Grafton shares tumble as chief executive Gavin Slark reveals exit plans after transformational tenure
- Gavin Slark joined the Dublin-based company from BSS Group 11 years ago
- Among the acquisitions he had overseen while in charge include Leyland SDM
- In recent years, Slark has helped lead Grafton through the Covid-19 pandemic
Boss: Gavin Slark (pictured) has been chief executive of Grafton for the last 11 years
Building materials supplier Grafton Group has announced that its boss will stand down at the end of the year after more than a decade in charge.
Gavin Slark joined the Dublin-based firm as chief executive in 2011 following a five-year spell holding the same position at plumbing and heating products distributor BSS Group, where he oversaw its £557.6million sale to Travis Perkins.
During his tenure at Grafton, he has steered the retailer through a dramatic transformation, making numerous acquisitions in the UK and overseas, such as stair contractor Stairbox and decorating retail brand Leyland SDM.
The company also transferred its primary stock market listing from the Irish capital to London, expanded into the Nordic region and sold off its traditional merchanting arm in Britain to Huws Gray.
In recent years, Slark has helped lead the firm through the Covid-19 pandemic, which initially caused some downturn in trade as a result of store closures across the British Isles before recovering very strongly as lockdown restrictions were loosened.
The Sunderland-born boss said the choice to leave was made ‘with a heavy heart,’ but added he was ‘confident that this is the right time for a new CEO to lead the business as Grafton embarks on its next phase of growth and development.
‘I remain very committed to the leadership of the business over the next six months and to working towards a smooth transition to my successor.’
Last year, Grafton posted its highest ever annual profits of £341.2million thanks to exceptional performances from its Northern Irish distribution business MacBlair, DIY brand Woodie’s and Selco Builders Maintenance.
Alongside this, overall revenue climbed by around a quarter due to prices of building materials in its British Isles distribution segments being driven higher by supply chain disruption.
Subsidiary: Gavin Slark has overseen a dramatic transformation during his tenure at the retailer, making numerous acquisitions, such as decorating retail brand Leyland SDM
This happened in tandem with low interest rates, strong mortgage demand, and a temporary stamp duty holiday introduced by the UK Government in July 2020 boosting demand for property renovation and new housebuilding.
Trade has continued to be positive since then, with total revenue between 1 January and 17 April up 15 per cent from the equivalent period last year. The retailer has also announced a share buyback programme worth up to £100million.
Chairman Michael Roney remarked that Slark ‘has made an outstanding contribution to Grafton and provided exceptional leadership over the past eleven years.
‘Under his stewardship, the group has further extended its geographic footprint and has been transformed into a portfolio of higher quality and higher returning businesses with excellent market positions and strong growth prospects.’
Markets reacted negatively to news of his departure, with Grafton Group shares tumbling 7.7 per cent to 721.6p on Monday, making it the second-biggest faller on the mid-cap FTSE 250 Index today.
AJ Bell investment director Russ Mould said: ‘The sign of a well-respected business leader is when the share price sinks on news of their departure. That’s happened with Grafton after Gavin Slark handed in his notice after 11 years at the top.
‘He’s helped to sharpen the company’s focus and expand geographically, breathing some life into the business, and that’s why investors are disappointed he is now leaving.’