The Grafton Group Project

Understudy Names: Stephen Bray B00037534 Johnny GeraghtyB00020240 Alan LennonB00020051 Emmet Toft B00015911 [pic] Module Name:Strategic Management 2 Lecturer:Mr Liam Bolger Submission Date:29th April, 2010 Word Count:10,413 Table of Contents Background of the company:2 History of the company:3 The Environment7 PESTEL analysis7 Political7 Economic7 Sociocultural8 Ireland populace by Age 20069 Technology10 Environment10 Legal10 Key drivers for change10 The Industry11 Porters Five Forces analysis11 Substitute items/services12 Bargaining intensity of buyers12 Bargaining intensity of suppliers12 Rivalry/Competition13 Openings and Threats14 Opportunities identified15 Threats identified16 Financial Information Analysis17 Analysis of Financial Reports18 Liquidity Ratios18 Profitability Ratios20 Net Profit Margin per Segment20 Earnings per share (EPS)21 Analysis:23 Liquidity:23 Profitability:24 Debt:24 Return on Investment:24 Borrowings:25 issues with getting to credit. 25 Share Price26 Source http:investor/graftongroupplc. com27 Liquidity: Excellent27 Financial Strength:Excellent27 Profitability: Fair27 Growth: 027 Source www. corporateinformation. com27 Outlook for the Future28 Rationalization measures:29 Plans for 2010:29 Opportunities 2010:29 Group Strengths30 Weaknesses31 Strategic Capability31 Critical Success factors for clients (an example of yet not restricted to):33 Corporate Governance35 Grafton Group’s Compliance with the Combined Code36 The Board †who reports to whom? 37 Directors’ Independence and Board Balance38 Performance of the Board39 Corporate Social Responsibility †CSR and Ethics39 Shareholder and Stakeholder Expectations and Influences41 Culture of Organizations and Grafton Group43 Strategic Direction and Corporate level strategy44 Corporate Parent44 The corporate parent as a Synergy manager45 Vital Drift46 International Strategy48 Table Pre-Merger48 Table Post-Merger50 Traditional explanations behind Merger failure51 Through a potential merger Grafton may:52 Strategic Directions53 Market Consolidation54 Market Diversity (Related)55 International system †Travis Perkins and Grafton merger? 56 Bibliography59 Plagiarism Disclaimer:60 Background of the organization: Grafton Group plc is a free, benefit development situated organization with activities principally in the UK and furthermore in Ireland. The Group has solid national and territorial situations in the merchanting, DIY retailing and mortar markets. The Group expects to accomplish better than expected returns for investors. Grafton’s procedure is to expand on solid situations in organizations serving the UK and Irish development segments, to create in related markets, and to develop in organizations with which it is recognizable. In Great Britain, Grafton is the fourth biggest merchanting business exchanging from 430 areas containing 219 Builders Merchanting branches exchanging essentially under the Buildbase and Jackson brands and 211 Plumbers Merchanting branches exchanging for the most part under the Plumbase brand. EuroMix is the market chief in the UK dry mortar advertise where it exchanges from a system of nine assembling plants in England and Scotland. In Northern Ireland, MacNaughton Blair is one of the main builder’s shippers in the region where it exchanges from 20 areas. In the Republic of Ireland, the Group is the biggest manufacturers and plumber’s merchanting business exchanging broadly from 62 branches under the Chadwicks and Heiton Buckley brands. The Group is the market head in DIY retailing in the Republic of Ireland, exchanging broadly from 41 stores and is likewise occupied with the assembling of mortar, plastics and windows in the Republic of Ireland. Today, in Ireland, Grafton is the biggest manufacturers and handymen dealers and the reasonable market pioneer in DIY retailing. In the UK the Group’s merchanting activity is the fourth biggest in the market. 2005 turnover was â‚ ¬2. 6 billion and Profit after Tax added up to â‚ ¬166 million. History of the organization: Grafton’s inceptions go back to 1902 and from that point forward the Chadwick family have assumed a focal job in the advancement of the business. 1909 William Thomas Chadwick sets up his first business called Chadwicks (Dublin) Limited to flexibly developers vendors and significant structure contractual workers with Irish and imported concrete and mortar. Today Chadwicks is the second biggest manufacturers and handymen merchanting brand in Ireland, exchanging from 31 branches broadly. 1930 William Chadwick obtains control of a little firm occupied with the assembling of solid squares and rooftop tiles, which his organization was providing with concrete. In 1931 Concrete Products of Ireland was enrolled as a private restricted organization. Today it is called CPI Limited and is a main producer of dry mortar in the Irish market. William Chadwick, the Group’s author, bites the dust toward the finish of the Second World War, leaving the business to his two children †Terence and Finton Chadwick. 1965 Concrete Products of Ireland turns into an open organization and buys Chadwicks (Dublin) Limited from the Chadwick family. Simultaneously Marley Limited builds its holding to 51%. Marley’s relationship with Concrete Products of Ireland goes back to the finish of the Second World War when Marley obtained a minority shareholding. 985 Mr. Michael Chadwick is designated Executive Chairman. 1987 Marley plc chooses to focus on the production of building materials and as an outcome sold its controlling shareholding in the Group. The Marley shareholding was put with institutional financial specialists and the Group’s the board. The Group opens its first DIY retailing store in the Irish market. 1988 The Group c hanges its name to Grafton Group plc and makes its first UK obtaining, a little warming and plumbing business which gives the Group nature with the huge UK merchanting market. 990 The Group gains MacNaughton Blair a since quite a while ago settled and notable Belfast-based developers traders. Likewise during the year Grafton obtains Joseph Kelly and Son (1994) Limited in Dublin, a developers merchanting business which was to turn out to be very much positioned to serve the requirements of the structure exchange the focal point of Dublin. 1994 The Group’s extends essentially in the UK with the procurement of Bradley’s and Lumley and Hunt plumbing and warming tasks. All out deals in Britain and Northern Ireland increment by 53%, speaking to 21% of Group turnover. 995 Grafton procures P. P. S. Mortars †a storehouse mortar plant situated in Glasgow. This business receives the EuroMix storehouse mortar plan of action and innovation, which has been effectively evolved b y CPI, the Group’s Irish solid items business. Today EuroMix is the main UK mortar maker with eight plants. 1996 The Group proceeds with its key improvement in the UK with its first securing of a builder’s merchanting business †R. J. Johnson, situated in Oxford. 1997 The Group keeps on gaining in the UK including a further 14 areas through six little however noteworthy acquisitions and accomplishes minimum amount in its UK tasks. This is the Group’s tenth year as a free open organization; a time of extensive accomplishment where deals expanded 18% every year and income per share developed at an annualized pace of 29%. 1998 UK builders’ merchanting activities extend considerably with the obtaining of British Dredging plc, the first run through an Irish organization procures a recorded UK plc. This business works a sum of 23 areas consolidating 17 builders’ vendors and six plumber’s dealers. The builder’s merchanting activity is incorporated under the Buildbase brand, which was set up in 1997 as the exchanging name for the Group’s UK builder’s merchanting activity. During that year the Group makes another six acquisitions including a further 19 areas, including the London based Deben Builders Merchants business with 10 branches and A R Hendricks Limited, a substantial side manufacturers trader exchanging from five branches. 1999 The Group proceeds with its jolt on procurement program including a 16 additional areas, through eight acquisitions in the UK. All through the nineties the Group proceeds with the extension of its Irish merchanting and DIY retailing activities and solidifies its situation as market pioneer in the two parts. 2000/2001 During these years, the Group proceeds apace with its jolt on securing procedure. A sum of 24 acquisitions were made during the period, many single branch activities that include an incentive through infilling the Group’s by and large system of areas in the UK. 002 This is a record year with a sum of 15 acquisitions adding a further 39 branches to the UK merchanting system. These acquisitions included five little chains: Lakes in Derby, BMB in Barnsley, and PDM in Edinburgh, Aizlewoods in Rotherham and JKS Heating and Plumbing Supplies in Manchester. 2003 The Group embraces its biggest ever procurement so far †Jackson Building Centers in England including 18 branches †and makes another critical obtaining with Plumbline, Scotland’s biggest free handymen vendors with 17 areas. Generally it was a bustling year with a further seven jolt on acquisitions finished, giving an aggregate of nine acquisitions for 2003. Grafton now has 137 plumbers’ merchanting branches exchanging under the Plumbase brand and 139 builders’ merchanting branches exchanging essentially under the Buildbase and Jackson brands. 2004 The Group finishes its 100th securing since 1998, averaging more than one every month. An aggregate of 19 acquisitions are finished during the year, another record year for improvement. Grafton agrees to procure Heiton Group plc, subject to administrative endorsement. 005 In January Grafton finishes the securing of Heiton Group plc. This business incorporates, bury alia, the No. 1 builder’s mercha