Grafton Group remains profitable

FULL-year earnings at Irish building materials and DIY group, Grafton, are likely to be weighted towards the lower end of current market expectations.

The company updated on trading yesterday, saying that the difficult trading conditions it previously reported on in its last interim management statement in November, have continued across Ireland and Britain — its core geographical markets — but that “management continues to deal with the challenges presented in the current trading environment”.

It added that, despite the business environment, the group is profitable and cash generative.

Analysts have forecast pre-tax profits of between €69m and €92m for Grafton in 2008 and sales of around €2.67 billion. In 2007, Grafton generated profits of €228.6m on sales of €3.21bn.

Yesterday’s update from the business itself, said that group sales for last year — Grafton is dueto formally report full-year figures at the end of next month — should come in at around €2.67bn, in line with market estimates, and after the currency conversion of the weak sterling is taken into account.

The British market represents around 60% of Grafton’s revenue.

Last month, Merrion Stockbrokers named Grafton as being something of a beacon of light for Irish construction-related stocks, by just remaining profitable this year.