Having dusted himself off as a 21-year-old from a first-round judo defeat at the 1992 Barcelona Olympics and gone on to take silver at the world championship a year later, Zurich native Eric Born knows how to mount a comeback.<\/p>\n
The Grafton Group<\/a> chief executive is hoping financial goals unveiled on Thursday at its capital markets day can spark one of its own at the merchanting and DIY retailing company, which has been on the back foot ever since he took charge in late 2022 \u2013 with group shares struggling amid weakness in its British, Dutch and Finnish businesses. <\/p>\n Born is targeting earnings per share (EPS) growth at a compound annual rate of more than 10 per cent out to 2030 at the group, parent of the Woodie\u2019s and Chadwicks chains in the Republic. <\/p>\n It\u2019s ambitious, especially when analysts see the group setting off by posting a 1 per cent dip in earnings this year after returning to growth last year (of 5.1 per cent) following a cumulative 25 per cent slump over the two previous years. <\/p>\n Indeed, the performance would have been worse had Grafton not been reducing its number of shares in issue over the period. It has spent about \u00a3430 million (\u20ac498 million) since 2022 buying back and cancelling more than a fifth of its stock. <\/p>\n The Swiss executive aims to end 2030 with the group delivering a return on capital employed \u2013 a measure of profitability against a company\u2019s debt and equity \u2013 of about 13 per cent, compared to under 11 per cent last year. The objective is about four percentage points above the company\u2019s estimated current cost of capital, suggesting it will be creating economic value for shareholders. <\/p>\n Investors have given the plan a cautious thumbs-up. The stock has advanced as much as 4.5 per cent in the past two days. But it has much to do to break out of the range it has been stuck in ever since the Brexit<\/a> referendum a decade ago this month \u2013 save for a brief breakout during the Covid pandemic when construction was deemed a critical industry and Woodie\u2019s was mobbed by lockdown DIYers scrambling to transform their gardens. Grafton shares remain almost 40 per cent below their 2021 highs. <\/p>\n The targets are predicated on the island of Ireland, which has replaced Britain as Grafton\u2019s main earning market in recent years, remaining what Born referred to during an investor presentation on Thursday as the \u201cpowerhouse\u201d of the group. <\/p>\n [\u00a0Woodies parent suffers 5% hit to British revenueOpens in new window<\/a>\u00a0]<\/p>\n His team sees Chadwicks \u2013 by far the largest builders\u2019 merchants \u2013 and Woodie\u2019s benefiting as house completions grow at 9 per cent annually over the next three years. Repairs, maintenance and improvement spend is also seen remaining strong as 78 per cent of the Republic\u2019s housing stock was built before 2000, according to Grafton. <\/p>\n Britain, which accounted for more than two-thirds of group sales in 2016, has been the group\u2019s biggest headache for the past decade. Grafton\u2019s average daily like-for-like sales in that market fell by 5 per cent in the first four months of this year alone. <\/p>\n But the British impact on the group has been diluted by restructuring over the years that culminated with the sale \u2013 under then chief executive Gavin Slark \u2013 of its traditional British merchanting business to rival Huws Gray for \u00a3520 million in 2022. <\/p>\n Grafton continues to own businesses such as Selco Builders Warehouse, which is geared towards small-jobbing builders, the decorating and DIY brand Leyland and staircase maker StairBox on the other side of the Irish Sea. <\/p>\n