By Geoff Percival
Shares in building materials group Grafton rose by as much as 3.2% after it reported a near 9% jump in first half sales, partly driven by the hot weather spell boosting trade at its Woodie’s DIY retail division.
Overall sales, for the six months to the end of June, jumped 8.6% to £1.45bn (€1.63bn). The Dublin-based group’s core business — its UK builders merchanting arm — grew revenue by 6.7%, but merchanting was also up by 10% in Ireland and by over 21% in the Netherlands. Only Belgium, to which management recently reiterated its commitment, saw a fall in sales. Its retailing business — ultimately, the Woodie’s DIY unit in the Republic — grew sales by almost 16% in the first six months of the year.
“The very cold conditions experienced in March and April have been followed by a hot and dry May and June, which has benefited a number of businesses, particularly Woodie’s...Our businesses in Ireland and the Netherlands continue to perform well,” said Grafton’s chief executive Gavin Slark, who added that the group remains “well-placed” to meet full-year earnings targets.
“This update, yet again, highlights the benefits of Grafton’s differentiated model which offers exposure to the higher growth Irish and Dutch construction markets complemented by its Selco and acquisition expansion strategy. The stock continues to be our favoured play in the UK merchanting space,” said Robert Eason at Goodbody.
Grafton shares ultimately closed up 0.2%.