LONDON (ShareCast) - (Sharecast News) - Building materials supplier Grafton on Thursday reported a 29% fall in half-year profits amid a challenging market, but still lifted its dividend and announced a new £50m share buyback.
Pre-tax profits came in at £93.6m for the six months to June 30, compared with £132m a year earlier. The dividend was lifted 8.1% to 10p a share.

Adjusted operating profit was down by 30.5% to £105.1m, however revenue was up by 3.2% to £1.19bn.

Grafton said it expected full year adjusted operating profit of around £202.6m and a range of £194.6m - £209.4m, in line with its own compiled forecasts of analysts.

"Whilst market conditions are expected to remain challenging over the remainder of the year amid a backdrop of high inflation, high interest rates and cost of living pressures, our management teams lead our businesses with a through-the-cycle mindset and we are confident in the medium to long term strength of the group's brands and market positions to deliver superior returns," the company said.

Sales volumes within its distribution business moderated "significantly", while prices for steel and timber fell from record highs, cutting profits in Ireland and the UK.

Wage costs also rose "at the fastest rate in decades" due to inflation, and the group responded by reducing discretionary overheads.

Reporting by Frank Prenesti for Sharecast.com

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