Grafton Group (GFTU) 2003年年度報告「LSE」.pdf

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1、Grafton Group plcANNUAL REPORT 2003Grafton Group plcANNUAL REPORT 2003ContentsGroup Profile 1Financial Highlights2Regions and Divisions 4Trading Locations5Chairmans Statement 6Group Finance Review 16Principal Brands 18Board of Directors 19Financial Review 1987 to 200320Report of the Directors 22Corp

2、orate Governance 25Directors Report on Remuneration27Statement of Directors Responsibilities31Independent Auditors Report 32Group Profit and Loss Account 34Other Statements 35Group Balance Sheet36Group Cash Flow Statement 37Company Balance Sheet 38Accounting Policies 39Notes to the Financial Stateme

3、nts 41Principal Operating SubsidiaryUndertakings 65Corporate Information andFinancial Calendar 65Grafton Group plc Annual Report 2003Annual Report 20031Grafton Group plcGrafton Group plc is an independent,profit growth oriented Company,operating in the UK and Ireland whose main activities are builde

4、rs andplumbers merchanting,DIY retailingand manufacturing.The Group aims to achieve aboveaverage returns for its shareholders.Graftons strategy is to build on strongpositions in businesses serving the UK and Irish construction sectors,todevelop in related markets,and togrow in businesses with which

5、it isfamiliar.In the UK,Graftons merchantingoperations are the fourth largest in the market.These comprise 137Plumbers Merchanting branchestrading under the Plumbase brand and 139 Builders Merchantingbranches trading principally underthe Buildbase and Jackson brands.In Northern Ireland,MacnaughtonBl

6、air is one of the leading buildersmerchants trading from 10 locations.EuroMix is the UK market leader indry mortar with 6 plants.In the Republic of Ireland,the Groupsleading Builders and PlumbersMerchanting business trades from 31branches nationally principally underthe Chadwicks brand.The Group is

7、the clear market leader in DIY retailing in the Republic of Irelandwith 16 Woodies stores nationally and,amongst other activities,hasmanufacturing plants in plastics andconcrete products,including EuroMixdry mortar.Since becoming an independent PublicLimited Company in 1987,Grafton hasincreased its

8、adjusted earnings pershare at an average annual rate of28%.Grafton Group plc shares arelisted on the Irish and London StockExchanges.Group Profile2Financial Highlights020380102120100806040200PROFIT BEFORE TAX million02031,1521,4961,6001,4001,2001,0008006004002000TURNOVER millionJacksons,the leading

9、East Midlands merchantingbusiness acquired in March 2003,trades from 18 branches including this one at Scunthorpe.Grafton Group plc Annual Report 2003320032002ChangeTurnover(million)1,4961,152+30%EBITDA(million)157120+31%Operating profit before goodwill(million)12392+34%Profit before taxation(millio

10、n)10280+27%EPS41.9c36.5c+15%Adjusted EPS(before goodwill amortisation&property profit)45.1c37.0c+22%Adjusted diluted EPS44.2c36.2c+22%Share redemption10.5c8.5c+24%Share redemption cover(times)4.34.4Interest cover(times)7.57.4Cash flow per share*60c54c+12%Net assets per share212c182c+16%Net debt to s

11、hareholders funds69%75%Depreciation charge(million)28.222.4Goodwill amortisation(million)9.44.2Acquisition expenditure(million)22089Capital expenditure(million)6968*Based on profit after tax plus depreciation and goodwill amortisation.020337.045.150403020100ADJUSTED EARNINGSPER SHARE cent02038.510.5

12、121086420SHAREREDEMPTIONS cent4Regions and Divisions“The market leading Merchanting,DIY and Mortar businesses in theUK and Ireland demonstrate thecore strengths and quality of theGroups brands.”TRADING LOCATIONSBuilders Merchants13923162Plumbers Merchants1378145Manufacturing Plants7310DIY-1616Total2

13、8350333UKIrelandTotal2%8%74%16%64%36%2%9%70%19%58%42%1,152m92.3m1,496m123.3mDIVISIONAL TURNOVER UK Operations Irish Merchanting Irish DIY Retailing Irish ManufacturingOPERATING PROFITBEFORE GOODWILL UK Ireland2003200220032002Grafton Group plc Annual Report 2003Trading Locations Builders Merchanting

14、Plumbers Merchanting Manufacturing DIY RetailingDUBLINAREALONDONAREALONDONAREABIRMINGHAMAREA56“The strategy of the Group,determined in theearly 1990s when profits were almost solelydependent on the Irish Merchanting market,has resulted in the creation of a businessenjoying consistently strong profit

15、able growthfrom an earnings base which is diversified both geographically and across theconstruction sector and related markets.”Grafton Group plc is pleased to report that 2003 hasbeen another year of excellent progress and thatrecord sales,profits and earnings have been achieved.Sales were up 30 p

16、er cent to 1.5 billion(2002:1.15 billion).Operating profit before goodwill increased by 33.6 per cent to 123.3 million(2002:92.3 million).Profit before tax increased by 27 per cent to 102.0 million(2002:80.2 million).Earnings per share before goodwill and propertyprofit increased by 21.8 per cent to

17、 45.07 cent(2002:36.99 cent).The Board has decided to redeem one redeemableshare per Grafton Unit for a cash consideration of6.0 cent payable on 19 March 2004,giving totalredemption payments for the year 2003 of 10.5 cent.This represents an increase of 23.8 per cent onredemptions of 8.48 cent paid f

18、or 2002.The Boardhas also decided to redeem the remaining sixredeemable shares per Grafton Unit for a total cashconsideration of 5 cent payable on 19 March 2004.As a result of the final redemption of all remainingredeemable shares in issue,the Board does notexpect that an interim dividend will be pa

19、id in 2004.The weighted average number of shares in issueincreased by 10.7 per cent to 206.66 million(2002:186.72 million)following the one for five rightsissue in March 2003.The comparative earnings andredemption per share amounts for 2002 have beenadjusted for the bonus element of the rights issue

20、.The results for 2003 are based on a strongperformance across the Groups businesses anddemonstrate the core strengths and quality of theGroups brands in the UK and Ireland.During 2003the Group comfortably undertook a range ofacquisition and development initiatives intended toChairmans StatementThe U

21、K builders merchanting division developed three greenfieldbranches during 2003 including this one at Crawley,Sussex.Grafton Group plc Annual Report 2003Chairmans Statement continuedstrengthen its market position and provide a strongerbase for the future profitable growth of its marketleading busines

22、ses.In 2003 the Group maintained the momentum ofconsistently strong profitable growth which has been a feature of its results since becoming anindependent public Company in 1987.The results for2003 also reflect the benefit of the Groups strategy ofdiversifying its earnings base both geographically a

23、ndacross the construction sector and related markets.2003 was a year of substantial progress for theGroups UK businesses with turnover exceeding theequivalent of 1 billion for the first time.UKturnover grew by 37 per cent to 1.1 billion(2002:808.5 million)and represented 74 per cent of Group turnove

24、r.UK operating profit beforegoodwill amortisation increased by 46 per cent to78.6 million(2002:53.7 million)contributing 64per cent of Group operating profit(2002:58 per cent).The UK operating profit margin increased asanticipated to 7.1 per cent(2002:6.6 per cent).In line with the Group strategy of

25、 activelyparticipating in the ongoing consolidation in the UKbuilders merchanting market,nine acquisitions werecompleted during 2003.The acquired businessesincluded Jackson Building Centres which was thelargest ever acquisition undertaken by the Group andPlumbline,Scotlands largest independent plumb

26、ersmerchanting chain trading from seventeen branches.78Seven bolt-on acquisitions trading from twelvebranches were also completed.The nine acquisitionstogether with the greenfield development of tenbranches added 57 trading locations to the GroupsUK merchanting network.EuroMix,the Groups UK dry mort

27、ar business continuedto benefit from its brand and market leadershipposition showing excellent growth in turnover andprofit.A sixth mortar plant at Harlow,Essex commencedtrading in May and EuroMixs seventh dry mortar plantis now under construction in Southampton.In the Republic of Ireland,the Group

28、experiencedstrong turnover and profit growth on the back ofa very buoyant market for both new residentialbuilding and repair,maintenance and improvementwork.Turnover increased 11.8 per cent to 384.5million(2002:343.8 million)and operating profitwas up 16.0 per cent to 44.8 million(2002:38.6million).

29、The operating profit margin increased to11.6 per cent(2002:11.2 per cent).Chadwicks Limited,the leading Irish merchantingCompany,completed a significant Irish acquisitionwith the purchase in October 2003 of Telfords,a threebranch builders merchant based in the Midlands.Further development of the Iri

30、sh merchanting andDIY businesses continued with the opening of twoChadwicks Plumb Centres in Galway city and NorthDublin and two Woodies DIY stores were opened inCavan and Carlow.The Groups operations continue to be strongly cashgenerative.Cash flow generated internally amountedto 129.8 million for

31、the year and these fundstogether with the 67.3 million proceeds of theRights issue part funded an expansive investmentprogramme which resulted in over 289.4 millionbeing invested in acquisitions and capitalChairmans Statement continuedPlumbase increased its branch network by 24 during 2003and traded

32、 from 137 branches at the year end.Grafton Group plc Annual Report 2003Chairmans Statement continuedprogrammes.Shareholders funds were 449.8million at the year end and the net debt to equityratio was 69%(2002:75%).Operations Review-United KingdomUK sales increased by 37 per cent to 1.1 billion(2002:

33、808.5 million)and operating profit increasedby 46 per cent to 78.6 million(2002:53.7 million).Consistent with margin improvements achieved in recent years,the UK operating profit marginincreased to 7.1 per cent(2002:6.6 per cent).The UKoperating profit margin has over the past five yearsincreased fr

34、om 3.0 per cent in 1998 to 7.1 per cent in2003 due to increased scale,buying benefits andoperational efficiencies.The results of the UK business benefited from a strong performance in like for like activities,incremental profit from an active acquisitionprogramme completed in 2002 and a strong initi

35、al ten month contribution from the Jacksonsacquisition.Like for like merchanting sales increasedby 5.4 per cent.The first phase of improved operational efficiencyand purchasing benefits have been realised and areincluded in the results for the year and are reflectedin the continuing increase in oper

36、ating margin beingachieved in the UK.Additional gains are anticipatedduring 2004.Sterling was on average 9 per cent weaker during2003 when compared to 2002 and accordingly theunderlying increase in profit in the UK businesses was in fact higher in local currency terms.The results for 2003 demonstrat

37、e the UKmanagements success in taking advantage ofopportunities presented in a consolidating marketand improving profitability in the enlarged business.UK Builders MerchantingThe UK builders merchanting business,tradingprincipally under the Buildbase and Jackson brands,had a year of very strong grow

38、th in sales andoperating profit.Buildbase,now regarded as a leading player in the UK merchanting market with strong brandrecognition and an integrated branch network,hadanother excellent year increasing sales and operatingprofit strongly.The improved performance resultedmainly from solid like for li

39、ke sales growth andsignificant progress in integrating a number of smallchain and single branch acquisitions completedduring 2002.The division benefited from good like for like salesgrowth in a positive RMI market and from very good progress on integration of the 31 buildersmerchanting branches acqu

40、ired during 2002.The 18 branch Jackson acquisition added critical mass to the division and continues to perform ahead of expectations.A further seven UK buildersmerchanting businesses acquired in 2003 traded from12 branches.In addition the division developed threegreenfield branches.The successful a

41、cquisition of Jacksons on 3 March2003 was in line with the Groups strategy ofexpanding its presence in the UK Merchanting marketand represented a unique opportunity for Grafton toexpand its builders merchanting presence into the9Plumbase expanded into Scotland with the acquisitionof Plumbline which

42、trades from 17 branches.10The EuroMix brand continued to penetrate the UK Mortar marketwith the opening of its sixth plant at Harlow,Essex.Grafton Group plc Annual Report 2003Chairmans Statement continuedEast Midlands region by acquiring the leading playerin that market and one of the UKs most respe

43、ctedmerchanting businesses.As previously announced,it is anticipated that theannual synergies and cost savings for the enlargedGroup will be achieved ahead of the estimates and inadvance of the time frame contained in the originalacquisition announcement.Jacksons improved profitability in 2003 and a

44、chievedgood like for like sales growth,cost savings andimproved purchasing benefits due to membership of the enlarged group.The planned furtherdevelopment of the Jacksons business includes the opening of a greenfield branch in Louth,andrefurbishment of the Swinton,South Yorkshire branch with a new p

45、urpose built facility.In Northern Ireland Macnaughton Blair,the leadingMerchant in the region,traded from ten branchesand had another excellent year increasing sales andoperating profit in a competitive market.Good likefor like sales growth,purchasing benefits and a fullyear contribution from the Pe

46、ter Woods acquisitionmade at the end of 2002 all contributed strongly tothe Companys improved performance.UK Plumbers MerchantingPlumbase the UK plumbers merchanting chainincreased sales and profit.Good sales growth,a fullyear contribution from acquisitions made at the endof 2002 and a contribution

47、in the last quarter fromthe Plumbline acquisition contributed to animproved level of profitability in Plumbase.Plumbase,one of the UKs largest plumbersmerchanting chains,increased its branch network by24 in 2003 and traded from 137 branches at the yearend.The Plumbase branch network,which wasconcent

48、rated in the South East,Midlands,East Anglia,West Country and North West,expanded into Scotlandwith the acquisition of Plumbline,the leadingindependent plumbers merchant trading from 17 branches.The three month contribution fromPlumbline was in line with expectations and thisacquisition offers oppor

49、tunity for further profitgrowth in 2004.The nine branch JKS and BJ White acquisitions madeat the end of 2002 were successfully integrated intothe Plumbase network in 2003 and made a goodcontribution to profit.Plumbase has successfully developed its branchnetwork through a combination of acquisitions

50、 andgreenfield development and this approach continuedin 2003 with the opening of seven greenfieldbranches.11EuroMix supplies a range of mortarsfor use in block and brick laying.12UK MortarEuroMix,the leading producer of dry mortar in the UK market,continued to consolidate its brandleadership positi

51、on in this important growthsegment of the residential and non-residentialbuilding market.The business grew volumes strongly and reported excellent growth in sales and operating profit.EuroMix supplies a range of dry mortars for use inblock and brick laying from six plants in the London,Birmingham,Ma

52、nchester and Glasgow areas.Thesixth plant at Harlow,Essex commenced productionin May 2003 and the plant at Glasgow increased itscapacity following a major investment programme.The EuroMix business has developed a strongreputation for the quality and range of its valueadded mortar and render products

53、 and also for theservice and technical support available to its national,regional and local contractor customer base.Duringthe year construction of the seventh EuroMix drymortar plant in Southampton commenced withproduction scheduled to start in Summer 2004.Operations Review-Republic of IrelandIrish

54、 turnover increased by 11.8 per cent to 384.5million(2002:343.8 million)and operating profitincreased by 16.0 per cent to 44.8 million(2002:38.6 million).The operating profit margin increasedto 11.6 per cent(2002:11.2 per cent).The Irish economy proved remarkably resilient during2003 despite a weak

55、global economic environment.While overall construction output is estimated to haveshown only modest growth,the residential sector hada very strong year with completions of 68,800 unitscompared to 57,700 units in 2002.Demand alsocontinued to be strong in the repair,maintenanceand improvement market.I

56、rish MerchantingThe Irish Merchanting division increased sales by 11.5per cent to 239.8 million(2002:215.0 million)including like for like growth of 8 per cent.Chadwicks builders and plumbers merchantingbusiness traded strongly,increasing sales andoperating profit due to volume growth and tightopera

57、tional management of the business.TheChairmans Statement continuedThe Groups Irish merchanting business was strengthened with the acquisitionof Telfords which trades from three branches in the Midlands.Grafton Group plc Annual Report 2003Chairmans Statement continuedresumption of growth in residenti

58、al constructionactivity in the second half of 2002 continued stronglyduring 2003.Chadwicks national branch network waswell positioned to benefit from record activity in newresidential building and a buoyant RMI market whereit has a significant presence.Chadwicks continued its successful programme of

59、branch relocations from provincial town centrepremises to high profile purpose built out of townsites.The relocation of the Wexford branch at the end of 2003 follows the successful relocation of theClonmel and Kilkenny branches during 2002.Eachnew site has increased capacity providing operationaleff

60、iciency and improved customer service.The acquisition,in October 2003 of Telfords,a longestablished three branch builders merchant based inPortlaoise,has significantly strengthened Chadwickspresence in the Midlands market.Telfords tradedahead of pre-acquisition expectations and made apositive contri

61、bution to profitability in its first threemonths with the Group.Chadwicks also increased its branch network with the greenfield development of two Plumb Centrebranches in Galway and North Dublin.Irish RetailingWoodies had another excellent year with significantturnover and profit growth.Turnover inc

62、reased by12.4 per cent to 110.3 million(2002:98.1 million).Woodies like for like sales growth was 4 per centdespite a weak Irish retail environment.Like for likeoperating profit improved as a result of volumegrowth,increased product margin due to sourcingbenefits,a continuous focus on range improvem

63、entand control of store overheads.New store openings in Cavan in August 2003 andCarlow in October 2003 increased Woodies storenetwork to 16.Both stores traded successfully.Woodies results also benefited from a full yearcontribution from the Tralee and Newbridge storeswhich opened during 2002.Woodies

64、 seventeenthstore at Clonmel opened earlier this month.Woodieshave announced plans to open further stores at NaasRoad,Dublin,Limerick,Kilkenny and Naas which willbring the network to 21 over the next two years.Irish ManufacturingManufacturing turnover increased by 12.1 per cent to34.4 million(2002:3

65、0.7 million)due substantiallyto volume growth by CPIs EuroMix silo mortarbusiness which supplies the Greater Dublin area.BoardThe Group announced in May 2003 that NormanKilroy would be retiring as Managing Director in April2004.Norman joined the Board as a Non-ExecutiveDirector in 1988 and was appoi

66、nted ManagingDirector in 1990.In this role Norman has made an outstanding contribution to the success of theGroup over the last 13 years.He will continue as a Non-Executive Director until later this year.TheNomination Committee of the Board has commenceda search for two additional Non-Executive Dire

67、ctorswhose appointment will reflect the scale andgeographical spread of the Groups interests.13Chadwicks relocated its Wexford branch to a purpose built out of town facility.14Grafton Group plc Annual Report 2003Chairmans Statement continuedManagement and StaffThe record results achieved in 2003 wer

68、e due in largemeasure to the skill,dedication and loyalty of themanagement and staff of the Groups businesses.The Board greatly appreciates the success which our management and staff bring to the Group andwarmly welcome all of those who have joined the Group during 2003.StrategyThe market leading Me

69、rchanting,DIY and Mortarbusinesses in the UK and Ireland demonstrate thecore strengths and quality of the Groups brands.The strategy of the Group,determined in the early1990s when profits were almost solely dependent onthe Irish Merchanting market,has resulted in thecreation of a business enjoying c

70、onsistently strongprofitable growth from an earnings base which isdiversified both geographically and across theconstruction sector and related markets.Group OutlookThe Groups strong cashflows,balance sheet andinterest cover leave it ideally placed to grow itsbusinesses organically and by acquisitio

71、n.Economic conditions in the UK are expected tocontinue to underpin demand in the repairs,maintenance and improvement sector.The UKmerchanting business will benefit from organicgrowth,ongoing integration and scale relatedpurchasing benefits being realised through thesignificant increase in the Group

72、s business.TheEuroMix mortar business is expected to continue on a significant growth path with completion ofthe seventh plant in Southampton.Although there has been a gradual improvement in the Irish economy in recent months and theeconomic outlook for 2004 is positive,we expect thata number of the

73、 factors which have influenced recordlevels of house completions in Ireland in recent yearsto moderate leading to a gradual slow down to longterm sustainable levels of new house building.Improved consumer sentiment and higher realdisposable incomes should provide a favourableenvironment for Chadwick

74、s to grow its RMI businessand for continued growth in the Woodies DIYbusiness.Woodies will also benefit in 2004 from afull years contribution from the two stores opened in the second half of 2003,the recent store openingin Clonmel and from further store openings planned.Trading has started well in 2

75、004 and the Group looksforward with confidence to another year of furtherprogress and improved earnings.On behalf of the BoardMichael ChadwickChairman15Woodies store opening programme continued during2003 with the addition of new stores in Cavan(left)and Carlow(right).ResultsThis was the Groups twel

76、fth year of uninterruptedprofit growth.Turnover increased by 30 per cent to 1.5 billionhaving exceeded 1 billion for the first time in2002.Operating profit before goodwillamortisation was up 34 per cent to 123.3 million(2002:92.3 million)and profit beforetaxation increased by 27 per cent to 102.0mil

77、lion(2002:80.2 million)Shareholders funds increased by 127.9 millionto 449.8 million(2002:322.0 million)including 67.3 million raised in the one for five rights issue completed in March 2003 to part fund the acquisition of Jacksons.The Groups net debt at 31 December 2003 was311.7 million(2002:240.6

78、million)and the net debt to equity ratio was 69 per cent(2002:75 per cent).Interest was covered 7.5 times(2002:7.4 times).The Groups averageworking capital intensity has remained consistent at 13.4 per cent(2002:13.6 per cent).Cash FlowCash flow from operating activities amounted to129.8 million(200

79、2:109.3 million).In additionthe Group generated 31.0 million(2002:14.7million)from asset disposals and 69.2 million(2002:0.9 million)from the issue of shares.The total cash flow from operating activities,asset disposals and shares issued amountedto 229.9 million(2002:124.8 million).AcquisitionsThe G

80、roup acquired ten businesses during 2003 at a cost of 220.1 million including Jacksonsacquired at a cost of 138.8 million,Plumbline in Scotland and Telfords in Ireland.The tenacquired businesses traded from 50 branches and turned over in excess of 350 million.The Group entered 2004 with a healthy pi

81、peline of potential acquisitions under activeconsideration.It is planned to continue theGroups successful formula of acquisition ledgrowth in the UK builders merchanting andplumbers merchanting market as opportunitiesarise which represent a good strategic fit and addvalue for our shareholders.Capita

82、l Expenditure and Asset DisposalsCapital expenditure during 2003 amounted to69.3 million(2002:68.0 million).This includedexpenditure of 36.3 million(2002:35.2 million)on projects of a development nature.Theseprojects included the greenfield development oftwelve merchanting outlets,two Woodies DIYsto

83、res and a dry mortar plant.The Group alsodeveloped and re-located a number of branches.Further capital was invested to support thecontinued successful development of the GroupsUK mortar business including the addition ofincreased capacity at the Glasgow plant.The Group realised a profit of 3.4 milli

84、on ondisposal of surplus land principally at Stanford-le-Hope,Essex,a site that originated as surplusproperty on the acquisition of British Dredging in1998.The Group has already announced that the sale of freehold property on the Naas Road,Dublin acquired during 2002 has been completed.A new flagshi

85、p Woodies DIY store will bedeveloped on the site and is scheduled forcompletion during the third quarter of 2004.It is anticipated that a profit in excess of 6million will be realised and accounted for in 2004on successful completion of this development.Interest Rate ManagementThe Group took advanta

86、ge of a prolonged periodof declining interest rates by leaving its debt,which is denominated in sterling,at floating rates.In the last quarter of 2002 one third of theGroups debt was fixed for five years.During thefirst quarter of 2003 the Group increased its fixedrate debt to almost half of the tot

87、al debt.Theaverage pre-tax fixed rate of interest secured is 4.6 per cent.Group Finance Review16Cash ResourcesThe Group funds its ongoing development mainlyfrom the strong cash flows generated by itsbusinesses and leveraging its balance sheetstrength through the use of committed bankfacilities.The G

88、roup also holds significant shortterm cash deposits on an ongoing basis.At 31 December 2003 cash and short term bankdeposits with a maturity profile of six months orless amounted to 139 million.The Group had gross debt of 451 million at 31 December 2003.More than half of gross debt is repayable afte

89、r more than three years from thebalance sheet date.The Groups debt is denominated in sterling and arose in the context of the Groups active UK acquisition and development programmeundertaken in recent years.The sterling debtproceeds provide a natural currency hedge against sterling assets acquired a

90、nd purchased.The Group had undrawn committed bank facilitiesof 68.2 million at 31 December 2003.Rights IssueThe Group raised 67.3 million net of expenses in a one for five rights issue completed in March2003 to part fund the acquisition of Jacksons andto enable the Group to continue to finance itsac

91、quisition and development programme.TheGroups spend on acquisitions and capitalexpenditure was 289 million during 2003.In the previous five years to the end of 2002 theGroup spent almost 500 million on acquisitionsand capital expenditure.This acquisition andinvestment programme was funded from inter

92、nalcash flow and the utilisation of the Groups debtcapacity except for a small share placing in 1999which raised 15.5 million.SummaryThe Groups healthy cash flows,strong balancesheet,high level of interest cover and healthydebt profile leave it well placed to fundacquisition led development projects

93、 andgreenfield initiatives which should provide a strong platform for continued growth inprofitability.Colm NuallinFinance DirectorGroup Finance Review continuedGrafton Group plc Annual Report 200317Builders MerchantingThe UK builders merchants division,tradingprincipally under the Buildbase brand,f

94、rom121 branches,has a strong presence in theSouth East,Midlands and North of England.Builders Merchanting Jacksons trade from 18 branches in the EastMidlands where it is the leading buildersmerchanting brand.Plumbers MerchantingThe UK plumbers merchanting division,trading under the Plumbase brand fr

95、om 137branches,has a strong presence in the SouthEast,Midlands,East Anglia,West Country and Scotland.Mortar ManufacturingEuroMix,the UKs largest manufacturer ofsilo based mortar,for use in a range ofconstruction projects,trades from 6 plantswhich provide an almost nationwidecoverage.EuroMix is the l

96、eading dry mortar brand in the UK and Ireland.Builders MerchantingIn the Republic of Ireland,the Groupsleading builders and plumbers merchantingbusiness trades from 31 branches nationallyprincipally under the Chadwicks brand.DIY RetailingWoodies DIY is the market leader in DIYretailing in the Republ

97、ic of Ireland,tradingfrom 16 stores nationally.Principal Brands18EuroMixEuroMixJACKSON BUILDING CENTRES LIMITEDBoard of DirectorsGrafton Group plc Annual Report 200319Michael Chadwick BA,MScEXECUTIVE CHAIRMANMichael Chadwick(52)joined theGroup in 1975 and was appointedto the Board in 1979.He wasappo

98、inted Executive Chairman in 1985.Norman D.Kilroy FCAMANAGING DIRECTORNorman D.Kilroy(64)wasappointed Managing Director in1990 having previously been a non-executive Director.He will retire asManaging Director on 30 April 2004.He is a Director of BanqueNationale de Paris in Ireland andPEI Surgical an

99、d Medical SuppliesLtd.He previously served as anAuthority Member of the IDA andas a member of the Irish TradeBoard.He is a past President and a Fellow of the Irish ManagementInstitute.Colm NuallinB Comm,FCAFINANCE DIRECTORColm Nuallin(50)joined theGroup as Financial Controller in1989 and was appoint

100、ed FinanceDirector in 1990.He previouslyheld senior financial positions in a number of public and semi-statecompanies.Fergus Malone BE,MBAEXECUTIVE DIRECTORFergus Malone(61)joined the Groups Plastics division in1972,having previously workedas an engineer in variousindustries.He was appointed to the

101、Board in 1978 and isresponsible for the Groupsmanufacturing businesses in the UK and Ireland.Anthony E.CollinsMA,B Comm,SolicitorDEPUTY CHAIRMAN-NON-EXECUTIVEAnthony Collins(64)became anon-executive Director in 1988and was appointed DeputyChairman in 1995.A formerPresident of the Law Society ofIrela

102、nd,he is Senior Partner ofEugene F.Collins,Solicitors,Chairman of the Advisory Board of the Automobile AssociationIreland,Deputy Chairman of TheLeinster Leader Ltd and a Directorof the Institute of Directors inIreland Ltd.Richard W.Jewson(UK)MANON-EXECUTIVE DIRECTORRichard Jewson(59)joined theBoard

103、in 1995.He is Chairman of Archant Ltd,Savills plc and aDirector of Temple Bar InvestmentTrust plc.Gillian Bowler(UK)NON-EXECUTIVE DIRECTORGillian Bowler(51)joined theBoard in 1995.She is Chairman ofBudget Travel Ltd and a Director ofIrish Life&Permanent plc and theVHI.She is also Chairman of FilteIr

104、eland and a Director of theInstitute of Directors in Ireland Ltd.She formerly served as Chairmanof The Irish Museum of Modern Art and as a member of theIndependent Radio and TelevisionCommission.Charles RinnMBA FCCAGROUP FINANCIAL CONTROLLER AND SECRETARYAuditR.W.Jewson(Chairman)G.BowlerA.E.CollinsR

105、emunerationG.Bowler(Chairman)A.E.CollinsR.W.JewsonNominationA.E.Collins(Chairman)G.Bowler M.ChadwickR.W.JewsonFinance M.Chadwick(Chairman)N.D.Kilroy C.NuallinC.RinnBOARD COMMITTEESProfit and Loss Accounts2003200220012000199919981997mmmmmmmTurnover1,496.01,152.4988.8830.5620.2427.6327.6Operating prof

106、it*115.889.777.364.646.333.125.6Exceptional profit3.43.72.3-Interest payable(net)(17.2)(13.2)(12.4)(11.8)(8.1)(4.9)(2.4)Profit before taxation102.080.267.252.838.228.223.2Taxation(15.3)(12.0)(8.7)(6.9)(4.6)(4.0)(3.5)Profit after taxation86.768.258.545.933.624.219.7Balance Sheets200320022001200019991

107、9981997mmmmmmmCapital employedGoodwill210.8100.462.551.731.79.8-Tangible assets346.8302.3251.5209.6175.9140.761.8Financial assets33.733.633.618.919.00.212.5Net current assets#198.5144.3129.5106.576.260.229.4Other liabilities(28.3)(18.0)(17.7)(16.1)(14.1)(12.4)(1.2)761.5562.6459.4370.6288.7198.5102.5

108、Financed as follows:Shareholders funds equity449.8322.0264.5216.5181.3139.878.6Net debt/(cash)311.7240.6194.9154.1107.458.723.9761.5562.6459.4370.6288.7198.5102.5Other InformationAcquisition&investment expenditure220.188.861.856.663.653.429.7Purchase of tangible fixed assets69.368.042.043.229.520.61

109、4.6Total capital&investment expenditure289.4156.8103.899.893.174.044.3Depreciation and goodwill amortisation37.626.621.916.512.67.25.4Financial Highlights2003200220012000199919981997Earnings per share before goodwill&exceptional profit(cent)45.137.032.125.919.514.211.6Share redemption/dividend per s

110、hare(cent)10.58.57.56.14.53.32.7Cashflow per share(cent)60.153.946.236.227.519.415.7Net assets per share(cent)211.5181.6150.2124.3104.984.948.8Interest cover(times)7.57.46.75.75.86.810.6Share redemption/dividend cover(times)4.34.44.34.34.34.34.3Net debt to shareholders funds69%75%74%71%59%42%30%*Inc

111、luding income from financial assets#Excluding net debtFinancial Review201996199519941993199219911990198919881987mmmmmmmmmm244.0195.7169.0133.2122.4119.9109.587.867.662.819.114.211.36.16.56.17.35.73.32.21.80.8-(1.3)(1.1)(1.2)(0.9)(1.6)(1.6)(0.7)(0.8)(0.5)(0.6)19.613.910.15.24.94.56.64.92.81.6(2.9)(2.

112、5)(2.1)(1.1)(1.2)(1.1)(2.1)(1.8)(0.7)(0.4)16.711.48.04.13.73.44.53.12.11.21996199519941993199219911990198919881987mmmmmmmmmm-48.543.240.135.933.033.730.621.219.418.10.1-1.23.41.01.91.3-0.421.421.518.217.918.418.618.716.111.19.3(1.1)(1.1)(1.1)(1.1)(1.0)(1.0)(1.0)(0.6)(0.5)(0.2)68.963.658.456.151.453.

113、249.636.730.027.670.657.749.945.742.240.738.736.025.123.9(1.7)5.98.510.49.212.510.90.74.93.768.963.658.456.151.453.249.636.730.027.68.01.45.82.7-1.27.80.11.6-7.67.75.75.22.45.97.83.52.71.315.69.111.57.92.47.115.63.64.31.34.23.63.02.62.12.11.41.00.91.119961995199419931992199119901989198819879.06.54.8

114、2.52.22.02.72.31.60.92.11.51.00.90.80.70.70.60.50.413.19.57.04.33.73.53.83.32.41.844.236.631.729.327.026.224.923.120.219.415.413.19.87.04.13.810.26.96.73.84.34.34.72.92.92.73.83.83.32.4-10%17%23%22%31%28%2%19%16%Grafton Group plc Annual Report 200321The Directors present their report to the sharehol

115、ders,together with the audited financial statements for theyear ended 31 December 2003.Group ResultsGroup turnover of 1,496 million was 30%higher than Group turnover of 1,152 million in 2002.Groupprofit before taxation amounted to 102.0 million compared with 80.2 million in the previous year,anincre

116、ase of 27%.Earnings per share amounted to 41.95c compared with 36.51c in the previous year,anincrease of 15%.Adjusted earnings per share(before goodwill amortisation and property profit)increased by22%to 45.07c compared to 36.99c in 2002.After deducting taxation of 15.3 million,retained profit of86.

117、7 million has been transferred to reserves.The cost of redeeming shares on 14 February 2003 and on 3October 2003 in the amounts of 9.3 million and 9.5 million respectively have been charged to the profitand loss reserve in 2003.The financial statements for the year ended 31 December 2003 are set out

118、 in detailon pages 34 to 64.Share RedemptionAn interim redemption of one redeemable share per Grafton Unit for a cash consideration of 4.5 cent pershare was paid on 10 October 2003 and the Board has decided to redeem one redeemable share per GraftonUnit for a cash consideration of 6.0 cent payable o

119、n 19 March 2004,giving total redemption payments forthe year of 10.5 cent.This represents an increase of 23.8%on equivalent redemptions of 8.48 cent paid for 2002.The Board has also decided to redeem the remaining six redeemable shares per Grafton Unit for a total cashconsideration of 5 cent payable

120、 on 19 March 2004.As a result of the final redemption of all remainingredeemable shares in issue,the Board does not expect that an interim dividend will be paid in 2004.Rights IssueOn 21 March 2003,the Group raised 67.3 million net of expenses by the issue of 35.28 million GraftonUnits though a righ

121、ts issue on the basis of one new Grafton Unit for every five Grafton Units held.Review of the BusinessShareholders are referred to the Chairmans Statement and Group Finance Review which contain a review ofoperations,the financial performance of the Group,recent events and the outlook for 2004.Board

122、of DirectorsMs.G.Bowler and Mr.R.W.Jewson retire from the board by rotation and,being eligible,offer themselves forre-election.The Directors seeking re-election do not have service contracts with the Company.Share CapitalFollowing the redemption of the seven remaining redeemable shares per Grafton U

123、nit on 19 March 2004 asnoted above,a Grafton Unit will comprise of one ordinary share of 5c in Grafton Group plc and one Cordinary share of Stg0.0001p in Grafton Group(UK)plc.Substantial HoldingsSo far as the Company is aware,in addition to the Chairman,Mr.Michael Chadwick,whose holding of19,097,022

124、 ordinary shares represents 8.98%of the shares in issue,the following held shares representingthree per cent or more of its ordinary share capital at 9 March 2004.Report of the Directors22NameHolding%Bank of Ireland Nominees Ltd NRI Account*32,756,66315.40Bank of Ireland Asset Management Ltd#23,199,

125、68310.91Bank of Ireland Nominees Ltd NRS Account19,856,8129.34Citibank Nominees(Ireland)Ltd Exempt Account11,419,5185.37Nortrust Nominees Limited Exempt Account9,191,8824.32*This nominee shareholder has informed the Company that this shareholding relates to 86 differentholdings.#This nominee shareho

126、lder has informed the Company that this shareholding relates to 151 differentholdings.The Directors and Secretarys interests in the share capital of the Company are set out in the DirectorsReport on Remuneration.Accounting RecordsThe Directors are responsible for ensuring that proper books and accou

127、nting records are kept by theCompany as required by Section 202 of the Companies Act,1990.The Directors believe that they havecomplied with this requirement by providing adequate resources to maintain proper books and accountingrecords throughout the Group including the appointment of personnel with

128、 appropriate qualifications,experience and expertise.The books and accounting records of the Company are maintained at HeronHouse,Corrig Road,Sandyford Industrial Estate,Dublin 18.International Accounting StandardsIn 2002 the European Council adopted a Regulation requiring all listed companies to pr

129、epare theirconsolidated accounts in accordance with International Financial Reporting Standards(IFRS)from 31 December 2005.The Group is currently reviewing the implications of reporting its results under IFRS.Companies(Auditing and Accountancy)Act 2003The Directors note that the Companies(Auditing a

130、nd Accountancy)Act 2003 has been issued and areassessing its implications for relevant Group Companies.Health and SafetyThe Safety,Health and Welfare at Work Act,1989 imposes certain obligations on employers and the relevantGroup Companies have taken appropriate action to ensure that health and safe

131、ty standards are compliedwith at all relevant locations and that all relevant Group Companies meet the requirements of the Act.SubsidiariesThe Groups principal operating subsidiary undertakings are set out on page 65.AuditorsIn accordance with Section 160(2)of the Companies Act,1963,the Auditors,KPM

132、G,Chartered Accountantsare willing to continue in office.Report of the Directors Grafton Group plc Annual Report 200323Annual General MeetingThe Annual General Meeting of the Company will be held at the Radisson SAS,St.Helens Hotel,StillorganRoad,Co.Dublin on 11 May 2004 at 12.30pm.The Letter to Sha

133、reholders from the Chairman and Notice of Annual General Meeting,included in a circularwhich accompanies this report,set out details of matters to be considered at the Annual General Meeting.On behalf of the BoardM.ChadwickC.NuallinDirectors9 March 2004Report of the Directors24The Board is committed

134、 to maintaining the highest standard of corporate governance and supports the principles set outin the Hampel Combined Code published in 1998.The Board is currently considering the provisions of the 2003 FRC Code.The following statement describes how the relevant principles set out in the 1998 Combi

135、ned Code are applied.Board of DirectorsThe Board comprises the Executive Chairman,three executive Directors and three non-executive Directors who areindependent of management and free from any current direct business or other relationship with the Group other than asshareholders.The three independen

136、t non-executive Directors are Anthony E.Collins,Gillian Bowler and Richard W.Jewsonand their biographies appear on page 19.The senior non-executive Director is Anthony E.Collins who is Deputy Chairmanof the Board.The Board believes that it is in the interest of shareholders that the Executive Chairm

137、an,Michael Chadwick,continues to hold the combined roles of Chairman and Chief Executive.The Board meets at least six times a year and there is contact between meetings as required in order to progress theGroups business.The Board takes the major decisions while allowing management sufficient scope

138、to run the businesseswithin a centralised reporting framework.All Directors have full and timely access to all relevant information in a formappropriate to enable them to discharge their duties.The Board has a formal schedule of matters specifically reserved toit for decision,which covers the key ar

139、eas of the Groups business including financial statements,budgets,acquisitions,major items of capital expenditure and the strategic development of the Group.All Directors have access to the advice and services of the Company Secretary who is responsible for ensuring that Boardprocedures are followed

140、 and that applicable rules and regulations are complied with.Board CommitteesThe Board is assisted by committees of Board members,which focus on specific aspects of its responsibilities.The Audit Committee,which comprises only the three non-executive Directors,meets at least twice each year and assi

141、ststhe Board in its responsibilities for financial reporting and internal control.The Committee reviews the interim andannual financial statements including the accounting principles,policies and practices adopted.The Committee discussthe results and scope of the audit with the Groups Auditors who h

142、ave direct access to the Committee Chairman at alltimes.The Committee also reviews the cost effectiveness,independence and objectivity of the external auditors and thescope and findings of the Groups internal audit function.The Nomination Committee comprises the three non-executive Directors and the

143、 Executive Chairman.The Committee isresponsible for proposing any new executive and non-executive appointments to the Board having regard to the balanceand structure of the Board.The Remuneration Committee,which consists solely of the three non-executive Directors,makes recommendations to theBoard,w

144、ithin agreed terms of reference,on the Groups framework of executive remuneration and on specificremuneration packages for each of the executive Directors.The Executive Chairman is fully consulted about remunerationproposals and outside advice is sought by the Remuneration Committee when necessary.T

145、he remuneration of the non-executive Directors is determined by the Board within limits set out in the Articles of Association.The Finance Committee comprises the Executive Chairman,the Managing Director,the Finance Director and the GroupFinancial Controller.The Committee deals with capital expendit

146、ure and treasury activities within prescribed limits andother management issues.Internal ControlThe Directors acknowledge that they have overall responsibility for the Groups system of internal control and forreviewing its effectiveness.The Directors recognise that such a system is designed to manag

147、e rather than eliminate the riskof failure to achieve business objectives and can only provide reasonable but not absolute assurance against material mis-statement or loss.Corporate GovernanceGrafton Group plc Annual Report 200325A process for identifying,evaluating and managing significant risks fa

148、ced by the Group,in accordance with theGuidance for Directors on the Combined Code,has been in place throughout the accounting period and up to thedate the financial statements were approved.Group management are responsible for implementing strategy and for the continued development of the Groupsbus

149、inesses within parameters set down by the Board.Similarly,day to day management of the Groups businessesis devolved to operational management within clearly defined authority limits and subject to very tight reportingof financial performance.Group and operating Company management are responsible for

150、 internal controlincluding the identification and evaluation of significant risks and for the implementation of appropriate internalcontrols to manage risk.Group management report to the Board on key risks and internal control issues includingthe way in which these are managed.The key features of th

151、e Groups system of internal control include:A clear focus on implementing the Groups strategy.Defined structures and authority limits for the operational and financial management of the Group and itsbusinesses.A comprehensive system of reporting on trading,operational issues and financial performanc

152、e incorporatingresults and cash flows,working capital management,return on capital employed and other relevant measuresof performance.Board approval of capital expenditure and acquisition proposals.The internal audit function focuses on areas of greatest risk to the Group,monitors compliance and con

153、siders theeffectiveness of internal control throughout the Group.The audit committee receives reports and meets withinternal and external auditors in order to satisfy itself on the adequacy of the Groups internal control system.TheChairman of the audit committee reports to the Board on significant m

154、atters considered by the committee.The Directors confirm that they have reviewed the effectiveness of internal control.In particular,they haveconsidered the significant risks affecting the business and the way in which these risks are managed,controlledand monitored.Going ConcernThe Directors,having

155、 made enquiries,believe that the Group has adequate resources to continue in operationalexistence for the foreseeable future and,on this basis,they continue to adopt the going concern basis in preparingthe financial statements.Communication with ShareholdersThe Company recognises the importance of c

156、ommunication with shareholders.Presentations are made to bothexisting and prospective institutional shareholders principally after the release of Interim and Annual results.TheAnnual General Meeting provides individual shareholders with an opportunity to raise questions with the Directors.The Compan

157、ys website presents information about the Group including Interim and Annualresults and other announcements.Statement of Compliance with the 1998 Combined CodeThe Directors confirm that,in applying the Principles of Good Governance,the Group has complied throughout theaccounting period with the Code

158、 of Best Practice as set out in the 1998 Combined Code.Corporate Governance26The Remuneration Committee,which comprises Gillian Bowler(Committee Chairman),Anthony E.Collinsand Richard W.Jewson,all of whom are non-executive Directors with no personal financial interest otherthan as shareholders in th

159、e matters to be decided by the Committee,had no potential conflicts of interestarising from cross-directorships and no day to day involvement in the running of the business.TheCommittee is responsible for the formulation of the Groups policy on remuneration in relation to allexecutive Directors.The

160、remuneration of the non-executive Directors is determined by the Board within the limits set out in theArticles of Association.Remuneration PolicyIn making its recommendations the Remuneration Committee has given consideration to the provisions ofthe Combined Code and the Irish Stock Exchanges requi

161、rements on Directors remuneration.Theremuneration policy adopted by the Group is to reward its executive Directors competitively having regardto comparable companies and the need to attract,retain and motivate executives of appropriate calibre.The Executive Chairman is fully consulted about remunera

162、tion proposals and outside advice is sought by theRemuneration Committee when necessary.The elements of the remuneration package for executiveDirectors are basic salary and benefits,performance related bonus,pension and the ability to participate inthe Grafton Group Share Option Scheme and the Graft

163、on Group Employee Share Participation Scheme.Service ContractsNo service contract exists for any Director.Basic Salary and BenefitsThe basic salaries of executive Directors are reviewed annually having regard to personal performance,Company performance and competitive market practice.Performance Rel

164、ated BonusThe level of performance bonus is determined for each individual executive Director.The level earned inany one year depends on the Remuneration Committees assessment of each individuals performance forthat year and also on an assessment of the overall performance of the Group.PensionsExecu

165、tive Directors participate in either a defined contribution scheme or a Group defined benefit scheme.Pensions are calculated on basic salary only in the case of the defined contribution scheme and in the caseof the defined benefit scheme on basic salary and bonus which is limited to a pre-determined

166、 maximumpercentage of basic salary.The calculation of pensions under the defined benefit scheme is consistent withthe calculation of pension benefits for certain senior executives in the Group except that pensions arecalculated on basic pay and full bonus for certain senior executives.Share Option S

167、chemeIt is the practice of the Group to grant share options periodically to key executives throughout the Group soas to provide an incentive to perform strongly over an extended period and to align their interests withthose of shareholders.Under the terms of the 1999 Grafton Group Share Option Schem

168、e,two types ofoptions are available subject to the conditions set out below:Directors Report on RemunerationGrafton Group plc Annual Report 200327(i)Basic options which cannot be exercised before the expiration of five years after the date upon whichthey were granted unless the Remuneration Committe

169、e agrees to a shorter period which shall not beless than three years and only then,if the Companys earnings per share has grown at not less than therate of growth in the Consumer Price Index plus 5 per cent compounded during that period.(ii)Second tier options cannot be exercised before the expirati

170、on of five years after the date upon whichthey were granted.Second tier options are exercisable if over a period of at least five years subsequentto the granting of the options,the growth in the Groups earnings per share would place it in the top25%of the companies listed on the Irish Stock Exchange

171、 Index over the same period;provided thatsecond tier options shall in any case be exercisable if the Companys earnings per share growth over therelevant period is greater,by not less than 10%on an annualised basis,than the increase in theConsumer Price Index over that period.The share option scheme

172、has a ten year life and the percentage of share capital which may be issued underthe scheme and individual grant limits comply with Institutional Guidelines.Share Participation SchemeThe Grafton Group Employee Share Participation Scheme is open to all Irish based employees who have atleast eighteen

173、months continuous service and Executive Directors are entitled to participate in the schemeon the same basis as all other employees.Directors Remuneration and Pension EntitlementsThe following table sets out the remuneration of the Directors in accordance with the Irish Stock ExchangeListing Rules.B

174、asicPerformanceOtherTotalTotalsalaryrelated bonusbenefits20032003200320032002000000000000000Remuneration for 2003Executive DirectorsM.Chadwick39827341712177N.D.Kilroy2219437352406C.Nuallin31821831567412J.F.Malone221 15028 3993001,1587351372,0301,295FeesTotalTotal200320032002000000000Non-executive Di

175、rectorsA.E.Collins474738G.Bowler383832R.W.Jewson49 4944134134114Sub-total2,1641,409Pension contribution onbehalf of Executive Directors806740Total2,9702,149Directors Report on Remuneration28Directors PensionsThe pension contribution shown on page 28 includes a contribution of 105,000(2002:100,000)to

176、 adefined contribution pension scheme on behalf of Mr.Norman Kilroy.Pension benefits earned by Directors who are members of a defined benefits pension scheme were asfollows:Increase in accruedAccumulated totalTransfer value of thepension during the yearaccrued pension increase in accumulated at year

177、 endaccrued benefitsat year end000000000M.Chadwick44302545C.Nuallin 25162233J.F.Malone318630Directors and Secretarys InterestsThe beneficial interests of the Directors in the share capital of the Company were as follows:Director31 December31 December20032002Grafton Units*Grafton UnitsM.Chadwick19,09

178、7,02217,902,010A.E.Collins390,000360,000N.D.Kilroy65,23051,610J.F.Malone519,014429,830C.Nuallin 656,298640,000G.Bowler132,000110,000R.W.Jewson42,20435,170Mr.M.Chadwick also holds a non-beneficial interest in 2,986,560(2002:2,806,560)Grafton Units in hiscapacity as a Trustee of a family trust.Mr.M.Ch

179、adwick and Mr.C.Nuallin have a non-beneficial interestin 1,323,521(2002:1,489,050)Grafton Units in their capacities as Trustees of the Grafton Group plc ShareParticipation Scheme.There have been no changes in the interests of the Directors between 31 December 2003 and the date ofthis report.Mr.C.Rin

180、n,Secretary,had an interest in 25,882 Grafton Units at 31 December 2003(2002:18,820).*At 31 December 2003 a Grafton Unit comprised of one ordinary share of 5 cent each,seven redeemable sharesof 0.01 cent each in Grafton Group plc and one C ordinary share of Stg0.0001p in Grafton Group(UK)plc.Directo

181、rs Report on RemunerationGrafton Group plc Annual Report 200329Directors and Secretarys Share OptionsThe interests of the Directors in options,granted in accordance with the Companys share option scheme,to subscribe for GraftonUnits in the Company are given below:Number of Options1 January Rights Is

182、sueExercised31 DecemberBasicSecondExerciseDates fromDates onMarket 2003Adjustment2003TierPricewhichwhichprice onexercisableoptionsdate ofexpireexerciseN.D.Kilroy68,2004,179-72,37972,379-0.65April 2000April 2006-C.Nuallin150,0009,192(85,000)74,19274,192-2.21June 2003June 20084.10*150,0009,192-159,192

183、90,20968,9831.81June 2004June 2009150,0009,192-159,19284,90274,2902.07April 2005April 2010150,0009,192-159,1925,306153,8862.83April 2006April 2011120,0007,354-127,35431,83995,5154.00April 2007April 2012-160,000#80,00080,0005.45Oct 2008Oct 2013720,00044,122(85,000)839,122 366,448472,674J.F.Malone80,0

184、004,902(84,902)-0.65April 2001April 20065.00*150,0009,192(159,192)-1.07April 2002April 20075.00*150,0009,192-159,192159,192-2.21June 2003June 2008150,0009,192-159,19290,20968,9831.81June 2004June 2009150,0009,192-159,19284,90274,2902.07April 2005April 2010680,00041,670(244,094)477,576334,303 143,273

185、*This represents the weighted average market price at the dates of exercise.#These options were granted on 20 October 2003The mid-market price of a Grafton Unit at 31 December 2003 was 5.47 and the price range during the year was between 2.68and 5.60.Mr.C.Rinn,Secretary,had options to subscribe for

186、371,852 Grafton Units in the Company at 31 December 2003(31 December2002:275,000).The adjustment in respect of the rights issue was 16,852 and options over 80,000 Grafton Units were granted on 20October 2003 at a price of 5.45 per unit.There has not been any contract or arrangement with the Company

187、or any subsidiary undertaking during the year in which aDirector of the Company was materially interested and which was significant in relation to the Companys business.The number of share options held at the time of the rights issue and the option prices were adjusted by a factor of 1.06128 inorder

188、 to adjust for the bonus element of the rights issue.Further information on the rights issue adjustment factor is contained inNote 10 to the Financial Statements.Directors Report on Remuneration30Irish Company law requires the Directors to prepare financial statements for each financial year which,i

189、naccordance with applicable Irish law and accounting standards,give a true and fair view of the state ofaffairs of the Company and of the Group as at the end of the financial year and of the profit or loss of theGroup for that year.In preparing those financial statements,the Directors are required t

190、o:select suitable accounting policies and then apply them consistently;make judgements and estimates that are reasonable and prudent;comply with applicable accounting standards,subject to any material departures disclosed andexplained in the financial statements;prepare the financial statements on t

191、he going concern basis unless it is inappropriate to presume thatthe Company and the Group will continue in business.The Directors are responsible for keeping proper books of account which disclose with reasonable accuracyat any time the financial position of the Company and of the Group and which e

192、nable them to ensure thatthe financial statements comply with the Companies Acts,1963 to 2001 and all Regulations to be construedas one with those Acts.They are also responsible for safeguarding the assets of the Company and of theGroup and hence for taking reasonable steps for the prevention and de

193、tection of fraud and otherirregularities.On behalf of the BoardM.ChadwickC.NuallinStatement of Directors ResponsibilitiesGrafton Group plc Annual Report 200331We have audited the financial statements on pages 34 to 64.This report is made solely to the Companys members,as a body,in accordance with Se

194、ction 193 of theCompanies Act,1990.Our audit work has been undertaken so that we might state to the Companysmembers those matters we are required to state to them in an auditors report and for no other purpose.Tothe fullest extent permitted by law,we do not accept or assume responsibility to anyone

195、other than theCompany and the Companys members as a body,for our audit work,for this report,or for the opinions wehave formed.Respective Responsibilities of Directors and Auditors in relation to the Annual ReportThe Directors are responsible for preparing the Annual Report including,as described on

196、page 31 thefinancial statements in accordance with applicable Irish law and accounting standards.Our responsibilities,as independent auditors,are established by statute,the Auditing Practices Board,the Listing Rules of theIrish Stock Exchange and by our professions ethical guidance.We report to you

197、our opinion as to whether the financial statements give a true and fair view and areproperly prepared in accordance with the Companies Acts.As also required by the Acts,we state whether wehave obtained all the information and explanations we require for our audit,whether the financialstatements agre

198、e with the books of account and report to you our opinion as to whetherthe Company has kept proper books of account;the Report of the Directors is consistent with the financial statements;at the balance sheet date a financial situation existed that may require the Company to hold anextraordinary gen

199、eral meeting,on the grounds that the net assets of the Company,as shown in thefinancial statements,are less than half of its share capital.We also report to you if,in our opinion,information specified by law or the Listing Rules regarding Directorsremuneration and transactions with the Company is no

200、t disclosed.We review whether the statement onpages 25 and 26 reflects the Companys compliance with the paragraphs of the Combined Code onCorporate Governance specified for our review by the Irish Stock Exchange,and we report if it does not.Weare not required to form an opinion on the effectiveness

201、of the Companys corporate governance proceduresor its internal controls.We read the other information contained in the Annual Report,including the corporate governancestatement,and consider whether it is consistent with the audited financial statements.We consider theimplications for our report if w

202、e become aware of any apparent misstatements or material inconsistencieswith the financial statements.Basis of OpinionWe conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board.Anaudit includes examination,on a test basis,of evidence relevant to the amounts a

203、nd disclosures in thefinancial statements.It also includes an assessment of the significant estimates and judgements made bythe Directors in the preparation of the financial statements,and of whether the accounting policies areappropriate to the Groups circumstances,consistently applied and adequate

204、ly disclosed.Independent Auditors ReportTo the Members of Grafton Group plc32We planned and performed our audit so as to obtain all the information and explanations which weconsidered necessary in order to provide us with sufficient evidence to give reasonable assurance that thefinancial statements

205、are free from material misstatement,whether caused by fraud or other irregularity orerror.In forming our opinion we also evaluated the overall adequacy of the presentation of information inthe financial statements.OpinionIn our opinion,the financial statements give a true and fair view of the state

206、of affairs of the Company andthe Group as at 31 December 2003 and of the profit and cash flows of the Group for the year then endedand have been properly prepared in accordance with the Companies Acts,1963 to 2001 and all Regulationsto be construed as one with those Acts.We have obtained all the inf

207、ormation and explanations we considered necessary for the purposes of ouraudit.In our opinion,proper books of account have been kept by the Company.The Companys balancesheet is in agreement with the books of account.In our opinion,the information given in the Report of theDirectors on pages 22 to 24

208、 is consistent with the financial statements.The net assets of the Company,as stated in the balance sheet on page 38,are more than half of the amountof its called up share capital and,in our opinion,on that basis there did not exist at 31 December 2003 afinancial situation which,under Section 40(1)o

209、f the Companies(Amendment)Act,1983,would require theconvening of an extraordinary general meeting of the Company.KPMGChartered AccountantsRegistered AuditorsDublin9 March 2004Independent Auditors ReportTo the Members of Grafton Group plcGrafton Group plc Annual Report 20033320032002Note000000Turnove

210、rContinuing operations1,280,4231,152,358Acquisitions215,595-Total turnover11,496,0181,152,358Operating profit before goodwill amortisation2Continuing operations107,31492,311Acquisitions16,009-123,32392,311Goodwill amortisation119,3584,195Operating profit2113,96588,116Profit on disposal of property 3

211、3,4373,711Trading profit2117,40291,827Income from financial assets 1,7881,611Interest payable(net)617,16913,219Profit on ordinary activities before taxation102,02180,219Tax on profit on ordinary activities815,32012,048Profit on ordinary activities after taxation86,70168,171Dividend on ordinary share

212、s-9Profit retained for the financial year2686,70168,162Earnings per share1041.95c36.51cAdjusted earnings per share1045.07c36.99cDiluted earnings per share1041.15c35.71cAdjusted diluted earnings per share1044.20c36.18cOn behalf of the BoardM.ChadwickC.NuallinDirectors9 March 2004Group Profit and Loss

213、 AccountFor the year ended 31 December 200334Statement of Total Recognised Gains and Losses20032002000000Profit for the financial year attributable to ordinary shareholders86,70168,171Currency translation adjustment on foreign currency net investments(13,095)(8,415)on foreign currency borrowings3,90

214、83,503Total recognised gains and losses for the year77,51463,259Historical Cost Profits and Losses20032002000000Profit on ordinary activities before taxation102,02180,219Realisation of revaluation reserve on sale of property-731Difference between historical cost depreciation charge and actualdepreci

215、ation charge for the year calculated on the revalued amount273273Historical cost profit on ordinary activities before taxation102,29481,223Historical cost profit retained for the financial year86,97469,166Movements on Group Profit and Loss Account20032002000000At 1 January236,934179,290Retained prof

216、it for the financial year 86,70168,162Redemption of redeemable shares(18,816)(6,610)Currency translation adjustment(9,187)(4,912)Re-issue of treasury shares486-Transfer from revaluation reserve2731,004At 31 December296,391236,934The profit and loss account reserve is analysed as follows:Parent Compa

217、ny49,75650,816Subsidiary undertakings246,635186,118296,391236,934Reconciliation of Movements in Group Shareholders FundsNote20032002000000Total recognised gains and losses for the year77,51463,259Dividends9-(9)Redemption of redeemable shares9(18,816)(6,610)Issue of ordinary share capital(net of issu

218、e expenses)22/2368,684866Re-issue of treasury shares22486-Net addition to shareholders funds127,86857,506Opening shareholders funds321,973264,467Closing shareholders funds equity449,841321,973Other StatementsFor the year ended 31 December 2003Grafton Group plc Annual Report 20033520032002Note000000F

219、ixed assetsGoodwill11210,840100,443Tangible assets12346,812302,336Financial assets1333,66533,579591,317436,358Current assetsStock14194,436159,345Debtors15272,797209,276Cash and short term bank deposits31138,956103,108606,189471,729Creditors(amounts falling due within one year)16354,798282,015Net cur

220、rent assets251,391189,714Total assets less current liabilities842,708626,072Creditors(amounts falling due after more than one year)18369,926288,083Provisions for liabilities and charges2122,94116,016392,867304,099Net Assets449,841321,973Capital and reservesShare capital2210,7819,023Share premium acc

221、ount23102,35235,465Capital redemption reserve245718Revaluation reserve2540,26040,533Profit and loss account26296,391236,934Shareholders funds equity449,841321,973On behalf of the BoardM.ChadwickC.NuallinDirectors9 March 2004Group Balance SheetAs at 31 December 20033620032002Note000000Net cash inflow

222、 from operating activities27129,793109,259Returns on investments and servicing of finance29(15,824)(9,424)Taxation(7,057)(5,213)106,91294,622Capital expenditure and financial investmentPurchase of tangible fixed assets(69,267)(68,007)Disposal of tangible fixed assets30,95114,656(38,316)(53,351)Acqui

223、sitionsAcquisition of subsidiary undertakings and businesses30(187,497)(76,379)Net(debt)/cash acquired with subsidiary undertakings 30(1,912)5,250Deferred acquisition consideration(1,342)(3,728)(190,751)(74,857)Redemption of shares/dividendsEquity dividends paid-(8,330)Redemption of redeemable share

224、s(18,816)(6,610)(18,816)(14,940)Cash outflow before use of liquid resources and financing(140,971)(48,526)Cash(outflow)/inflow from movement in liquid resources31(40,312)7,272FinancingIssue of ordinary share capital69,170866Increase in term debt78,88995,329Capital element of finance leases repaid(1,

225、080)(1,723)Redemption of loan notes payable(11,240)(18,627)Financing from lease and leaseback 22,501-158,24075,845(Decrease)/increase in cash in the year 31(23,043)34,591Reconciliation of Net Cash Flow to Movement in Net Debt20032002000000(Decrease)/increase in cash in the year(23,043)34,591Cash inf

226、low from increase in debt and lease financing(89,070)(74,979)Cash flow from management of liquid resources40,312(7,272)Change in net debt resulting from cash flows(71,801)(47,660)Loan notes issued on acquisition of subsidiary undertakings(24,567)(14,473)Finance leases acquired with subsidiary undert

227、akings(478)(744)Translation adjustment25,77517,138Movement in net debt in the year31(71,071)(45,739)Net debt at 1 January(240,644)(194,905)Net debt at 31 December 31/32(311,715)(240,644)Group Cash Flow StatementFor the year ended 31 December 2003Grafton Group plc Annual Report 20033720032002Note0000

228、00Fixed assetsTangible assets12400489Financial assets1318,40718,40718,80718,896Current assetsDebtors15277,244208,407Cash at bank and in hand1,505876278,749209,283Creditors(amounts falling due within one year)1697,15382,126Net current assets181,596127,157Total assets less current liabilities200,40314

229、6,053Creditors(amounts falling due after more than one year)1837,45750,731162,94695,322Capital and reservesShare capital2210,7819,023Share premium account23102,35235,465Capital redemption reserve245718Profit and loss account2649,75650,816Shareholders funds equity162,94695,322On behalf of the BoardM.

230、ChadwickC.NuallinDirectors9 March 2004Company Balance SheetAs at 31 December 200338A summary of the principal Group accounting policies are set out below which have been applied consistently throughout theyear and the preceding year.Basis of accountingThe financial statements are prepared under the

231、historical cost convention,as modified by the revaluation of certain tangiblefixed assets,and comply with the accounting standards applicable in the Republic of Ireland and the United Kingdom.Basis of consolidationThe consolidated financial statements comprise the financial statements of the parent

232、undertaking and its subsidiaryundertakings all of which are made up to 31 December 2003.The results of Companies acquired are dealt with in the profitand loss account from the date on which control passes.Rationalisation and integration costs relating to acquisitions arecharged to the profit and los

233、s account in the year in which they are incurred.GoodwillPurchased goodwill in respect of acquisitions before 1 January 1998 was charged directly to reserves in the year of acquisition.Goodwill arising on acquisitions since 1 January 1998,being the excess of the cost of acquisition over the fair val

234、ue of the netassets acquired,is included within fixed assets and amortised over its expected useful economic life of 20 years.Euro and Foreign currenciesThe results and cashflows of non-euro subsidiary undertakings are translated into euro using the average exchange rate andrelated balance sheets ha

235、ve been translated at the rates of exchange ruling at the balance sheet date.Exchange ratedifferences arising on translation of results of non-euro subsidiary undertakings and on the restatement of opening net assetsare dealt with through retained profit net of differences on related foreign currenc

236、y borrowings.Foreign currency transactions during the year have been converted at the rate of exchange ruling at the date of thetransaction.Assets and liabilities denominated in foreign currencies are translated into euro at the rates of exchange ruling atthe balance sheet date.The resulting profits

237、 or losses are dealt with in the profit and loss account.TurnoverTurnover represents the fair value of goods,excluding value added tax,delivered to or collected by third party customers in theyear.Goods are deemed to have been delivered to customers,when the customer has access to the significant be

238、nefitsinherent in the goods and exposure to the risks inherent in those benefits.Tangible fixed assets and depreciationTangible fixed assets are stated at historical cost less accumulated depreciation except for certain freehold and leaseholdproperties which are carried at revalued amounts less accu

239、mulated depreciation.The Group is availing of the transitionalprovisions of FRS 15,Tangible Fixed Assets,in continuing to carry such property assets at their previously revalued amount,which is not being updated for subsequent changes in value,but is adjusted for subsequent additions,disposals,depre

240、ciationand impairment as applicable.Land is not depreciated.Depreciation is calculated to write-off the cost or valuation of other tangible fixed assets over theirestimated useful lives in equal annual instalments as follows:Buildings50 to 100 yearsPlant and machinery 5 to 10 yearsMotor vehicles 5 y

241、earsPlant hire equipment4 to 8 yearsThe carrying value of tangible assets is reviewed for impairment if events or changed circumstances indicate that the carryingvalue in the financial statements may not be recoverable.Accounting PoliciesGrafton Group plc Annual Report 200339Financial fixed assetsTh

242、e investment in subsidiary undertakings in the Company balance sheet and other listed investments areshown at cost less provision for any impairment in value where applicable.Dividends from listed securitiesare accrued once they are declared.StocksStocks are valued at the lower of cost and net reali

243、sable value.In the case of finished goods and work inprogress,cost includes direct materials,direct labour and attributable overheads.Net realisable value isbased on estimated selling price less any further costs expected to be incurred.Deferred taxationDeferred tax is recognised in respect of all t

244、iming differences that have originated but not reversed at thebalance sheet date.Provision is made at the rates expected to apply when the timing differences reverse.Timing differences are differences between the Groups taxable profits and its results as stated in thefinancial statements that arise

245、from the inclusion of gains and losses in taxable profits in periods differentfrom those in which they are recognised in the financial statements.A net deferred tax asset is regarded as recoverable and therefore recognised only when,on the basis of allavailable evidence,it can be regarded as more li

246、kely than not that there will be suitable taxable profits fromwhich the future reversal of the underlying timing differences can be deducted.Liquid resourcesLiquid resources represent bank deposits of less than one year.Pension costsPension costs are recognised on a systematic basis so that the cost

247、s of providing retirement benefits toemployees are evenly matched,so far as is possible,to the service lives of the employees concerned.Anyexcess or deficiency of the actuarial value of assets over the actuarial value of liabilities of the pensionscheme is allocated over the average remaining servic

248、e lives of the relevant current employees.Leased assetsAssets held under leasing arrangements that transfer substantially all the risks and rewards of ownership tothe Group are capitalised.Amounts payable under such leases are shown,net of finance charges,as short ormedium term obligations,as approp

249、riate.The interest element of the lease obligations is charged to theprofit and loss account annually on the outstanding balance.Operating lease rentals are charged to the profit and loss account in the year to which they relate.Financial instrumentsHedging instruments,principally forward exchange c

250、ontracts and interest rate swaps,are matched with theunderlying hedged transaction.Gains and losses on forward foreign exchange contracts,which relateprimarily to purchases of stock for re-sale or for use in manufacturing processes,are included in the carryingamount of stock when purchased and are r

251、ecognised in the profit and loss account when the salestransactions occur.Interest rate swap agreements are used where appropriate to manage interest rate exposures.Amountspayable or receivable in respect of these derivatives are recognised as adjustments to interest payable overthe period of the co

252、ntracts.Accounting Policies401Turnover20032002The amount of turnover by class of activity is as follows:000000Irish merchanting and wholesaling239,829215,037DIY retailing110,30898,117Irish manufacturing and related activities34,39130,665Total turnover from Irish activities384,528343,819UK merchantin

253、g and other activities1,111,490808,5391,496,0181,152,3582Operating Profit and Trading Profit20032002000000Republic of Ireland44,76838,596Great Britain and Northern Ireland78,55553,715Operating profit before goodwill amortisation123,32392,311Goodwill amortised(9,358)(4,195)Operating profit113,96588,1

254、16Profit on disposal of property3,4373,711Trading profit 117,40291,827Income from financial assets1,7881,611119,19093,438In the opinion of the Directors,it would be seriously prejudicial to the interests of the Group to disclosefurther segmental information for its separate classes of business.The o

255、perating profit of 113,965,000 comprises of 102,047,000 relating to continuing operations and11,918,000 for 2003 acquisitions.The following have been charged/(credited)in arriving at operating profit:20032002000000Increase in stocks4,682(11,162)Purchases and consumables997,816782,097Staff costs(note

256、 5)201,344153,518Auditors remuneration699854Depreciation 28,21222,439Lease rentals and other hire charges16,01713,698Goodwill amortisation9,3584,195Profit on disposal of non-property fixed assets(1,615)(1,839)Other operating charges125,540100,4421,382,0531,064,242During 2003 acquisitions accounted f

257、or 203.7 million of the above costs and expenses.Notes to the Financial StatementsYear ended 31 December 2003Grafton Group plc Annual Report 2003413 Profit on Disposal of PropertyThe Group realised a profit of 3,437,000(2002:3,711,000)principally on the sale of property atStanford-le-Hope,Essex,whic

258、h had been originally acquired with the British Dredging plc acquisition in1998.The estimated taxation payable on the property profit amounts to 515,000(2002:416,000)4Directors Remuneration,Pension Entitlements and InterestsDirectors remuneration,pension entitlements and interests in shares and shar

259、e options are presentedin the Report of the Remuneration Committee on pages 27 to 30.5EmploymentThe average number of persons employed during the year by activity was as follows:20032002Merchanting and DIY retailing5,8744,364Manufacturing4053406,2794,70420032002000000The aggregate remuneration costs

260、 of employees were:Wages and salaries178,353137,600Social welfare15,70011,445Pensions7,2914,473201,344153,5186Interest Payable(net)20032002000000Interest payable and similar charges:Bank overdrafts and loans repayable within five years11,3418,626Bank loans repayable by instalments within five years2

261、,5931,433Bank loans repayable by instalments after five years2,8282,487Interest on finance leases7765Interest on loan notes3,3193,13120,15815,742Interest receivable(2,989)(2,523)17,16913,2197 Foreign CurrenciesThe results and cash flows of the Groups United Kingdom subsidiaries have been translated

262、into eurousing the average exchange rate.The related balance sheets of the Groups United Kingdom subsidiariesat 31 December 2003 and 31 December 2002 have been translated at the rate of exchange ruling at thebalance sheet date.The average euro/sterling rate of exchange for the year ended 31 December

263、 2003 was Stg69.20p(2002:Stg62.88p).The euro/sterling exchange rate at 31 December 2003 was Stg70.48p(2002:Stg65.05p).Notes to the Financial StatementsYear ended 31 December 2003428 Tax on Profit on Ordinary Activities(a)Analysis of charge for the year20032002000000Based on the profit on ordinary ac

264、tivities:Irish corporation tax1,3051,281UK corporation tax11,2198,99312,52410,274Deferred tax:-Irish1,230111-UK1,5661,66315,32012,048The charge for Irish corporation tax has been reduced by manufacturing relief in the amount of103,000(2002:231,000),timing differences on Group financing arrangements,

265、capitalallowances and other reliefs.(b)Group tax reconciliation20032002000000Profit on ordinary activities before taxation102,02180,219Profit on ordinary activities at standard corporation tax ratein Ireland of 12.5%(2002:16%)12,75312,835Effects of:Expenses not deductible for tax purposes512127Adjus

266、tment for earnings taxed at higher rates6,5654,909Adjustment for earnings taxed at lower ratesincluding manufacturing relief(4,596)(5,383)Profits on disposals of fixed assets86(440)Capital allowances for year in excess of depreciation(1,555)1,159Other timing differences(1,241)(2,933)Corporation tax

267、charge for the year12,52410,274(c)Factors that may affect future tax ratesNo provision has been made for deferred tax on gains recognised on revaluing property to its marketvalue or on the sale of the properties where taxable gains have been rolled over into replacementassets.Such tax would become p

268、ayable only if the property were sold without it being possible toclaim rollover relief.The total amount unprovided is 8.1 million(2002:8.1 million).No amounthas been recognised as there is no binding agreement to sell any property at the year end.Rollover relief claimed in respect of property dispo

269、sals in 2003 was nil(2002:2.16 million).Reliefpreviously claimed will be withdrawn if assets into which the gains were rolled over are soldwithout further re-investment,into qualifying assets,but this is not anticipated.No deferred tax is recognised on the unremitted earnings of overseas subsidiarie

270、s.No remittanceof profit is expected to arise in such a way that an incremental tax charge will arise.Manufacturing relief is due to expire by 31 December 2010.The standard rate of corporation taxreduced to 12.5%with effect from 1 January 2003.The tax effect of the implementation of FRS 17 on pensio

271、ns is included in note 37.Notes to the Financial StatementsYear ended 31 December 2003Grafton Group plc Annual Report 2003439Redemption of Redeemable Shares20032002000000Redemption of one redeemable share for 4.5c(2002:3.75c)9,5566,610Redemption of one redeemable share for 6.0c(2002:5.25c)12,7599,26

272、0Total redemptions22,31515,870The Board has decided to redeem one redeemable share for a cash consideration of 6.0 cent payableon 19 March 2004.Accordingly,no final dividend will be declared in respect of the year ended 31 December 2003.This follows the redemption of one redeemable share per Grafton

273、 Unit for a cashconsideration of 4.5 cent per share on 3 October 2003 to give total redemption payments for the year of 10.5 cent.This represents an increase of 23.8 per cent on redemptions of 8.48 cent(adjusted for thebonus element of the rights issue)paid for 2002.The Board has also decided to red

274、eem the remaining six redeemable shares per Grafton Unit for a totalcash consideration of 5 cent payable on 19 March 2004.As a result of the final redemption of allremaining redeemable shares in issue,the Board does not expect that an interim dividend will be paidin 2004.The redemptions on 19 March

275、2004 are chargeable to reserves in 2004.10Earnings per ShareThe computation of basic and diluted earnings per share is set out below:20032002Profit on ordinary activities after taxation(000)86,70168,171Weighted average Grafton Units outstanding during the year206,659,076186,717,006Earnings per share

276、41.95c36.51cNumber of dilutive Grafton Units under option9,588,72310,290,794Number of Grafton Units that would have been issued at fair value(5,543,126)(6,099,116)Dilutive potential Grafton Units4,045,5974,191,678Number of Grafton Units for calculating diluted earningsper share and adjusted diluted

277、earnings per share210,704,673190,908,684Diluted earnings per share41.15c35.71cNotes to the Financial StatementsYear ended 31 December 20034410Earnings per Share(continued)Earnings per share of 41.95c(2002:36.51c)have been calculated on profits after taxation of86,701,000(2002:68,171,000)and the weig

278、hted average number of Grafton Units of 206,659,076(2002:186,717,006 which has been adjusted for the bonus element of the rights issue).The calculation of adjusted earnings per share of 45.07c(2002:36.99c)is arrived at after eliminatinggoodwill of 9,358,000(2002:4,195,000)and property profit after t

279、axation of 2,922,000(2002:3,295,000)from profit after taxation of 86,701,000(2002:68,171,000).Adjusted earnings per sharewas increased by 4.53c(2002:2.24c)due to the elimination of goodwill from earnings and reduced by1.41c(2002:1.76c)due to the elimination of property profit from earnings.Diluted e

280、arnings per share of 41.15c(2002:35.71c)have been calculated on profits after taxation of86,701,000(2002:68,171,000)and the weighted average number of Grafton Units in issue duringthe year adjusted for the dilutive effect of outstanding share options.The calculation of adjusted diluted earnings per

281、share of 44.20c(2002:36.18c)uses the same earningsfigure as for adjusted earnings per share and the weighted average number of Grafton Units as adjustedto reflect the dilutive effect of outstanding share options.Earnings per Share Adjusted for Bonus Element of Rights Issue(Previous Year)20022002Actu

282、alAdjusted forRights IssueEarnings per share(EPS)38.75c36.51cAdjusted EPS39.26c36.99cDiluted EPS37.90c35.71cAdjusted diluted EPS38.40c36.18cThe Group raised 67.3 million,net of expenses,by the issue of 35,276,228 New Grafton Units at aprice of 2.00 per New Grafton Unit by way of a 1 for 5 Rights Iss

283、ue.The actual cum rights price on 28 February 2003,the last day of quotation cum rights,was 3.06 andthe theoretical ex-rights price for a Grafton Unit was therefore 2.8833 per Grafton Unit.The 2002adjusted earnings per share figures shown above are calculated by applying the factor 1.06128(3.06/2.88

284、33)to the weighted average number of Grafton Units for 2002 in order to adjust for the bonuselement of the Rights Issue.The 1987 to 2001 inclusive earnings per share and dividend per share amounts,set out in the FinancialReview on pages 20 and 21,have also been adjusted for the bonus element of the

285、rights issue.Notes to the Financial StatementsYear ended 31 December 2003Grafton Group plc Annual Report 20034511Goodwill20032002000000CostAt 1 January111,03469,489Acquired during the year(note 30)129,42246,841Translation adjustment(10,593)(5,296)At 31 December229,863111,034AmortisationAt 1 January1

286、0,5916,948Amortised during the year9,3584,195Translation adjustment(926)(552)At 31 December19,02310,591Net book amount210,840100,44312Tangible Fixed AssetsPlantFreeholdLeaseholdMachineryLand and Land andand MotorBuildingsBuildingsVehiclesTotal000000000000GroupCost or ValuationAt 1 January 2003187,61

287、234,125151,212372,949Additions19,4985,69744,61269,807Acquisitions28,8904,15311,07644,119Disposals(17,672)(386)(16,033)(34,091)Exchange adjustment(9,400)(1,893)(10,191)(21,484)At 31 December 2003208,92841,696180,676431,300ComprisingCost162,27430,304180,144372,722Valuation46,65411,39253258,578208,9284

288、1,696180,676431,300DepreciationAt 1 January 20035,3284,07761,20870,613Charge for year2,2511,60424,35728,212Disposals-(272)(7,920)(8,192)Exchange adjustment(465)(449)(5,231)(6,145)At 31 December 20037,1144,96072,41484,488Net book amountAt 31 December 2003201,81436,736108,262346,812At 31 December 2002

289、182,28430,04890,004302,336Notes to the Financial StatementsYear ended 31 December 20034612Tangible Fixed Assets(continued)The Groups freehold and long leasehold properties located in the Republic of Ireland wereprofessionally valued as at December 1998 by professional valuers in accordance with the

290、Appraisal andValuation Manual of the Society of Chartered Surveyors.The valuations,which were made on an openmarket for existing use basis,amounted to 58.0 million.The remaining properties,which are locatedin the United Kingdom,are included at cost less depreciation.Freehold land and buildings and l

291、easehold land and buildings would have been stated as follows underthe historical cost convention:20032002000000Cost209,250180,364Accumulated Depreciation(12,269)(9,873)Net book amount196,981170,491TangibleFixed Assets000CompanyCostAt 1 January 2003959Additions56Disposals(23)At 31 December 2003992De

292、preciationAt 1 January 2003470Charge for year137Disposals(15)At 31 December 2003592Net book amountAt 31 December 2003400At 31 December 2002489The tangible fixed assets of the Group include leased assets as follows:Plant,Machinery&Motor Vehicles20032002000000Cost34,07110,569Accumulated depreciation(1

293、0,697)(6,532)Net book amount23,3744,037Depreciation charge for year 1,3331,290Notes to the Financial StatementsYear ended 31 December 2003Grafton Group plc Annual Report 20034713Financial Fixed AssetsGroupCompanyShares inOtherOtherSubsidiaryInvestmentsInvestmentsUndertakingsTotal000000000000At 1 Jan

294、uary 200333,5791318,39418,407Translation adjustment(13)-Arising on acquisition99-At 31 December 200333,6651318,39418,407Other Group investments include a holding of 11,760,291 ordinary shares or 23.83 per cent in theordinary share capital of Heiton Group plc,an Irish registered Company whose shares

295、are listed on theIrish and London Stock Exchanges.The original cost of this investment was 33.5 million and themarket value at 31 December 2003 was 48.2 million.The main activities of Heitons are buildersmerchanting,steel stockholding,homecare/DIY and plant and tool hire.Heitons profit before tax in

296、 thefinancial year ended 30 April 2003 was 9.1 million and its capital and reserves at that date were137.6 million.The shares are held for investment purposes and the investment has not been treatedas an associate,as defined in FRS 9,as the Company does not actively exercise significant influence ov

297、erHeiton Group plc.Related dividend income is only accrued once declared.The registered office ofHeiton Group plc is Ashfield,Naas Road,Clondalkin,Dublin 22.14StocksGroup20032002000000Raw materials1,7711,385Finished goods6,1603,479Goods purchased for resale186,505154,481194,436159,345The estimated r

298、eplacement cost of stocks is not considered to be materially different from the amountsstated above.15DebtorsGroupCompany2003200220032002000000000000Amounts falling due within one year:Trade debtors215,754169,286-Amounts owed by subsidiaryundertakings-266,070205,503Prepayments and accrued income51,7

299、2839,9907,0122,904Pension prepayment5,315-4,162-272,797209,276277,244208,407Notes to the Financial StatementsYear ended 31 December 20034816CreditorsGroupCompany2003200220032002000000000000Amounts falling due within one year:Trade creditors175,182150,371-Accruals and deferred income60,41543,0628,927

300、4,338Social welfare1,5121,190-Income tax deducted under PAYE2,8851,987-Value added tax12,42812,075-252,422208,6858,9274,338Bank loans and overdrafts45,16941,17144Loan notes(note 17)36,35915,5519,777459Obligations under finance leases(note 20)4,590998-Deferred acquisition consideration2,9451,777-Amou

301、nts owed to subsidiary undertakings-78,43077,313Corporation tax13,31313,8331512354,798282,01597,15382,12617Loan NotesIn the case of loan notes issued to vendors of businesses acquired,the notes are redeemable at theoption of the note holders on specified dates between February 2004 and May 2008.The

302、interest ratespayable on these notes are set at fixed rates or on terms which relate directly to London Inter-BankOffer Rate(LIBOR).The remaining loan notes were issued in the US Private Placement Market(see note 18).18CreditorsGroupCompany2003200220032002000000000000Amounts falling due after more t

303、han one year:Bank loans308,560235,008-Unsecured senior notes due 200837,45750,73137,45750,731Obligations under finance leases(note 20)18,536293-Deferred acquisition consideration5,3732,051-369,926288,08337,45750,731During 1998 the Group completed a US$55 million debt financing in the US Private Plac

304、ement Marketand issued unsecured senior loan notes maturing in 2008.The US dollar proceeds were swapped intosterling and the interest rate payable on the loan notes is currently variable by reference to six monthLIBOR rates.The deferred acquisition consideration is expected to be payable between Mar

305、ch 2005 and March 2006.Notes to the Financial StatementsYear ended 31 December 2003Grafton Group plc Annual Report 20034919Loans20032002Group000000Bank loans,loan notes and senior unsecured notes 2008 are repayable as follows:Between one and two years48,38285,340Between two and five years252,134128,

306、809After five years45,50171,590346,017285,739Bank loans repayable within one year12,77027,671Loan notes repayable within one year36,35915,551395,146328,961Loans fully repayable between one and five yearsNot by instalment224,750136,670By instalment75,76677,479300,516214,149Loans fully repayable in mo

307、re than five yearsBy instalment45,50171,590346,017285,73920Obligations under Finance Leases20032002Group000000Finance lease obligations,included in creditors,net of interestto which the Group is committed are due as follows:Within one year4,590998Between one and five years18,53629323,1261,29121Provi

308、sion for Liabilities and Charges20032002Group000000Deferred taxationAt 1 January16,01616,891Profit and loss account2,7961,774Acquired with subsidiaries(5,129)(2,308)Transfer from corporation tax9,500-Exchange adjustment(242)(341)At 31 December22,94116,016Deferred taxation arises as follows:Capital a

309、llowances 4,8462,970Other timing differences18,09513,04622,94116,016No provision has been made for deferred tax in respect of the surplus arising on property revaluations,as there is no current intention to dispose of the properties concerned,and on the unremitted earningsof overseas subsidiaries as

310、 there is no current intention to repatriate these earnings.The amountprovided above reflects all other timing differences.Notes to the Financial StatementsYear ended 31 December 20035022Share Capital20032002000000Authorised:Equity shares300 million ordinary shares of 5c each15,00010,000Redeemable s

311、hares2.8 billion redeemable shares of 0.01c each28020015,28010,20020032002IssueNumberNominalNominalPriceOf SharesValueValue000000Issued and fully paid:Ordinary sharesAt 1 January177,281,1408,8648,804Rights issue34,376,2281,719-Executive share option schemeDate options grantedMay 19920.17-3April 1993

312、0.1931,83822September 19940.4584,90249October 19950.5253,064315April 19960.65127,353610April 19971.07270,7261321June 19982.21397,16220-September 19981.6521,2261-986,2714960At 31 December212,643,63910,6328,864Redeemable sharesAt 1 January 1,595,530,260159-Redeemable shares issued underrights issue an

313、d share options282,613,45129177Redemption of redeemable shares transferredto the capital redemption reserve(389,638,238)(39)(18)At 31 December1,488,505,473149159Total share capital10,7819,023Grafton UnitsIn May 1999,C ordinary shares of Stg0.001p each were issued by Grafton Group(UK)plc in order to

314、giveshareholders the option of receiving dividends on either ordinary shares in Grafton Group plc or ontheir C ordinary shares in Grafton Group(UK)plc.Following the ten for one share split in 2001,theissue of redeemable shares in July 2002 and the redemption of redeemable shares in September 2002,Ma

315、rch 2003 and October 2003,a Grafton Unit at 31 December 2003 comprises of one ordinary share of5c in Grafton Group plc and one C ordinary share of Stg0.0001p in Grafton Group(UK)plc and sevenredeemable shares of 0.01c each in Grafton Group plc.Notes to the Financial StatementsYear ended 31 December

316、2003Grafton Group plc Annual Report 20035122 Share Capital(continued)Redeemable SharesThe Board has decided to redeem one redeemable share per Grafton Unit for a cash consideration of 6.0 cent payable on 19 March 2004.The Board has also decided to redeem the remaining sixredeemable shares per Grafto

317、n Unit for a total cash consideration of 5.0 cent payable on 19 March 2004.Share Option SchemesThe number of Grafton Units issued during the year under the Companys Share Option Schemes was986,271 and the total consideration received amounted to 1,359,000.Costs relating to the issues were11,000.In a

318、ccordance with the terms of the 1999 Grafton Group Share Option Scheme and theGrafton Group(UK)plc Approved Share Option Scheme,options over 1,852,700 Grafton Units weregranted during the year.Total options outstanding at 31 December 2003 amounted to 9,984,619Grafton Units.Options granted are exerci

319、sable,in accordance with the terms of the schemes,at pricesranging between 0.45 and 5.45 during the period to 2013.UK SAYE SchemeOptions over 1,456,794 Grafton Units were outstanding at 31 December 2003,pursuant to a three yearsaving contract under Grafton Group(UK)plc Savings Related Share Option S

320、cheme at a price of 2.26,which represented a discount of 20 per cent to the market price on the date of the grant.These optionsare normally excercisable within a period of six months after the third anniversary of the savingscontract.Treasury SharesThe Company re-issued 900,000 treasury shares as pa

321、rt of the rights issue in March 2003.These shareswhich were bought back in 1995 at a cost of 486,000 were re-issued for 1,800,000.The original costsof 486,000,which was charged to the profit and loss account in 1995,has been released back to theprofit and loss account and the balance of 1,314,000 ha

322、s been credited to share premium.23Share Premium Account20032002000000Group and CompanyAt 1 January35,46534,836Premium on shares issued under rights issue64,275-Premium on shares issued under share option scheme1,298806Premium on re-issue of treasury shares1,314-Bonus issue of redeemable shares-(177

323、)At 31 December102,35235,465The premium on shares issued under rights issue is net of expenses of 2.73 million.24Capital Redemption Reserve20032002000000Group and CompanyAt 1 January18-Redemption of redeemable shares3918At 31 December5718Notes to the Financial StatementsYear ended 31 December 200352

324、25Revaluation Reserve20032002000000GroupAt 1 January40,53341,537Transfer to profit&loss account(273)(1,004)At 31 December 40,26040,53326Profit and Loss AccountThe Group revenue reserves of 296,391,000(2002:236,934,000)are after charging goodwill of12,982,000(2002:12,982,000)directly to reserves betw

325、een 1 January 1988 and 31 December 1997.In accordance with Section 3(2)of the Companies(Amendment)Act,1986,the profit and loss account ofthe parent undertaking has not been presented separately in these financial statements.There was aprofit after tax of 17.3 million(2002:15.3 million)attributable t

326、o the parent undertaking for thefinancial year.27Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities20032002000000Operating profit113,96588,116Depreciation28,21222,439Goodwill amortisation9,3584,195Profit on disposal of plant,machinery and motor vehicles(1,615)(1,839)Incr

327、ease in working capital(note 28)(20,127)(3,652)Net cash inflow from operating activities129,793109,25928Movement in Working CapitalStocksDebtorsCreditorsTotal000000000000At 1 January 2003159,345209,276(208,685)159,936Translation adjustment(9,362)(17,228)15,130(11,460)Interest accruals and other move

328、ments-99(195)(96)Acquisitions39,77157,880(51,347)46,304Movement in 20034,68222,770(7,325)20,127At 31 December 2003194,436272,797(252,422)214,811Movement in 200217,44713,421(27,216)3,652Notes to the Financial StatementsYear ended 31 December 2003Grafton Group plc Annual Report 20035329Returns on Inve

329、stments and Servicing of Finance20032002000000Interest received2,9842,549Interest paid(20,425)(13,472)Interest element of finance lease payments(77)(65)Net cash outflow from servicing of finance(17,518)(10,988)Dividend income received 1,6941,564(15,824)(9,424)30Acquisition of Subsidiary Undertakings

330、During the year the Group made nine UK acquisitions and one Irish acquisition at a total cost of220.1 million.The only substantial acquisition under FRS 6 was Jackson Building Centres Limited,a regional builders merchant chain trading from eighteen branches in the East Midlands.Four othermerchanting

331、 chains acquired in the UK were Plumbline,a Scottish based plumbers merchant tradingfrom 17 branches,Booles,a three branch merchanting business based in Stockport,Cheshire;Rowlinsons,a three branch builders merchant based in Cheshire and Gloster Building Supplies,a twobranch builders merchant based

332、in Gloucester.The Group also acquired four single branch buildersmerchanting businesses located at Falkirk,Scotland;Bilston,West Midlands;Wantage,Oxfordshire andHaverhill,Suffolk.In Ireland,the Group acquired Telfords,a three branch builders merchant based in the Midlands.20032002000000The fair valu

333、es of assets and liabilities acquired are set out below:Tangible fixed assets44,11924,560Financial fixed assets9930Stocks39,77114,730Debtors57,88028,262Creditors(51,347)(25,361)Corporation tax(4,492)(1,846)Deferred tax liability(272)(335)Deferred tax asset5,4012,643Finance leases acquired(478)(744)Net assets acquired excluding cash and overdrafts 90,68141,939Goodwill129,42246,841Consideration220,1