Goodbody Stockbrokers has bought Grafton plc's flagship site on Dublin's Naas Road in a deal that will net the builders' providers and DIY specialist a €6 million-plus profit.
The deal is a sale and lease-back arrangement. Grafton intends to locate a flagship 6,000 sq ft Woodie's DIY warehouse outlet on the site, which formerly housed both Harry Ramsden's fast food restaurant and a Court's furniture store. The Dublin-listed company bought the land in 2002.
Goodbody bought the site for pension fund investors drawn from its own client base and from other self-administered schemes. The investment will be operated as a unit trust.
In a trading statement released yesterday, Grafton said the Woodie's store there should be completed during the third quarter of 2004. "It is anticipated that a book profit in excess of €6 million will be realised and accounted for in 2004 on successful completion of the development," the group said.
Grafton's statement said that it expected group earnings to be in line with expectations. In 2003, the group completed 10 acquisitions for a total of €200 million.
The largest of these was UK construction materials providers, Jackson's Building Centres, for €144 million. Two other significant purchases, Plumbline and Telfords, are in the same sector. The group said all three were trading in line with, or ahead of, initial expectations.
During the year, it increased the number of its locations from 280 to 330 in the UK and Ireland. This included 12 new builders' merchants sites, two Woodie's outlets and a mortar plant, along with the locations added through its acquisitions.
The statement made it clear that Grafton intends to continue growing through further acquisitions and by expanding its existing businesses.
"Further organic growth is planned for 2004 with the development of greenfield merchanting locations, the completion of the seventh dry mortar plant in the UK and new Woodie's DIY store openings in Ireland," the statement said. "The group also expects to benefit from its healthy pipeline of acquisitions."
In the wake of the statement yesterday, Davy Stockbrokers predicted that Grafton would post a pre-tax profits increase of 28 per cent to €98 million for the year, and earnings per share growth of 20 per cent to 43.6 cent. It upgraded its share price target to 650 cents from 550 cents.
