Grafton targets double-digit compound annual EPS growth to 2030
Grafton Group PLC on Thursday outlined financial ambitions to 2030, aiming to deliver ‘attractive earnings growth, strong cash generation and consistent shareholder returns.’
The Dublin-based building materials distributor is hosting a capital markets event in London on Thursday to provide ‘insights and updates’ on its strategy and growth ambitions over the medium term.
Grafton is targetting adjusted earnings per share compound annual growth of more than 10% over the period 2025 to 2030, cumulative free cash flow in excess of £850 million over the five year timeframe, and a return on capital employed of around 13%.
In 2025, Grafton reported adjusted EPS of 75.4p pence, free cash flow of £168.3 million, and a return on capital of 10.9%.
It seeks to retain an investment grade credit rating, supported by a lease-adjusted net debt to earnings before interest, tax, depreciation and amortisation ratio of 1.0 times to 2.0x. ?
Dividend cover is projected of 2.0x to 3.0x, supplemented by ‘incremental capital returns when appropriate’.
‘The medium-term targets we are announcing reflect our confidence in the strength of our strategy for organic and inorganic growth, the resilience of our business model and the opportunities ahead, underpinned by long-term structural growth drivers. We remain focused on delivering attractive earnings growth, strong cash generation and consistent shareholder returns, while maintaining a robust balance sheet,’ said Chief Executive Eric Born.
Shares in Grafton Group rose 2.9% to 861.18 pence each in London on Thursday but have fallen 15% over the past 12 months.
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