Grafton turnover dips 32% in most challenging conditions ‘in decades’
The fall-off in credit hit spending on housing and residential repair, maintenance and improvement as the economy continued to slow down, according to an its interim management statement issued by the group ahead of its AGM which was held in Dublin yesterday.
In the year-to-date trading conditions have worsened considerably and are reported to be much weaker than in the first quarter of last year, it said.
With the collapse in the housing market, the group said housing starts and completions have fallen while lower activity in other key areas “have significantly impacted the group’s merchanting and manufacturing businesses”.
Poor weather has also hurt sales in the first three months of 2009 while the 15% decline in the average value of sterling was also a factor in the overall performance.
Turnover for the three months to March 31, 2009 was €470 million, down €220m or 32% on the first quarter of 2008.
The merchanting business, accounting for 85% of turnover in the period, suffered a 25% decline in turnover on a constant currency basis.
With capital and acquisition spending curtailed, the development of the merchanting business continued with two new Selco stores and five other locations.
No acquisitions were completed in the period while its Irish branches suffered a decline in turnover of 45%.
The retailing business, exclusively Irish-based, held up slightly better than expected while consumer spending declined from the high levels of recent years.
The group’s retailing turnover declined by 17% in the period.
Executive chairman Michael Chadwick said in an interview sales would fall to just over €2 billion for the year in line with market expectations.
“Brokers generally are forecasting something over €2bn, and that would seem reasonable to me,” Mr Chadwick said.
