Our view A good set of results reflect good trading conditions and the strategic repositioning of the Group in FY21 with the demerger of Wickes and sale of Plumbing and Heating. The balance sheet is hugely improved as a result. Results are modestly ahead of consensus, albeit largely due to higher than expected property profits. The share buyback has been increased to £240m. Recent trading and outlook comments read reassuringly with more progress to be made in FY22. FY22 consensus looks likely to edge up by 2-3% and with property profit expected to be only £25m in FY22, the underlying profit increase expected for FY22 looks decent. Management seems confident of the volume outlook and strong price inflation for the foreseeable future. FY21 results summary Good set of FY21 results. Adjusted operating profit of £353m looks around 3-4% higher than consensus, albeit with the help of higher property profit of £49m, versus the c.£40m expected. The year enjoyed strong LFL revenue growth of 25.4% in FY21 and 14.4% ahead of FY19, with Merchanting and Toolstation both performing well in a strong market. The adjusted continuing operating profit margin was up by 60bps versus FY19 with Merchanting seeing a 40bps boost from inflation and stock gains. Covenant net debt of c.£87m was broadly as expected with IFRS16 leverage comfortable at 1.2 times. A total ordinary DPS of 38p was higher than the 33p we expected and the Group has returned the net proceeds from the P&H disposal through an already paid 35p special DPS and the ongoing share buyback of £170m which has been increased to £240m today. Outlook comments read reassuringly with a positive start to the year and further progress expected to be made in FY22. Management are confident volumes will be good with new housing and RM&I remaining strong and price inflation supportive. Valuation Shares are down by c.9% YTD and essentially flat on a year ago. They reside on a FY22E PE of c.13.7 times and an EV Sales multiple of c.0.72 times. They offer a dividend yield of c.3.0%.