,537
1,398
4,136
Disposal of Group Businesses
On 31 May 2025, the Group disposed of MFP Sales Limited, the Irish-based manufacturer of PVC
drainage and roofline products, to Wienerberger AG which mainly operates through Pipelife Ireland
Solutions Limited. As a result, the net assets of the Group increased by £8.1m representing an overall
profit on disposal after costs of disposal. The profit on the disposal reflects the cash consideration
received of £9.2m and deferred cash receivable of £11.2m offset by the net book value of the assets
being disposed of £5.4m.
Contingent consideration receivable relates to a variable earn-out component and is based on future
purchases by the Group. The fair value is calculated based on historical trading volumes and is
discounted to present value using market derived discount rates. The fair value is sensitive to change
in the future trading volumes with the former Group business.
The disposal of the business does not meet the definition of a discontinued operation and therefore
is not disclosed as such. The consolidated results of 2025 include five months of operating profit from
the MFP business amounting to £1.0m (Year to 31 December 2024: £3.8m).
The carrying values of assets and liabilities disposed in 2025 are set out below:
Total
£’000
Property, plant and equipment (Note 13a)
1,400
Inventories (Note 26)
1,313
Trade and other receivables (Note 26)
3,593
Trade and other payables (Note 26)
(3,605)
Corporation tax asset
118
Deferred tax liability (Note 25)
(47)
Cash disposed
2,588
Net assets disposed
5,360
Cash consideration received
(9,188)
Contingent consideration receivable
(11,249)
Profit on disposal of Group businesses, before disposal costs
(15,077)
Amounts recognised in the year within Exceptional Items (Note 4)
Gross profit on disposal of Group businesses
15,077
Disposal costs
*
(6,959)
8,118
* Disposal costs include redundancy and closure costs together with professional and legal fees related to the divestment
of the business.
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02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
27. Acquisition of Subsidiary Undertakings and
Businesses, Acquisition Related Liabilities &
Disposal of Group Businesses continued
Net cash inflow – arising on disposal
Cash consideration received
9,188
Less: cash and cash equivalents disposed
(2,588)
6,600
Analysis of Contingent Consideration Receivable on Disposal of Group Businesses
The following table shows the analysis of contingent consideration receivable on the disposal
of businesses, which is disclosed in trade and other receivables:
2025
£’000
At 1 January
–
Contingent consideration receivable recognised on disposal of Group businesses
11,249
Unwinding of discount applicable to contingent consideration receivable (Note 7)
572
Translation adjustment
430
12,251
2025
£’000
Non-current
10,210
Current
2,041
12,251
28. Reconciliation of Net Cash Flow to Movement
in Net (Debt)
2025 2024
£’000 £’000
Net increase/(decrease) in cash and cash equivalents
32,124
(24,069)
Net movement in fixed-term cash deposits
(50,000)
(50,000)
Net movement in derivative financial instruments
8
–
Bank loans acquired with subsidiaries (Note 27)
–
(42,330)
Lease liabilities acquired with subsidiaries (Note 27)
(4,045)
(24,413)
Movement in debt and lease financing
40,250
49,531
Change in net (debt) resulting from cash flows
18,337
(91,281)
Translation adjustment
(10,042)
8,869
Movement in net (debt) in the year
8,295
(82,412)
Net (debt) at 1 January
(131,675)
(49,263)
Net (debt) at 31 December
(123,380)
(131,675)
171
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
28. Reconciliation of Net Cash Flow to Movement in Net (Debt) continued
Analysis of Net Debt – 2025
Balance Acquisition Disposals Non-cash Translation Balance
1 Jan 25 Cash flow (Note 27) (Note 27) movements adjustment 31 Dec 25
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Cash and cash equivalents
359,430
22,676
3,528
(2,588)
–
12,718
395,764
Bank overdrafts
(8,375)
8,508
–
–
–
(133)
–
Fixed-term cash deposits
150,000
(50,000)
–
–
–
–
100,000
Interest bearing loans and borrowings:
Non-current liabilities
(188,372)
7,409
–
–
–
(9,847)
(190,810)
Current liabilities
(40,625)
12,194
–
–
–
(2,498)
(30,929)
Total interest-bearing loans and borrowings
(228,997)
19,603
–
–
–
(12,345)
(221,739)
Lease liabilities
(403,728)
96,891
(4,045)
–
(76,244)
(10,282)
(397,408)
Derivatives – current
(5)
8
–
–
–
–
3
Net (debt)
(131,675)
97,686
(517)
(2,588)
(76,244)
(10,042)
(123,380)
Analysis of Net Debt – 2024
Balance Acquisition Non-cash Translation Balance
1 Jan 24 Cash flow (Note 27) movements adjustment 31 Dec 24
£’000 £’000 £’000 £’000 £’000 £’000
Cash and cash equivalents
383,939
(17,275)
1,614
–
(8,848)
359,430
Bank overdrafts
–
(3,867)
(4,541)
–
33
(8,375)
Fixed-term cash deposits
200,000
(50,000)
–
–
–
150,000
Interest bearing loans and borrowings:
Non-current liabilities
(204,219)
6,704
–
–
9,143
(188,372)
Current liabilities
–
1,452
(42,330)
–
253
(40,625)
Total interest-bearing loans and borrowings
(204,219)
8,156
(42,330)
–
9,396
(228,997)
Lease liabilities
(428,978)
86,666
(24,413)
(45,291)
8,288
(403,728)
Derivatives – current
(5)
–
–
–
–
(5)
Net (debt)
(49,263)
23,680
(69,670)
(45,291)
8,869
(131,675)
172
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
29. Capital Expenditure Commitments
At the year end the following commitments authorised by the Board had not been provided for in the
financial statements:
2025 2024
£’000 £’000
Contracted for
26,068
8,362
Not contracted for
43,352
52,038
69,420
60,400
Capital expenditure commitments are analysed by geography in the table below:
2025 2024
£’000 £’000
UK
22,028
26,428
Ireland
27,323
22,500
Netherlands
13,368
6,533
Finland
3,667
2,819
Spain
3,034
2,120
69,420
60,400
Amounts relating to intangibles included above
9,226
7,275
30. Pension Commitments
A number of defined benefit and defined contribution pension schemes are operated by the Group and
the assets of the schemes are held in separate trustee administered funds.
The actuarial reports are not available for public inspection.
IAS 19 – Employee Benefits
The Group operates three defined benefit schemes in Ireland and one defined benefit scheme in the UK
(the “DB Schemes”). All schemes are closed to new entrants and to future accrual.
Two Irish schemes were closed to future accrual of DB benefits in 2023 and one Irish scheme closed to
future accrual of DB benefits in 2022. The UK scheme was closed to future accrual of DB benefits in
2020.
An Annuity Buy-In transaction took place on the 12 December 2023 in which the Irish DB schemes fully
insured their benefit obligation in respect of pensioners at that date.
The DB Schemes are administered by trusts that are legally separated from the Group. The Trustees of
the DB Schemes are required by law to act in the interest of the members of the DB Schemes. The
Trustees of the DB Schemes are responsible for the investment policy of the schemes.
Under the DB Schemes, employees are entitled to receive an annual payment on attainment of normal
retirement age, which in Ireland is 67 or 68 depending on year of birth and in the UK is age 65 for the
majority of benefits. The level of benefit payable depends on length of service. In the case of schemes
closed to accrual, it depends on future revaluation from the date members ceased accruing benefits up
to retirement. The DB Schemes provide post-retirement pension increases in the UK only and spouse’s
death in retirement pensions in both Ireland and the UK. No other post-retirement benefits are provided to
employees.
The Group also provides other long-term benefits to qualifying employees in the Netherlands which are
unfunded and included in the liabilities shown.
Defined Benefit Pension Schemes – Principal Risks
Through its defined benefit pension schemes the Group is exposed to a number of risks the most
significant of which are detailed below:
Asset Volatility
Under IFRS the assets of the Group’s defined benefit pension schemes are reported at fair value. The
majority of the schemes’ assets comprise of bonds and investments in diversified growth funds which
may fluctuate significantly from one reporting period to the next.
Discount Rates
The discount rates used in calculating the present value of scheme liabilities are determined by reference
to market yields at the balance sheet date of high-quality corporate bonds consistent with the currency
and term of the retirement benefit obligations. Changes to the discount rates can have a very significant
impact on the amount of defined benefit scheme liabilities.
Price Inflation
Some of the Group’s pension obligations are inflation linked. Higher price inflation will lead to higher
liabilities.
Longevity Risk
In the majority of cases the Group’s defined benefit pension schemes provide benefits for life. Increases
in life expectancy will therefore give rise to higher liabilities.
The nature of these risks is not materially different across all schemes.
173
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Annual Report and Accounts 2025
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Strategic Report
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Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
30. Pension Commitments continued
Financial Assumptions
The financial assumptions used to calculate the retirement benefit liabilities under IAS 19 were as follows:
At 31 Dec 2025 At 31 Dec 2025 At 31 Dec 2024 At 31 Dec 2024
Irish schemes UK schemes Irish schemes UK schemes
Valuation method
Projected Unit
Projected Unit
Projected Unit
Projected Unit
Rate of increase in salaries
n/a
n/a
n/a
n/a
Rate of increase of pensions in payment
–
2.70%
–
3.00%
Rate of revaluation of non-retired member benefits up to retirement
1.75%-1.85%
2.30%
1.80%-1.85%
2.60%
Discount rate
4.20%
5.50%
3.45%
5.50%
Inflation rate increase*
1.80%
2.30%/2.80%
1.85%
2.60%/3.10%
* The inflation assumption shown for the UK is based on both the Consumer Price Index (CPI) and the Retail Price Index (RPI).
The future life expectancy at age 65 for males and females (currently aged 55 and 65), inherent in the mortality tables used for the 2025 and 2024 year end IAS 19 disclosures are as follows:
2025
Mortality (years)
Ireland
UK
2024
Mortality (years)
Ireland
UK
Future Pensioner aged 65:
Male
22.5
21.4
Future Pensioner aged 65:
Male
22.1
20.9
Female
25.0
24.6
Female
24.8
24.4
Current Pensioner aged 65:
Male
22.0
20.9
Current Pensioner aged 65:
Male
21.7
20.5
Female
24.3
23.9
Female
24.1
23.8
174
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
30. Pension Commitments continued
Scheme Assets
The assets in these schemes are analysed below:
2025 2024
%
£’000
%
£’000
UK equities
1
1,770
1
1,418
Overseas (non-UK) equities
12
20,934
14
24,943
Government bonds
28
48,679
29
51,348
Corporate bonds
7
12,264
7
12,349
Diversified growth funds
7
12,834
8
14,376
Liability driven investment (“LDI”)
25
43,934
21
37,439
Annuity buy-in
19
32,835
19
34,384
Cash/money market funds
1
1,070
1
2,118
100
174,320
100
178,375
Actuarial value of liabilities
(166,766)
(177,034)
Asset in the schemes
7,554
1,341
Represented by:
Retirement benefit assets
11,574
10,932
Retirement benefit obligations
(4,020)
(9,591)
7,554
1,341
The net pension scheme asset of £7.6m is shown in the Group balance sheet at 31 December 2025 as (i) retirement benefit obligations (non-current liabilities) of £4.0m of which £3.3m relates to a UK scheme and
£0.7m to a Euro scheme and (ii) retirement benefit assets (non-current assets) of £11.6m relating to the other Euro schemes.
The net pension scheme asset of £1.3m is shown in the Group balance sheet at 31 December 2024 as (i) retirement benefit obligations (non-current liabilities) of £9.6m of which £8.8m relates to a UK scheme and
£0.8m to a Euro scheme and (ii) retirement benefit assets (non-current assets) of £10.9m relating to the other Euro schemes.
The retirement benefit assets have been recognised in accordance with IFRIC 14 ‘The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction’ as it has been determined that the
Group has an unconditional right to a refund of the surplus assets if the schemes are run off until the last member has left the scheme.
In 2023, the Trustees of the three Irish defined benefit pension schemes purchased annuities from one of Ireland’s leading life insurance companies to match the benefits being paid to existing pensioners. Under
these contracts, the insurer will reimburse the schemes for payments to these pensioners into the future. These insurance contracts are held by the trustees of the three schemes and represent assets of the
schemes. This transaction has reduced the Company’s exposure to pension risk by removing the longevity and investment risk associated with this portion of the Company’s Defined Benefit liabilities. The value of
the liabilities relating to these pensioners will exactly match the value of the associated annuity contracts.
175
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Annual Report and Accounts 2025
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Strategic Report
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Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
30. Pension Commitments continued
The actual return on plan assets is set out below:
2025 2024
£’000 £’000
Return on plan assets excluding interest income
(6,410)
(9,753)
Interest income on plan assets
7,827
7,151
Actual return on plan assets
1,417
(2,602)
Plan assets are comprised as follows:
2025 2025 2025 2024 2024 2024
Quoted Unquoted Total Quoted Unquoted Total
£’000 £’000 £’000 £’000 £’000 £’000
Equity – UK*
–
1,770
1,770
–
1,418
1,418
Equity – Other*
–
20,934
20,934
–
24,943
24,943
Bonds – Government*
–
48,679
48,679
–
51,348
51,348
Bonds – Corporate*
–
12,264
12,264
–
12,349
12,349
Cash/money market funds*
–
1,070
1,070
–
2,118
2,118
Diversified growth funds*
–
12,834
12,834
–
14,376
14,376
Annuity buy-in
–
32,835
32,835
–
34,384
34,384
LDI*
–
43,934
43,934
–
37,439
37,439
Total
–
174,320
174,320
–
178,375
178,375
* Assets are holdings in unitised funds where the underlying assets are liquid/quoted investments.
Sensitivity of Pension Liability to Judgements/Assumptions
Assumption
Change in Assumptions
Impact on Scheme Liabilities
Discount rate
Increase by 0.25%/Decrease by 0.25%
Reduce by 3.0%/Increase by 3.1%
Rate of inflation
Increase by 0.25%
Increase by 1.5%
Life expectancy
Increase by 1 year
Increase by 3.5%
The above sensitivity analysis is derived through changing an individual assumption while holding all other assumptions constant.
176
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
30. Pension Commitments continued
The following table provides a reconciliation of the scheme assets (at bid value) and the actuarial value of scheme liabilities:
Year ended 31 December
Assets
Liabilities
Net asset/(deficit)
2025 2024 2025 2024 2025 2024
£’000 £’000 £’000 £’000 £’000 £’000
At 1 January
178,375
195,104
(177,034)
(200,931)
1,341
(5,827)
Interest income on plan assets
7,827
7,151
–
–
7,827
7,151
Contributions by employer
2,629
2,604
–
–
2,629
2,604
Benefit payments
(12,653)
(11,976)
12,653
11,976
–
–
Other long-term expense
–
–
(46)
(91)
(46)
(91)
Interest cost on scheme liabilities
–
–
(7,859)
(7,456)
(7,859)
(7,456)
Administration costs
(194)
(37)
–
–
(194)
(37)
Remeasurements
Actuarial (loss)/gain arising from:
– experience variations
–
–
(1,095)
1,369
(1,095)
1,369
– financial assumptions
–
–
10,495
14,637
10,495
14,637
– demographic assumptions
–
–
331
(814)
331
(814)
Return on plan assets excluding interest income
(6,410)
(9,753)
–
–
(6,410)
(9,753)
Translation adjustment
4,746
(4,718)
(4,211)
4,276
535
(442)
At 31 December
174,320
178,375
(166,766)
(177,034)
7,554
1,341
Related deferred tax (liability)/asset (net)
(436)
1,037
Net pension asset
7,118
2,378
Expense Recognised in Income Statement
2025 2024
£’000 £’000
Other long-term benefit expense
46
91
Administration costs
194
37
Total operating expense
240
128
Net finance costs on pension scheme obligations
32
305
Total expense recognised in income statement
272
433
177
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
30. Pension Commitments continued
Recognised Directly in Other Comprehensive Income
2025
£’000
2024
£’000
Remeasurement gain on pensions 3,321 5,439
Deferred tax on pensions (1,006) (1,081)
2,315 4,358
In Ireland, the DB schemes are assessed against the Funding Standard (the statutory minimum funding
requirement). Funding Proposals were in place for all schemes and these have now ended. As at
31 December 2025, all Irish DB schemes are closed to future accrual. Ongoing funding valuations of the
Schemes are required every three years. Funding valuations were completed on 1 January 2025. The
recommended contributions to the schemes for the calendar year 2026 were nil as a result of this
valuation.
The Irish DB Schemes hold annuity contracts to insure the benefit obligation in respect of their members
who were pensioners on 12 December 2023. No other explicit external contracts have been entered into
to provide liability matching such as longevity swaps or annuity purchase.
In the UK, the DB schemes are subject to the Statutory Funding Objective under the Pensions Act 2004.
Valuations of the DB Schemes are carried out at least once every three years to determine whether or not
the Statutory Funding Objectives are met. As part of the process, the Group must agree with the Trustees
of the DB Schemes the contributions to be paid to address any shortfalls against the Statutory Funding
Objectives. The next valuation for the UK scheme is 31 December 2026.
The contributions expected to be paid to the Group’s UK defined benefit schemes in 2026 total
approximately £2.5m.
In prior years, where some schemes were open to future accrual, employees paid contributions equal to a
percentage of pensionable salary. The percentage payable varied by scheme. Triennial actuarial
valuations were carried out to determine the Group’s contribution rate required under the schemes.
Average Duration and Scheme Composition
Ireland
UK
2025
2024
2025
2024
Average duration of defined benefit obligation (years)
14.00
15.00
12.00
12.00
2025
2024
Active plan participants
0%
0%
Deferred plan participants
48%
56%
Retirees
52%
44%
100%
100%
31. Share-Based Payments
The Group’s employee share schemes are equity settled share-based payments as defined in IFRS 2
Share-Based Payments. The total share-based payments expense for the year charged to the income
statement was £0.8m (2024: £1.2m), analysed as follows:
2025
2024
LTIP
367
671
UK SAYE Scheme
446
491
813
1,162
Details of the schemes operated by the Group are set out below:
Long Term Incentive Plan (“LTIP”)
The Group’s 2011 long-term incentive share scheme expired in April 2021. The Grafton Group plc 2021
Long Term Incentive Plan (the “plan”) was approved by shareholders at the AGM of the Company held on
28 April 2021. Details of the plan are set out in the Report of the Remuneration Committee on Directors’
Remuneration on pages 87 to 111. Awards over 843,932 Grafton Units were granted under the 2021 Plan
on 19 March 2025 (2024: 637,662 on 20 March 2024). In addition, awards over 23,524 and 4,802 Grafton
Units were granted under the 2021 Plan on 8 October 2024 and 28 November 2024 respectively.
A summary of the material awards granted on 19 March 2025 and 20 March 2024 is set out below:
LTIP 2025 LTIP 2024
Grant date 19 March 2025 20 March 2024
Share price at date of award
£8.72
£9.78
Exercise price
n/a
n/a
Number of employees
66
58
Number of share awards
843,932
637,662
Vesting period
3 years
3 years
Expected volatility
28.6%
29.2%
Award life
3 years
3 years
Expected life
3 years
3 years
Risk free rate
4.03%
4.07%
Expected dividends expressed as dividend yield
4.19%
3.45%
Valuation model – EPS
Black Scholes/
Black Scholes/
Valuation model – TSR
Monte-Carlo
Monte-Carlo
Fair value of share award – EPS component
£7.69
£8.82
Fair value of share award – TSR component
£3.52
£5.65
The expected volatility, referred to above, is based on volatility over the last three years. The expected life
is equal to the vesting period. The risk free rate of return is the yield on bonds from the Bank of England
for a term consistent with the life of the award at the grant date. The fair values of share awards granted
under the 2021 Plan were determined taking account of peer group total share return volatility together
with the above assumptions.
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Corporate Governance
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Financial Statements
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Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
31. Share-Based Payments continued
A reconciliation of all share awards granted under the LTIP is as follows:
2025 2024
Numbers Numbers
Outstanding at 1 January
1,461,055
1,374,973
Granted in year
843,932
665,988
Forfeited and expired
(699,443)
(555,220)
Exercised
(16,512)
(24,686)
Outstanding at 31 December
1,589,032
1,461,055
At 31 December 2025 and 31 December 2024 none of the remaining LTIP awards were exercisable as the
conditions for exercise had not been met at the year end.
UK SAYE Scheme
Options over 759,447 (2024: 762,425) Grafton Units were outstanding at 31 December 2025, pursuant to
the 2025 and the existing 2024 and 2023 three-year saving contracts under the Grafton Group plc 2021
SAYE Plan at a price of £7.04, £8.02 and £6.83 respectively. These options are normally exercisable within
a period of six months after the third anniversary of the savings contract, being June 2028 for the 2025
SAYE scheme, June 2027 for the 2024 SAYE scheme and June 2026 for the 2023 SAYE scheme.
The number of Grafton Units issued during the year under the 2020 SAYE Scheme was Nil (2024: 44,393)
and the total consideration received amounted to £Nil (2024: £254,000). Options forfeited in the year
were Nil (2024: 14,791).
The number of Grafton Units issued during the year under the 2022 SAYE Scheme was 205,756
(2024: 2,662) and the total consideration received amounted to £1,648,000 (2024: £21,000). Options
forfeited in the year were 13,093 (2024: 29,169).
The number of Grafton Units issued during the year under the 2023 SAYE Scheme was 3,086
(2024: 1,092) and the total consideration received amounted to £21,000 (2024: £7,000).
Options forfeited in the year were 35,506 (2024: 41,132).
The number of Grafton Units issued during the year under the 2024 SAYE Scheme was 1,494 (2024: Nil)
and the total consideration received amounted to £12,000 (2024: £Nil). Options forfeited in the year were
44,008 (2024: 29,441).
The number of Grafton Units issued during the year under the 2025 SAYE Scheme was 15 and the total
consideration received amounted to £Nil. Options forfeited in the year were 22,185.
A reconciliation of options granted under the 2022 SAYE, which was under the Grafton Group plc 2021
SAYE Plan, is as follows:
2025 2024
Option price Option price
Numbers
£
Numbers
£
Outstanding at 1 January
218,849
7.93
250,680
7.93
Forfeited
(13,093)
7.93
(29,169)
7.93
Exercised
(205,756)
7.93
(2,662)
7.93
Outstanding at 31 December
–
218,849
A reconciliation of options granted under the 2023 SAYE, which was under the Grafton Group plc 2021
SAYE Plan, is as follows:
2025 2024
Option price Option price
Numbers
£
Numbers
£
Outstanding at 1 January
273,815
6.83
316,039
6.83
Forfeited
(35,506)
6.83
(41,132)
6.83
Exercised
(3,086)
6.83
(1,092)
6.83
Outstanding at 31 December
235,223
273,815
A reconciliation of options granted under the 2024 SAYE, which was under the Grafton Group plc 2021
SAYE Plan, is as follows:
2025 2024
Option price Option price
Numbers
£
Numbers
£
Outstanding at 1 January
269,761
8.02
–
–
Granted
–
8.02
299,202
8.02
Forfeited
(44,008)
8.02
(29,441)
8.02
Exercised
(1,494)
8.02
–
8.02
Outstanding at 31 December
224,259
269,761
A reconciliation of options granted under the 2025 SAYE, which was under the Grafton Group plc 2021
SAYE Plan, is as follows:
2025
Option price
Numbers £
Outstanding at 1 January
–
–
Granted
322,165
7.04
Forfeited
(22,185)
7.04
Exercised
(15)
7.04
Outstanding at 31 December
299,965
There were no SAYE grants in 2021.
The weighted average share price for the period was £9.19 (2024: £9.85).
At 31 December 2025 none of the 2025 or the 2024 UK SAYE shares were exercisable other than
as permitted under the applicable Plan rules. The weighted average remaining life is 1.8 years
(2024: 1.8 years).
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
32. Accounting Estimates and Judgements
In the opinion of the Directors, the following significant judgement was exercised in the preparation of the
financial statements:
Recognition of Surplus on Defined Benefit Pension Schemes
Where a surplus on a defined benefit scheme arises, the rights of the trustees to prevent the Group
obtaining a refund of that surplus in the future are considered in determining whether it is necessary to
restrict the amount of the surplus that is recognised. The ROI defined benefit schemes are in surplus
under IAS 19 valuation methodology as at 31 December 2025. The directors are satisfied that these
amounts meet the requirements of recoverability on the basis that paragraph 11 (b) of IFRIC 14 applies,
enabling a refund of the surplus assuming the gradual settlement of the scheme liabilities over time until
all members have left the scheme, and a surplus of £11.6m (2024: £10.9m) has been recognised.
In the opinion of the Directors, the key sources of estimation uncertainty were as follows:
Goodwill
The Group has capitalised goodwill of £659.1m at 31 December 2025 (2024: £634.3m) as detailed in Note
12. Goodwill is required to be tested for impairment at least annually or more frequently if changes in
circumstances or the occurrence of events indicate potential impairment exists. Impairment testing was
completed as at 31 December 2025 for all cash generating units and, for two of the cash generating units,
as at 30 June 2025 and 30 September 2025. At both dates impairment indicators existed and the
30 September 2025 impairment test was completed just prior to the reallocation of goodwill to new cash
generating units on the change to operating segments explained in Note 2. The Group uses value-in-use
calculations to determine the recoverable amount of cash generating units containing goodwill. Value-in-
use is calculated as the present value of future cash flows. In calculating value-in-use, management
estimation is required in forecasting cash flows of the segments and in selecting an appropriate discount
rate and the nominal growth rate in perpetuity. In the case of one of the cash generating units, the
Directors considered that the headroom of recoverable amount over carrying value was sensitive to
changes in those estimates and assumptions, as set out in Note 12.
Retirement Benefit Obligations
The Group operates a number of defined benefit retirement plans which are as set out in Note 30. The
Group’s total obligation in respect of defined benefit plans is calculated by independent, qualified
actuaries and updated at least annually and totals £166.8m at 31 December 2025 (2024: £177.0m). Plan
assets at 31 December 2025 amounted to £174.3m (2024: £178.4m) giving a net scheme asset of £7.6m
(2024: asset of £1.3m). The size of the obligation is sensitive to actuarial assumptions. The key
assumptions are the discount rate, the rate of inflation, life expectancy, pension benefits and rate of
salary increases. The sensitivities of the principal assumptions used to measure defined benefit pension
scheme obligations are set out in Note 30.
Rebate Income
Rebate arrangements with suppliers are a common feature of trading in the distribution industry and the
Group has agreements with individual suppliers related to purchases of goods for resale.
Rebates are accounted for as a deduction from the cost of goods for resale and are recognised in the
financial statements based on the amount that has been earned in respect of each individual supplier
up to the balance sheet date. Rebates receivable are determined using established methodologies and
are only recognised in the income statement where there is an agreement in place with an individual
supplier, any related performance conditions have been met and the goods have been sold to a
third-party customer.
Rebates receivable from individual suppliers are typically calculated by applying an agreed percentage to
the purchase price shown on the supplier invoice for products purchased for resale. A small proportion
of rebates receivable are based on volumes purchased with certain supplier agreements providing for
a stepped increase in rebates if purchases reach predetermined targets within a specified time period.
The majority of rebate arrangements cover a calendar year which coincides with the financial year of the
Group and this reduces the requirement to estimate purchase volumes from suppliers when estimating
rebates receivable at the year end. Where estimation is used in the calculation of rebates receivable it is
done on a consistent and prudent basis, based upon management’s knowledge and experience of the
suppliers and historic collection trends.
Rebates are classified in the balance sheet as follows:
Inventories
• The carrying value of inventories at the balance sheet date is reduced to reflect rebates receivable
relating to inventory that has not been sold at the balance sheet date.
Trade and Other Receivables
• The amount of rebate receivable at the balance sheet date is classified as other receivables and
separately disclosed in Note 17, Trade and Other Receivables.
Trade and Other Payables
• Where the Group has the legal right to set-off rebates receivable against amounts owing to individual
suppliers, any rebates receivable at the balance sheet date are netted against amounts payable to these
suppliers and the amount, if material, is separately disclosed in Note 24, Trade and Other Payables.
There were no amounts offset in this way as at 31 December 2025 or 31 December 2024.
Valuation of Inventory
Inventory comprises raw materials, finished goods and goods purchased for resale. Provisions are made
against slow moving, obsolete and damaged inventories for which the net realisable value is estimated to
be less than cost. Determining the net realisable value of the wide range of products held in many
locations requires estimation to be applied to determine the likely saleability of products and the potential
prices that can be achieved. In arriving at any provisions for net realisable value, the Directors take into
account the age, condition, quality of the products in stock and recent sales trends. The actual realisable
value of inventory may differ from the estimated value on which the provision is based. The Group held
provisions in respect of inventory balances at 31 December 2025 amounting to £67.8m (2024: £54.6m).
IFRS 16 “Leases”
Where the Group has an option to extend or terminate a lease, management uses its judgement to
determine whether such an option would be reasonably certain to be exercised. Management considers
all facts and circumstances, including past practice and costs that would be incurred if an option were to
be exercised, to help them determine the lease term. Management have also applied judgements in
assessing the discount rate, which are based on the incremental borrowing rate. Such judgements could
impact lease terms and associated lease liabilities. The Group availed of the practical expedient available
on transition to IFRS 16 not to reassess whether a contract is or contains a lease. Accordingly, the
definition of a lease in accordance with IAS 17 and the guidance in IFRIC 4 will continue to be applied to
those leases entered into or modified before 1 January 2019.
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Corporate Governance
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Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Group Financial Statements continued
32. Accounting Estimates and Judgements continued
Valuation of Investment Property
The fair values derived are based on current estimated market values for the properties, being the
amount that would be received from a sale of the assets in an orderly transaction between market
participants. The valuation of the Group’s investment property portfolio is inherently subjective as it
requires among other factors, the estimation of the expected rental income in to the future, an
assessment of a property’s ability to remain attractive to existing and prospective tenants in a changing
market and a judgement to be reached on the attractiveness of a building, its location and the
surrounding environment. Further detail on the determination of fair value of investment properties is set
out in Note 13.
33. Related Party Transactions
The principal related party transactions that require disclosure under IAS 24: Related Party Disclosures
relate to subsidiaries, key management personnel and post-employment benefit plans.
Subsidiaries
Sales to and purchases from, together with outstanding payables and receivables to and from,
subsidiaries are eliminated in the preparation of the consolidated financial information in accordance with
IFRS 10, Consolidated Financial Statements.
Key Management Personnel
The term key management personnel for 2025 refers to the Board of Grafton Group plc and the Group
Management Team. The cost of key management personnel is analysed in Note 6 to the Group Financial
Statements. The Report of the Remuneration Committee on Directors’ Remuneration on pages 87 to 111
provides detailed disclosure (‘unaudited’) for 2025 and 2024 of salaries, fees, performance-related pay,
pension allowance, other benefits and entitlements to awards granted under the Group’s 2021
LTIP schemes.
Post-Employment Benefit Plans
Pension commitments to existing and former employees under defined benefit pension scheme
arrangements are disclosed in Note 30 to the Group Financial Statements.
34. Events after the Balance Sheet Date
The Board has today announced an eighth share buyback programme, commencing 5 March 2026, to
buy back ordinary shares in the Company for an aggregate consideration of up to £25.0m. This buyback
programme will end no later than 31 August 2026, subject to market conditions.
There have been no other material events subsequent to 31 December 2025 that would require
adjustment to or disclosure in this report.
35. Approval of Financial Statements
The Board of Directors approved the Group Financial Statements on pages 126 to 181 on 4 March 2026.
181
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Strategic Report
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Sustainability Statement
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Corporate Governance
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Financial Statements
191-198
Supplementary Information
Financial Statements
Company Balance Sheet
There was a profit after tax of €262.8m (2024: profit of €356.2m) attributable to the parent undertaking for the financial year.
As at 31 December 2025 Notes
2025
€’000
2024
€’000
Fixed assets
Intangible assets 4(a) 276 390
Tangible assets 4(a) 564 755
Right-of-use asset 4(b) 1,256 1,327
Financial assets 5 948,485 948,431
Total fixed assets 950,581 950,903
Current assets
Debtors 6 995,177 1,165,899
Cash at bank and in hand 125,782 113,731
Total current assets 1,120,959 1,279,630
Creditors: amounts falling due within one year 7 (718,372) (991,675)
Net current assets 402,587 287,955
Total assets less current liabilities 1,353,168 1,238,858
Creditors: amounts falling due after one year 7 (1,215) (1,377)
Net assets 1,351,953 1,237,481
Capital and reserves
Called-up share capital 10 9,591 9,890
Share premium account 10 318,239 316,287
Capital redemption reserve 3,501 3,190
Shares to be issued reserve 7,861 8,252
Profit and loss account 1,018,507 905,608
Treasury shares held (5,746) (5,746)
Shareholders’ equity 1,351,953 1,237,481
On behalf of the Board
Eric Born David Arnold
Director Director
4 March 2026
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Strategic Report
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Sustainability Statement
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Corporate Governance
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Financial Statements
191-198
Supplementary Information
Financial Statements
Company Statement of Changes in Equity
Equity
share
capital
€’000
Share
premium
account
€’000
Capital
redemption
reserve
€’000
Shares
to be
issued
reserve
€’000
Profit and
loss
account
€’000
Treasury
shares
€’000
Total
equity
€’000
Year to 31 December 2025
At 1 January 2025 9,890 316,287 3,190 8,252 905,608 (5,746) 1,237,481
Profit after tax for the financial year – – – – 262,839 – 262,839
Total other comprehensive income
Remeasurement loss on pensions (net of tax) – – – – – – –
Total comprehensive income – – – – 262,839 – 262,839
Transactions with owners of the Company recognised directly in equity
Dividends paid – – – – (85,265) – (85,265)
Issue of Grafton Units 12 1,952 – – – – 1,964
Purchase of treasury shares – – – – – (66,057) (66,057)
Cancellation of treasury shares (311) – 311 – (66,057) 66,057 –
Share-based payments charge – – – 991 – – 991
Transfer from shares to be issued reserve – – – (1,382) 1,382 – –
(299) 1,952 311 (391) (149,940) – (148,367)
At 31 December 2025 9,591 318,239 3,501 7,861 1,018,507 (5,746) 1,351,953
Equity
share
capital
€’000
Share
premium
account
€’000
Capital
redemption
reserve
€’000
Shares
to be
issued
reserve
€’000
Profit and
loss
account
€’000
Treasury
shares
€’000
Total
equity
€’000
Year to 31 December 2024
At 1 January 2024 10,303 315,955 2,774 7,983 730,618 (6,285) 1,061,348
Profit after tax for the financial year – – – – 356,184 – 356,184
Total other comprehensive income
Remeasurement loss on pensions (net of tax) – – – – – – –
Total comprehensive income – – – – 356,184 – 356,184
Transactions with owners of the Company recognised directly in equity
Dividends paid – – – – (86,146) – (86,146)
Issue of Grafton Units 3 332 – – – – 335
Purchase of treasury shares – – – – – (95,549) (95,549)
Cancellation of treasury shares (416) 416 (96,088) 96,088 –
Share-based payments charge – – – 1,309 – – 1,309
Transfer from shares to be issued reserve – – – (1,040) 1,040 – –
(413) 332 416 269 (181,194) 539 (180,051)
At 31 December 2024 9,890 316,287 3,190 8,252 905,608 (5,746) 1,237,481
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Corporate Governance
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Financial Statements
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Supplementary Information
Financial Statements
Notes to the Company Financial Statements
1. Basis of Preparation
The financial statements have been prepared on a going concern basis under the historical cost
convention in accordance with the Companies Act 2014 and Generally Accepted Accounting Practice
inthe Republic of Ireland (Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101)).
Note 2 describes the principal accounting policies under FRS 101, which have been applied consistently.
In these financial statements, the Company has applied the exemptions available under FRS 101
inrespect of the following disclosures:
• Cash Flow Statement and related notes;
• Comparative period reconciliations for tangible fixed assets and intangible assets;
• The option to take tangible and intangible assets at deemed cost;
• Disclosures in respect of transactions with wholly-owned subsidiaries;
• Disclosures in respect of financial risk management;
• Disclosure of key management compensation;
• Certain requirements of IAS 1 Presentation of Financial Statements;
• Disclosures required by IFRS 7 Financial Instrument Disclosures;
• Disclosures required by IFRS 13 Fair Value Measurement;
• Certain disclosures required by IFRS 16 Leases; and
• The effects of new but not yet effective IFRSs.
As the consolidated financial statements of Grafton Group plc include the equivalent disclosures, the
Company has also taken the exemptions under FRS 101 available in respect of the following disclosure:
IFRS 2 Share-Based Payments in respect of Group-settled share-based payments.
In accordance with Section 304(2) of the Companies Act 2014, the income statement and related notes
of the parent undertaking have not been presented separately in these financial statements.
2. Accounting Policies
Key Accounting Policies which involve Estimates, Assumptions and Judgements
Preparation of the financial statements requires management to make significant judgements and
estimates. The items in the financial statements where these judgements and estimates have been
madeinclude:
Financial Assets
Investments in subsidiaries are stated at cost less any accumulated impairment and are reviewed
forimpairment if there are any indicators that the carrying value may not be recoverable.
Loans Receivable and Payable
Intercompany loans receivable and payable are initially recognised at fair value. These are subsequently
measured at amortised cost, less any provision for impairment.
Other Material Accounting Policies
Operating Income and Expense
Operating income and expense arises from the Company’s principal activities as a holding company
forthe Group and are accounted for on an accruals basis.
Foreign Currencies
The functional and presentation currency of the Company is euro. Transactions in foreign currencies
aretranslated at the rates of exchange ruling at the transaction date. Monetary assets and liabilities
denominated in foreign currencies are translated into euro at the rates of exchange ruling at the balance
sheet date, with a corresponding charge or credit to the profit and loss account.
Share Issue Expenses
Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from
equity, net of any tax effects.
Share-based Payments
The Company has applied the requirements of Section 8 of FRS 101. The accounting policy applicable
toshare-based payments is addressed in detail on page 138 of the Consolidated Financial Statements.
IFRS 16 Leases
The accounting policy applicable to IFRS 16 leases is addressed in detail on pages 135 and 136 of the
Consolidated Financial Statements.
Treasury Shares
Own equity instruments (i.e. Ordinary Shares) acquired by the Company are deducted from equity and
presented on the face of the Company Balance Sheet. No gain or loss is recognised in profit or loss on
the purchase, sale, issue or cancellation of the Company’s Ordinary Shares.
Dividends
Dividends on Ordinary Shares are recognised as a liability in the Company’s Financial Statements in the
period in which they are approved by the shareholders of the Company.
Dividend Income
Dividend income is recognised when the right to receive payment is established.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
Property, plant and equipment are depreciated over their useful economic life on a straight-line basis
inline with Group policy as noted in Note 1 to the Consolidated Financial Statements.
Intangible Assets (Computer Software)
Acquired computer software is stated at cost less any accumulated amortisation and any accumulated
impairment losses. Cost comprises of purchase price and any other directly attributable costs. Computer
software is recognised in line with the criteria as outlined in Note 1 to the Consolidated Financial
Statements.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash balances held for the purpose of meeting short-term cash
commitments and investments which are readily convertible to a known amount of cash and are subject
to an insignificant risk of change in value. Bank overdrafts are included within creditors falling due within
one year in the Company Balance Sheet.
184
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Company Financial Statements continued
3. Statutory and Other Information
The following items have been charged to the Company income statement:
2025
€’000
2024
€’000
Statutory audit (refer to Note 3 of Group Financial Statements) 78 85
Depreciation (Note 4a) 194 126
Depreciation on right-of-use assets (Note 4b) 249 217
Intangible asset amortisation (Note 4a) 114 97
Directors’ remuneration 4,717 4,794
The interest expense on lease liabilities in the year was €81,000 (2024: €85,000).
The Directors’ remuneration is set out in detail in the Report of the Remuneration Committee on
Directors’ Remuneration on pages 87 to 111.
The average number of persons employed by the Company during the year was 25 (2024: 25).
2025
€’000
2024
€’000
The aggregate remuneration costs of employees were:
Wages and salaries 9,725 7,148
Social welfare costs 299 262
Share-based payments charge 746 907
Defined contribution and pension related costs 152 388
Charged to operating profit 10,922 8,705
Net finance cost on pension scheme obligations – –
Charged to income statement 10,922 8,705
Actuarial loss on pension scheme – –
Total employee benefit cost 10,922 8,705
4. Tangible, Intangible and Right-of-Use Assets
4. (a) Tangible and Intangible Assets
Plant and
Equipment
2025
€’000
Intangible
Assets
2025
€’000
Company Cost
At 1 January 4,138 952
Additions 3 –
At 31 December 4,141 952
Depreciation
At 1 January 3,383 562
Charge for year 194 114
At 31 December 3,577 676
Net book amount
At 31 December 564 276
At 1 January 755 390
4. (b) Right-of-Use Asset
Right-of-Use
Asset
*
€’000
Year ended 31 December 2024
Opening balance at 1 January 2024 1,513
Additions 31
Depreciation charge (217)
Disposals –
Remeasurements –
Closing net book amount 1,327
Year ended 31 December 2025
Opening balance at 1 January 2025 1,327
Additions 178
Depreciation charge (249)
Disposals –
Remeasurements –
Closing net book amount 1,256
* The lease term remaining as at 31 December 2005 is 2.2 years (2024: 2.3 years).
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Corporate Governance
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Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Company Financial Statements continued
5. Financial Assets
Other
Investments
€’000
Investments
insubsidiary
undertakings
€’000
Total
€’000
At 1 January 2024 14 948,300 948,314
Capital contribution – share-based payments – 117 117
At 31 December 2024 14 948,417 948,431
Capital contribution – share-based payments – 54 54
At 31 December 2025 14 948,471 948,485
Other investments represent sundry equity investments at cost less provision for impairment.
6. Debtors
2025
€’000
2024
€’000
Amounts falling due within one year:
Amounts owed by subsidiary undertakings
^
989,458 1,162,046
Current income tax 884 406
Deferred tax 30 –
Other receivables 3,687 1,340
994,059 1,163,792
^ Amounts owed by subsidiary undertakings are interest free and repayable on demand.
2025
€’000
2024
€’000
Amounts falling due after one year:
Other receivables 1,118 2,107
7. Creditors
2025
€’000
2024
€’000
Amounts falling due within one year:
Trade and other payables 1,137 67
Accruals 11,562 8,877
Lease liability
*
258 215
Bank overdraft 87,217 100,574
Amounts owed to subsidiary undertakings
^
618,198 881,942
718,372 991,675
2025
€’000
2024
€’000
Amounts falling due after one year:
Deferred tax – 31
Lease liability
* 1,215 1,346
1,215 1,377
* The Company’s incremental borrowing rate applied to the lease liability as at 31 December 2025 was 5.2% (2024: 5.3%).
^ Amounts owed to subsidiary undertakings are interest free and repayable on demand.
The maturity analysis of the lease liability is as follows:
2025
€’000
2024
€’000
Year 1 258 215
Year 2 177 212
Year 3 223 141
Year 4 206 191
Year 5 212 201
After year 5 397 601
186
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71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Company Financial Statements continued
8. Deferred Taxation
Recognised Deferred Tax (Assets) and Liabilities
Assets
2025
€’000
Liabilities
2025
€’000
Net (assets)/
liabilities
2025
€’000
Assets
2024
€’000
Liabilities
2024
€’000
Net (assets)/
liabilities
2024
€’000
Other items (30) – (30) – 31 31
Balance
1 Jan 25
€’000
Recognised in
income
€’000
Recognised
in other
comprehensive
income
€’000
Foreign
exchange
retranslation
€’000
Arising on
acquisitions
€’000
Balance
31 Dec 25
€’000
Other items 31 (61) – – – (30)
Balance
1 Jan 24
€’000
Recognised in
income
€’000
Recognised
in other
comprehensive
income
€’000
Foreign
exchange
retranslation
€’000
Arising on
acquisitions
€’000
Balance
31 Dec 24
€’000
Other items 16 15 – – – 31
9. Pension Commitments
A defined benefit scheme and defined contribution pension schemes are operated by the Company and
the assets of the schemes are held in separate trustee administered funds.
The actuarial reports are not available for public inspection.
IAS 19 – Employee Benefits
An actuarial valuation was updated to 31 December 2025 by a qualified independent actuary.
Financial Assumptions
The financial assumptions used to calculate the retirement benefit liabilities under IAS 19 were as follows:
At 31 Dec 2025
Company
scheme
At 31 Dec 2024
Company
scheme
Valuation Method
Projected
Unit
Projected
Unit
Rate of increase of pensions in payment – –
Discount rate 4.20% 3.45%
Inflation rate increase 1.80% 1.85%
The Company’s obligations to the scheme at the end of 2025 and 2024 were limited to providing a
pension to an executive who retired in 2009 on a fixed pension.
Year ended 31 December
Assets Liabilities Net asset/(deficit)
2025
€’000
2024
€’000
2025
€’000
2024
€’000
2025
€’000
2024
€’000
At 1 January 841 927 (841) (927) – –
Interest income on
planassets 28 28 – – 28 28
Benefit payments (76) (76) 76 76 – –
Interest cost on
scheme liabilities – – (28) (28) (28) (28)
Remeasurement
(losses)/gains (22) (38) 22 38 – –
At 31 December 771 841 (771) (841) – –
Related deferred tax
asset (net) – – – – – –
Net pension liability 771 841 (771) (841) – –
No contributions are expected to be paid to the Company’s defined benefit scheme in 2025 (2024: €Nil).
187
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115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Company Financial Statements continued
10. Share Capital and Share Premium
Details of equity share capital and share premium are set out below and in Note 18 to the Group
FinancialStatements.
Issue Price
Number of
Shares
2025
Nominal Value
€’000
2024
Nominal Value
€’000
Issued and fully paid:
Ordinary shares
At 1 January 197,802,776 9,890 10,303
Issued under UK SAYE scheme
*
210,351 11 2
2021 Long Term Incentive Plan
April 2021 LTIP Awards 16,512 1 1
Share Buyback
Share Buyback – Programme 4 – – (276)
Share Buyback – Programme 5 (171,302) (9) (140)
Share Buyback – Programme 6 (3,293,879) (165) –
Share Buyback – Programme 7 (2,735,984) (137) –
Share Buyback – LTIP Awards – – –
At 31 December 191,828,474 9,591 9,890
Total nominal share capital issued 9,591 9,890
* Refer to Note 31 to the Group Financial Statements which outlines the issue price of the SAYE Schemes.
Share Premium
Company
2025
€’000
2024
€’000
At 1 January 316,287 315,955
Premium on issue of shares under UK SAYE scheme 1,952 332
At 31 December 318,239 316,287
11. Share-Based Payments
Details of Share-Based Payments are set out in Note 31 of the Group Financial Statements.
12. Related Party Transactions
The principal related party transactions that require disclosure under IAS 24: Related Party Disclosures
relate to subsidiaries and post-employment benefit plans.
Subsidiaries
The consolidated accounts of the Company and its subsidiaries include the following transactions that
have been eliminated on consolidation:
• Management charges made by the Company to its subsidiaries of €10.3m (2024: €8.1m) for the year
ended 31 December 2025;
• Loans, which are repayable on demand, were granted to and by the Company to its subsidiaries; and
• Dividend income in the year of €273.4m (2024: €361.8m) was received from Group
subsidiarycompanies.
Post-Employment Benefit Plans
Pension commitments to existing and former employees under defined benefit pension scheme
arrangements are disclosed in Note 9 to the Company Financial Statements.
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71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Company Financial Statements continued
13. Principal Operating Subsidiaries
The principal operating subsidiaries operating in Ireland are:
Name of Company Nature of Business Registered Office
Chadwicks Group Limited Building materials
distribution
c/o Grafton Group plc, The Hive, Carmanhall
Road, Sandyford Business Park, Dublin 18,
D18Y2C9
Woodie’s DIY Limited DIY, home and garden
retailing
c/o Grafton Group plc, The Hive, Carmanhall
Road, Sandyford Business Park, Dublin 18,
D18Y2C9
The Company owns 100% of the share capital of its principal operating subsidiary undertakings operating
in Ireland.
The principal operating subsidiaries operating in the United Kingdom are:
Name of Company Nature of Business Registered Office
Macnaughton Blair
Limited
Building materials
distribution
10 Falcon Road, Belfast, BT12 6RD,
NorthernIreland
Selco Trade Centres
Limited
Building materials
distribution
First Floor, Boundary House, 2 Wythall Green
Way, Wythall, Birmingham, United Kingdom,
B476LW
LSDM Limited Building materials
distribution
Ground Floor, Boundary House, 2 Wythall Green
Way, Wythall, Birmingham, United Kingdom,
B476LW
CPI Mortars Limited Mortar manufacturing Ground Floor, Boundary House, 2 Wythall Green
Way, Wythall, Birmingham, United Kingdom,
B476LW
TG Lynes Limited Building materials
distribution
Ground Floor, Boundary House, 2 Wythall Green
Way, Wythall, Birmingham, United Kingdom,
B476LW
AVC (StairBox) Limited Wooden staircase
manufacturing
Ground Floor, Boundary House, 2 Wythall Green
Way, Wythall, Birmingham, United Kingdom,
B476LW
The Company owns 100% of the share capital of its principal subsidiary undertakings operating in the UK.
The principal operating subsidiaries in the Netherlands are:
Name of Company Nature of Business Registered Office
Isero B.V. Ironmongery, tools and
fixings distribution
Dirk Verheulweg 3, 2742 JR, Waddinxveen,
theNetherlands
Gunters en Meuser B.V. Ironmongery, tools and
fixings distribution
Egelantiersgracht 2-6, 1015 RL Amsterdam,
theNetherlands
Polvo B.V. Ironmongery, tools and
fixings distribution
Tradeboulevard 5 a, 4761RL Zevenbergen,
theNetherlands
GKL Ventilatie Techniek B.V. Ventilation systems Touwbaan 1 H, 2352CZ Leiderdorp
The Company owns 100% of the share capital of its principal subsidiary undertakings operating in the
Netherlands.
The principal operating subsidiaries in Finland are:
Name of Company Nature of Business Registered Office
IKH Oy Technical trades
distribution
Keskustie 26, 61850 Kauhajoki, Finland
IKH Retail Oy Technical trades
distribution
Keskustie 26, 61850 Kauhajoki, Finland
The Company owns 100% of the share capital of its principal subsidiary undertakings operating
inFinland.
The principal operating subsidiary in Spain is:
Name of Company Nature of Business Registered Office
Salvador Escoda HVAC distribution Carrer de Nàpols, 249, L’Eixample, 08013
Barcelona, Spain
The Company owns 100% of the share capital of its principal subsidiary undertaking operating inSpain.
189
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Financial Statements
Notes to the Company Financial Statements continued
14. Section 357 Guarantees
Each of the following Irish registered subsidiaries of the Company, whose registered office is c/o Grafton
Group plc, The Hive, Carmanhall Road, Sandyford Business Park, Dublin 18, D18 Y2C9 (company number:
8149) may avail of the exemption from filing its statutory financial statements for the year ended
31 December 2025 as permitted by section 357 of the Companies Act 2014 and, if any these Irish
registered subsidiaries of the Company elects to avail of this exemption, there will be in force an
irrevocable guarantee from the Company in respect of all commitments entered into by such wholly-
owned subsidiary, including amounts shown as liabilities (within the meaning of section 357 (1) (b) of
theCompanies Act 2014) in such wholly-owned subsidiary’s statutory financial statements for the year
ended 31 December 2025:
Athina Limited, Atlantic DIY Limited, Beralt Developments Limited, Cardston Properties Limited,
Chadwicks Group Limited, Chadwicks Holdings Limited, Chadwicks Limited, Cheshunt Unlimited
Company, Cork Builders Providers Limited, CPI Limited, Daly Brothers (North-East) Limited, Davies
Limited, Deltana Limited, Denningco Limited, Eddie’s Hardware Limited, F & T Buckley (Holdings)
Unlimited Company, Garvey Builders Providers Unlimited Company, Grafton Group European Holdings
Limited, Grafton Group Finance plc, Grafton Group Management Services Limited, Grafton Group
Investments Unlimited Company, Grafton Group Holdings Unlimited Company, Grafton Group Secretarial
Services Limited, Grafton Group Treasury Limited, Haylen Investments Limited, Heiton Buckley Limited,
Heiton Group plc, Jarkin Properties Limited, Jarsen Distribution Limited, Lacombe Properties Limited,
Market Hardware Unlimited Company, MFP Plastics Limited, Paddy Power (Kilbarry) Unlimited Company,
Panelling Centre Limited, Plumbland Limited, Powlett Properties Limited, Resadale Properties Limited,
Rooneys Homevalue Limited, Sam Hire Holdings Unlimited Company, Sitetech Building Products Limited,
Stettler Properties Limited, Telford Group Limited, Telfords (Portlaoise) Limited, Tiska Limited, Titanium
Limited, Topez Limited, W & S Timber Components Unlimited Company, Weeksbury Limited, Woodies DIY
(Irl) Limited and Woodie’s DIY Limited.
15. Other Guarantees
The Company has declared and assumes joint and several liability for any obligations arising from the
legal acts of Grafton Holding Netherlands BV, Isero B.V., Gunters en Meuser B.V., Polvo B.V., Polvo Real
Estate B.V., GKL Ventilatie Techniek B.V. and Regts B.V., in accordance with article 2:403 paragraph (f)
ofthe Dutch Civil Code and such declarations will be filed at the Dutch commercial register (Kamer van
Koophandel) in accordance with article 2:403 paragraph (g).
The Company has given guarantees in respect of the bank borrowings of subsidiary undertakings which
amounted to €220.3m at the balance sheet date. The guarantee is over bank debt of €60.3m and US
senior notes of €160.0m. The Company has also guaranteed certain property lease obligations of
subsidiary undertakings.
16. Approval of Financial Statements
The Board of Directors approved the Company Financial Statements in respect of the year ended
31 December 2025 on 4 March 2026.
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Financial Statements
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Supplementary Information
Supplementary Financial Information
Not covered by Independent Auditors’ Report
Alternative Performance Measures
Certain financial information set out in these consolidated year-end financial statements is not defined
under International Financial Reporting Standards (IFRS). These key Alternative Performance Measures
(APMs) represent additional measures in assessing performance and for reporting both internally and to
shareholders and other external users. The Group believes that the presentation of these APMs provides
useful supplemental information which, when viewed in conjunction with IFRS financial information,
provides readers with a more meaningful understanding of the underlying financial and operating
performance of the Group.
None of these APMs should be considered as an alternative to financial measures drawn up in
accordance with IFRS.
The key APMs of the Group are set out below. As amounts are reflected in £’m some immaterial rounding
differences may arise. Numbers that refer to 2024 are available in the 2024 Annual Report.
The term “Adjusted” means before exceptional items, acquisition related items and unwinding of discount
applicable to contingent consideration receivable. These items do not relate to the underlying operating
performance of the business and therefore to enhance comparability between reporting periods and
businesses, management do not take these items into account when assessing the underlying
profitability of the Group.
Acquisition related items comprise deferred consideration payments relating to the retention of former
owners of businesses acquired, transaction costs and expenses, professional fees for new and target
acquisitions, adjustments to previously estimated earn outs, impairment charges related to intangible
assets recognised on acquisition of businesses and goodwill impairment charges. Customer
relationships, technology and brands amortisation, the impact of unwinding acquisition related deferred
consideration to present value and any associated tax are considered by management to form part of the
total spend on acquisitions or are non-cash items resulting from acquisitions and therefore are also
included as adjusting items.
APM Description
Adjusted Operating
Profit/EBITA
Profit before amortisation of intangible assets arising on acquisitions,
acquisition related items, exceptional items, net finance expense and income
tax expense.
Adjusted Operating
Profit/EBITA Before
Property Profit
Profit before profit on the disposal of Group properties, amortisation of
intangible assets arising on acquisitions, acquisition related items,
exceptional items, net finance expense and income tax expense.
Adjusted Operating
Profit/EBITA Margin
Before Property Profit
Adjusted operating profit/EBITA before property profit as a percentage
ofrevenue.
Adjusted Profit
BeforeTax
Profit before amortisation of intangible assets arising on acquisitions,
acquisition related items, exceptional items and income tax expense. In the
current year the definition has been refined to include unwinding of discount
applicable to contingent consideration receivable without requiring
restatement for prior year as contingent consideration receivable arose
during the current year.
APM Description
Adjusted Profit After Tax Profit before amortisation of intangible assets arising on acquisitions,
acquisition related items and exceptional items but after deducting the
income tax expense. In the current year the definition has been refined to
include unwinding of discount applicable to contingent consideration
receivable without requiring restatement for prior year as contingent
consideration receivable arose during the current year.
Average Capital
Employed
The average sum of total equity and net debt at each period end.
Capital Turn Revenue for the previous 12 months divided by average capital employed
(where capital employed is the sum of total equity and net debt at each
period end).
Constant Currency Constant currency reporting is used by the Group to eliminate the
translational effect of foreign exchange on the Group’s results. To arrive at
the constant currency change, the results for the prior period are retranslated
using the average exchange rates for the current period and compared to the
current period reported numbers.
Dividend Cover Group earnings per share divided by the total dividend per share for the Group.
EBITDA Earnings before exceptional items, acquisition related items, net finance
expense, income tax expense, depreciation and intangible assets amortisation.
EBITDA (rolling 12 months) is EBITDA for the previous 12 months.
EBITDA Interest Cover EBITDA divided by net bank/loan note interest.
Free Cash Conversion Free cash flow as a percentage of adjusted operating profit.
Free Cash Flow Cash generated from operations less replacement capital expenditure (net of
disposal proceeds), less interest paid (net), income taxes paid, deferred
consideration paid and payment of lease liabilities and includes contingent
consideration received on the disposal of Group businesses. In the current
year the definition has been refined to include contingent consideration
received without requiring restatement for prior year as deferred
consideration arose during the current year.
Gearing The Group net (cash)/debt divided by the total equity attributable to owners
of the Parent times 100, expressed as a percentage.
Like-for-like Revenue Like-for-like revenue is a measure of underlying revenue performance for a
selected period. Branches contribute to like-for-like revenue once they have
been trading for more than twelve months. Acquisitions contribute to
like-for-like revenue once they have been part of the Group for more than
12months. When branches close, or where a business is disposed of,
revenue from the date of closure, for a period of 12 months, is excluded from
the prior year result.
Liquidity The Group’s accessible cash, including any undrawn revolving bank facilities.
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Corporate Governance
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Financial Statements
191-198
Supplementary Information
APM Description
Net (Debt)/Cash Net (debt)/cash comprises current and non-current interest-bearing loans
andborrowings, lease liabilities, fixed-term cash deposits, cash and cash
equivalents and current and non-current derivative financial instruments (net).
Operating Profit/
EBITMargin
Profit before net finance expense and income tax expense as a percentage
ofrevenue.
Adjusted Return on
Capital Employed
Adjusted operating profit divided by average capital employed (where capital
employed is the sum of total equity and net debt at each period end) times 100.
Adjusted Earnings Per
Share
A measure of underlying profitability of the Group. Adjusted profit after tax is
divided by the weighted average number of Grafton Units in issue, excluding
treasury shares.
Adjusted Operating Profit/EBITA Before Property Profit
2025
£’m
2024
£’m
Revenue 2,519.6 2,282.3
Operating profit 174.8 152.6
Property (profit) (5.9) (4.0)
Exceptional items (8.1) –
Acquisition related items 1.5 4.6
Amortisation of intangible assets arising on acquisitions 22.0 20.3
Adjusted operating profit/EBITA before property profit 184.3 173.5
Adjusted operating profit/EBITA margin before property profit 7.3% 7.6%
Operating Profit/EBIT Margin
2025
£’m
2024
£’m
Revenue 2,519.6 2,282.3
Operating profit 174.8 152.6
Operating profit/EBIT margin 6.9% 6.7%
Adjusted Operating Profit/EBITA & Margin
2025
£’m
2024
£’m
Operating profit 174.8 152.6
Exceptional items (8.1) –
Acquisition related items 1.5 4.6
Amortisation of intangible assets arising on acquisitions 22.0 20.3
Adjusted operating profit/EBITA 190.2 177.5
Adjusted operating profit/EBITA margin 7.5% 7.8%
Adjusted Profit Before Tax
2025
£’m
2024
£’m
Profit before tax 165.1 152.5
Exceptional items (8.1) –
Acquisition related items 1.5 4.6
Amortisation of intangible assets arising on acquisitions 22.0 20.3
Unwinding of discount applicable to deferred consideration payable 0.2 1.5
Unwinding of discount applicable to contingent consideration receivable (0.6) –
Adjusted profit before tax 180.1 178.9
Adjusted Profit After Tax
2025
£’m
2024
£’m
Profit after tax for the financial year 136.6 122.0
Exceptional items (8.1) –
Acquisition related items 1.5 4.6
Amortisation of intangible assets arising on acquisitions 22.0 20.3
Tax on amortisation of intangible assets arising on acquisitions (4.9) (4.6)
Unwinding of discount applicable to deferred consideration payable 0.2 1.5
Unwinding of discount applicable to contingent consideration receivable (0.6) –
Adjusted profit after tax 146.6 143.8
Capital Turn
2025
£’m
2024
£’m
Revenue 2,519.6 2,282.3
Average capital employed 1,750.0 1,716.5
Capital turn – times 1.4 1.3
Dividend Cover
2025
£’m
2024
£’m
Group adjusted EPS – basic (pence) 75.43 71.78
Group dividend (pence) 37.75 37.00
Group dividend cover – times 2.0 1.9
Supplementary Financial Information continued
Not covered by Independent Auditors’ Report
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Strategic Report
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Sustainability Statement
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Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Supplementary Financial Information continued
Not covered by Independent Auditors’ Report
Reconciliation of Profit to EBITDA
2025
£’m
2024
£’m
Profit after tax for the financial year 136.6 122.0
Exceptional items (8.1) –
Acquisition related items 1.5 4.6
Net finance expense 9.7 0.1
Income tax expense 28.6 30.5
Depreciation 125.8 112.4
Intangible asset amortisation 25.1 22.3
EBITDA 319.2 292.0
EBITDA Interest Cover
2025
£’m
2024
£’m
EBITDA 319.2 292.0
Net bank/loan note interest including interest on lease liabilities 7.7 (0.1)
EBITDA interest cover – times 41.5 n/a
EBITDA Interest Cover (excluding interest on lease liabilities)
2025
£’m
2024
£’m
EBITDA 319.2 292.0
Net bank/loan note interest excluding interest on lease liabilities (7.5) (15.1)
EBITDA interest cover – times N/A N/A
Free Cash Flow
2025
£’m
2024
£’m
Cash generated from operations 310.3 298.3
Replacement capital expenditure (21.5) (23.9)
Proceeds on sale of property, plant and equipment 1.7 1.3
Proceeds on sale of properties held for sale/investment properties 3.6 4.4
Interest received 17.4 23.4
Interest paid (24.3) (22.5)
Payment of lease liabilities (81.7) (71.6)
Deferred acquisition consideration paid (3.0) (2.1)
Income taxes paid (34.2) (29.0)
Free cash flow 168.3 178.2
Free Cash Conversion
2025
£’m
2024
£’m
Free cash flow 168.3 178.2
Adjusted operating profit 190.2 177.5
Free cash conversion 88% 100%
Gearing
2025
£’m
2024
£’m
Total equity attributable to owners of the Parent 1,648.7 1,596.2
Group net debt 123.4 131.7
Gearing 7.5% 8.2%
Liquidity
2025
£’m
2024
£’m
Cash and cash equivalents 395.8 359.4
Fixed-term cash deposits 100.0 150.0
Less: cash held against letter of credit (4.0) (4.0)
Accessible cash 491.8 505.4
Undrawn revolving bank facilities 285.0 270.8
Liquidity 776.8 776.2
Cash Outflow on Dividends and Share Buyback, excluding transaction costs
2025
£’m
2024
£’m
Dividend payment 72.6 73.2
Purchase of treasury shares, excluding transaction costs 56.6 80.9
Exclude LTIP share purchase – –
Cash outflow on dividends and share buyback, excluding transaction costs 129.2 154.1
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Corporate Governance
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Financial Statements
191-198
Supplementary Information
Like-for-like revenue
2025
£’m
2024
£’m
2024/2023 revenue 2,282.3 2,319.2
Organic growth 22.1 (52.5)
Organic growth – new branches 3.0 5.5
Total organic growth 25.1 (47.0)
Acquisitions 194.6 47.2
Foreign exchange 17.6 (37.1)
2025/2024 revenue 2,519.6 2,282.3
Like-for-like movement (organic growth, excluding new branches, as % prior
year revenue) 1.0% (2.3%)
Net (Debt)
2025
£’m
2024
£’m
Cash and cash equivalents 395.8 359.4
Bank overdrafts – (8.4)
Interest-bearing loans (non-current) (190.8) (188.4)
Interest-bearing loans (current) (30.9) (40.6)
Lease liabilities (non-current) (320.2) (331.6)
Lease liabilities (current) (77.2) (72.2)
Derivatives 0.0 (0.0)
Fixed-term cash deposits 100.0 150.0
Net (Debt) (123.4) (131.7)
Net Debt to EBITDA
2025
£’m
2024
£’m
EBITDA 319.2 292.0
Net debt 123.4 131.7
Net debt to EBITDA – times 0.39 0.45
Adjusted Return on Capital Employed
2025
£’m
2024
£’m
Operating profit 174.8 152.6
Exceptional items (8.1) –
Acquisition related items 1.5 4.6
Amortisation of intangible assets arising on acquisitions 22.0 20.3
Adjusted operating profit 190.2 177.5
Total equity – current period end 1,648.7 1,596.2
Net debt – current period end 123.4 131.7
Capital employed – current period end 1,772.1 1,727.9
Total equity – prior period end 1,596.2 1,655.8
Net debt – prior period end 131.7 49.3
Capital employed – prior period end 1,727.9 1,705.1
Average capital employed 1,750.0 1,716.5
Adjusted return on capital employed 10.9% 10.3%
Net cash – Before leases
2025
£’m
2024
£’m
Net (debt) – after leases (123.4) (131.7)
Lease liability 397.4 403.7
Net cash – before leases 274.0 272.1
Technical Guidance for 2026 Financial Year (unaudited)
Interest costs: c. £14m-£15m but dependent on rate of reduction of
interest rates by Central Banks together with impact of
corporate development activity
Effective tax rate: Underlying tax rate of c.19.5% subject to acquisitions and
change in assumptions in respect of prior years
Depreciation and asset amortisation
(pre-IFRS 16):
c. £50m
Depreciation and amortisation including
right-of-use assets (leases) and acquired
intangibles:
c. £160m
Gross replacement capital expenditure: c. £30m–£35m
Organic development capital expenditure: c. £25m–£30m
Supplementary Financial Information continued
Not covered by Independent Auditors’ Report
194
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Strategic Report
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Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Group Income
Statements
2025
£m
2024
£m
2023
£m
2022
£m
2021
£m
2020
£m
2019
£m
2018
£m
2017
£m
2016
£m
2015
£m
2014
£m
2013
£m
2012
£m
2011
£m
2010
£m
2009
£m
2008
£m
2007
£m
2006
£m
2005
£m
Revenue 2,519.6 2,282.3 2,319.2 2,301.5 2,109.9 2,509.1 2,672.3 2,952.7 2,715.8 2,507.3 2,212.0 2,081.7 1,899.8 1,760.8 1,782.5 1,719.4 1,763.8 2,128.5 2,193.3 2,000.0 1,798.1
Operating profit 184.3 173.5 204.2 260.5 271.2 190.7 197.9 189.6 160.9 137.1 121.5 110.1 77.2 59.1 47.5 41.5 21.3 92.7 180.4 165.4 146.2
Operating margin % 7.3% 7.6% 8.8% 11.3% 12.9% 7.6% 7.4% 6.4% 5.9% 5.5% 5.5% 5.3% 4.1% 3.4% 2.7% 2.4% 1.2% 4.4% 8.2% 8.3% 8.1%
Exceptional items &
restructuring
(costs)/credit 8.1 – – – – (24.7) – (1.9) – (19.7) – – 2.8 (21.2) (27.8) (13.2) (17.0) (13.7) – – –
Intangible
amortisation on
acquisitions &
acquisition related
items (23.5) (24.9) (22.4) (21.6) (18.8) (8.9) (7.0) (5.1) (2.8) (2.2) (0.5) – – – – – – – – – –
Property profit 5.9 4.0 1.3 25.4 16.7 2.6 6.9 4.9 2.7 4.9 6.7 – – – – – – – 5.0 25.9 6.6
Net finance
(expense)/income (9.7) (0.1) 0.4 (12.6) (19.4) (26.9) (25.1) (6.1) (6.4) (5.9) (7.9) (8.9) (12.3) (12.9) (10.8) (6.4) 7.8 (28.0) (24.0) (21.4) (21.4)
Profit before
taxation 165.1 152.5 183.5 251.7 249.8 132.7 172.6 181.3 154.5 114.2 120.3 101.2 67.7 25.0 8.9 21.9 12.1 51.0 161.4 169.9 131.4
Taxation (28.6) (30.5) (34.8) (43.1) (43.0) (25.2) (28.7) (30.9) (26.6) (21.1) (23.8) (21.2) (5.6) 6.6 (6.7) 33.0 (0.2) (5.1) (21.0) (22.0) (17.8)
Profit after taxation 136.6 122.0 148.7 208.6 206.8 107.5 143.9 150.4 127.8 93.1 96.5 80.0 62.1 31.6 2.2 54.9 11.9 45.9 140.4 147.9 113.6
Group Balance Sheets
2025
£m
2024
£m
2023
£m
2022
£m
2021
£m
2020
£m
2019
£m
2018
£m
2017
£m
2016
£m
2015
£m
2014
£m
2013
£m
2012
£m
2011
£m
2010
£m
2009
£m
2008
£m
2007
£m
2006
£m
2005
£m
Capital employed
Goodwill and
intangibles 790.4 769.2 784.0 789.5 744.1 820.0 761.1 726.0 646.1 610.8 554.2 485.9 481.0 476.2 474.9 479.7 489.3 516.0 448.7 400.3 375.4
Property, plant
andequipment
andROUAsset 738.0 745.1 768.6 774.5 740.6 999.5 1,023.2 521.6 504.4 461.7 430.1 423.4 413.4 458.3 471.9 489.6 537.1 603.2 516.1 460.8 427.1
Financial assets 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.1 3.4 3.5 0.2 0.6 0.3 0.2
Net current assets 257.5 253.0 204.1 224.7 142.3 100.3 173.6 161.7 136.3 141.5 149.6 112.8 136.5 133.7 121.2 122.2 122.6 193.0 256.9 225.4 207.8
Other net non-
current liabilities (13.9) (39.5) (51.7) (52.1) (46.5) (97.9) (61.5) (59.8) (49.4) (52.6) (31.3) (40.6) (23.0) (85.9) (58.4) (22.8) (56.4) (69.9) (35.7) (35.8) (52.4)
1,772.1 1,727.9 1,705.1 1,736.7 1,580.6 1,822.0 1,896.5 1,349.6 1,237.5 1,161.5 1,102.7 981.6 1,008.0 982.5 1,009.7 1,072.1 1,096.1 1,242.5 1,186.6 1,051.0 958.1
Financed as follows:
Shareholders’ equity 1,648.7 1,596.2 1,655.8 1,745.6 1,719.6 1,467.0 1,362.7 1,296.5 1,174.6 1,062.1 985.7 902.3 870.3 813.5 821.0 852.5 809.7 827.6 783.0 681.1 557.7
Non-controlling
interest – – – – – – – – – 3.1 3.4 4.0 4.0 4.1 – – – – – – –
Net debt/(cash) 123.4 131.7 49.3 (8.9) (139.0) 355.0 533.8 53.1 62.9 96.3 113.6 75.3 133.7 164.9 188.7 219.6 286.4 414.9 403.6 369.9 400.4
1,772.1 1,727.9 1,705.1 1,736.7 1,580.6 1,822.0 1,896.5 1,349.6 1,237.5 1,161.5 1,102.7 981.6 1,008.0 982.5 1,009.7 1,072.1 1,096.1 1,242.5 1,186.6 1,051.0 958.1
Grafton Group plc Financial History – 2005 to 2025
195
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Group Balance Sheets
2025
£m
2024
£m
2023
£m
2022
£m
2021
£m
2020
£m
2019
£m
2018
£m
2017
£m
2016
£m
2015
£m
2014
£m
2013
£m
2012
£m
2011
£m
2010
£m
2009
£m
2008
£m
2007
£m
2006
£m
2005
£m
Other Information
Net (cash)/debt
pre-IFRS 16 (274.0) (272.1) (379.7) (458.2) (588.0) (181.9) (7.8) 53.1 62.9 96.3 113.6 75.3 133.7 164.9 188.7 219.6 286.4 414.9 403.6 369.9 400.4
Acquisitions &
investments 20.9 109.6 27.9 46.0 123.3 47.5 92.6 73.8 40.4 11.9 98.6 33.1 5.9 17.6 11.1 2.1 6.1 22.4 61.0 59.4 326.7
Purchase of fixed
assets and
investment in
intangible assets 46.2 46.8 52.8 57.8 43.6 35.2 52.4 73.6 81.4 60.4 51.6 46.9 24.7 23.0 30.6 8.2 11.0 62.6 71.7 84.8 68.8
67.1 156.4 80.7 103.8 166.9 82.7 145.0 147.4 121.8 72.3 150.2 80.0 30.6 40.6 41.7 10.3 17.1 85.0 132.7 144.2 395.5
Depreciation
andintangible
amortisation 151.0 134.7 126.0 114.6 115.1 121.4 114.8 49.0 43.5 38.1 33.1 32.5 31.5 33.9 37.1 40.1 44.7 45.0 40.4 37.8 34.5
Financial Highlights
2025
£m
2024
£m
2023
£m
2022
£m
2021
£m
2020
£m
2019
£m
2018
£m
2017
£m
2016
£m
2015
£m
2014
£m
2013
£m
2012
£m
2011
£m
2010
£m
2009
£m
2008
£m
2007
£m
2006
£m
2005
£m
Adjusted EPS
(pence) 75.4 71.8 77.9 96.6 93.0 56.7 62.8 66.0 54.9 47.7 41.2 34.4 22.3 15.1 13.4 15.9 4.8 25.6 57.7 53.2 46.4
Dividend/share
purchase per share
(pence) 37.75 37.0 36.0 33.0 30.5 14.5 19.0 18.0 15.5 13.8 12.5 10.8 8.5 7.0 6.5 6.0 4.5 11.9 15.1 12.8 10.8
Cash flow per share
(pence) 143.8 128.1 128.5 138.4 134.5 96.0 108.8 83.9 72.4 64.0 54.9 48.4 39.5 29.9 24.9 44.8 26.6 39.6 74.1 68.4 60.4
Net assets per
share (pence) 861.7 809.0 805.5 781.4 717.8 613.7 573.0 545.3 495.0 449.5 419.0 387.9 374.4 350.6 354.1 368.5 351.0 359.5 341.2 284.7 234.9
Underlying EBITDA
interest cover
(times) 41.5 n/a n/a 32.2 18.0 11.9 12.1 48.0 48.4 37.9 27.3 19.4 11.0 8.6 6.4 10.0 5.6 4.5 8.2 10.2 9.4
Dividend/EPS cover 2.0 1.9 2.2 2.9 3.0 3.9 3.3 3.7 3.5 3.5 3.3 3.2 2.6 2.2 2.1 2.6 1.1 2.1 3.8 4.2 4.3
Net debt to
shareholders’ funds 8% 8% 3% (1%) (8%) 24% 39% 4% 5% 9% 12% 8% 15% 20% 23% 26% 35% 50% 52% 54% 72%
ROCE 10.9% 10.3% 11.9% 17.2% 19.4% 10.4% 10.8% 15.0% 13.6% 12.5% 12.2% 11.1% 7.8% 6.1% 4.6% 3.8% 1.8% 7.6% 16.1% 16.5% 18.8%
Grafton Group plc Financial History – 2005 to 2025 continued
196
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Corporate & Registered Office The Hive
Carmanhall Road
Sandyford Business Park
Dublin 18, D18 Y2C9
Phone: +353 (0)1 216 0600
Email: email@graftonplc.com
www.graftonplc.com
Registrars MUFG Corporate Markets
PO Box 7117, Dublin 2, Ireland
Phone: +353 (0)1 553 0050
Email: enquiriesIreland@cm.mpms.mufg.com
www.mpms.mufg.com
Solicitors Arthur Cox, Dublin & Belfast
A&L Goodbody, Dublin
Squire Patton Boggs, London
Allen & Overy, Amsterdam
Bankers Bank of Ireland
HSBC Bank plc
ABN AMRO Bank N.V.
Barclays Bank plc
Stockbrokers Goodbody, Dublin
Numis Securities Limited
(trading as Deutsche Numis),
London
Auditors PricewaterhouseCoopers
Company Registration Number 8149
Corporate Information
Financial Calendar 2026
Final Results for 2025 5 March 2026
Annual General Meeting 2026 15 May 2026
Half-Year Results for 2026 3 September 2026
Final Dividend for 2025
Record date 24 April 2026
Payment date 21 May 2026
Annual General Meeting 2026
The Annual General Meeting of the Company will be held at the Irish Management Institute (IMI),
Sandyford Road, Dublin, D16 X8C3, Ireland at 10.30am on Friday, 15 May 2026.
197
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
AGM Annual General Meeting
AI Artificial Intelligence
APM Alternative Performance Measure
ARA Annual Report and Accounts
A&RC Audit and Risk Committee
BES 6001 Framework Standard for Responsible Sourcing
bps Basis Points
BRR Business Risk Register
CBAM Carbon Border Adjustment Mechanism
CEO Chief Executive Officer
CFO Chief Financial Officer
CGU Cash Generating Unit
CNG Compressed Natural Gas
CO
2
e Carbon Dioxide Equivalent
CPI Consumer Price Index
CRR Corporate Risk Register
CSR Corporate Social Responsibility
CSRD Corporate Sustainability Reporting Directive
DB Schemes Defined Benefit Schemes
EBITA Profit before amortisation of intangible assets arising on acquisitions, acquisition
related items, exceptional items, net finance expense and income tax expense
EBITDA Earnings before exceptional items, acquisition related items, net finance expense,
income tax expense, depreciation and intangible assets amortisation
EFRAG European Financial Reporting Advisory Group
EGM Extraordinary General Meeting
EPS Earnings Per Share
ERP Enterprise Resource Planning
ESC Executive Sustainability Committee
ESG Environmental, Social, Governance
ESRS European Sustainability Reporting Standards
EUDR EU Deforestation Regulation
FRS Financial Reporting Standard
GDPR EU General Data Protection Regulation
GHG Greenhouse Gas
GMT Group Management Team
Grafton Grafton Group plc
Glossary of Terms
GRC Group Risk Committee
HVAC Heating, Ventilation and Air Conditioning
HVO Hydrogenated Vegetable Oil
IAS International Accounting Standards
IAASA Irish Auditing and Accounting Supervisory Authority
IBNR Incurred But Not Reported
IFRIC International Financial Reporting Interpretations Committee
IFRS International Financial Reporting Standards
IR Investor Relations
ISAs (Ireland) International Standards on Auditing (Ireland)
ISSC Information Security Steering Committee
KPI Key Performance Indicators
LDI Liability Driven Investment
LPG Liquefied Petroleum Gas
LTIFR Lost Time Injury Frequency Rate
LTIP Long Term Incentive Plan
LTISR Group Lost Time Injury Severity Rate
OCI Other Comprehensive Income
PPE Personal Protective Equipment
PP&E Property, Plant & Equipment
RCP Representative Concentration Pathway
Record Date The date on which holders of Grafton Units must be on the Company’s Register of
Members at the close of business to be eligible to receive a dividend payment
RMI Repair, Maintenance and Improvement
RPA Robotic Process Automation
ROCE Return on Capital Employed
SBTi Science Based Targets initiative
SHE Safety, Health and Environment
SME Small and Medium sized Enterprise
TCFD Task Force on Climate-related Financial Disclosures
VIU Value-In-Use
198
Grafton Group plc
Annual Report and Accounts 2025
02-42
Strategic Report
43-70
Sustainability Statement
71-114
Corporate Governance
115-190
Financial Statements
191-198
Supplementary Information
Consultancy, design and production
www.luminous.co.uk
Grafton Group plc
The Hive, Carmanhall Road
Sandyford Business Park,
Dublin 18, D18 Y2C9
+353 (0)1 216 0600
email@graftonplc.com
www.graftonplc.com