Grafton: Irish market testing
It said prolonged austerity measures and high levels of personal indebtedness would likely make trading conditions challenging.
The company said operating profit growth will slow in the second half of the year as people suspended DIY work.
The group expects full year operating profit before restructuring and amortisation costs to be in the range of €52 million to €55m compared with €50.6m in 2010. The board said, however, it remains confident of achieving further improvement in profitability.
Group turnover for the 10 months to October 31, 2011, was up slightly to €1.73 billion compared to €1.7bn in the same period last year.
Grafton, which makes nearly three quarters of its turnover in Britain, said in the first half of the year adjusted operating profit rose 40% to €26m.
Turnover in the Irish retailing business fell by 5.7% in the period compared with a decline of 4.6% in the first half. Turnover in the manufacturing segment increased by 6.4% in the 10 months to October relative to growth of 6.5% in the first half. Grafton shares closed at €2.60, down 5.3%.
Average daily British like-for-like sterling turnover growth slowed to 2% in September and October compared with growth of 4.7% in the first half.
“Following the completion of the successful refinancing the group now has €388m of bank facilities which have an average maturity profile of more than four years.
“When combined with the US Private Placement loan notes this leaves Grafton in a strong financial position,” the company said.
As well as Woodie’s Grafton also owns the Atlantic Homecare stores in Ireland and is the largest DIY retailer in the country with 41 stores.
In addition, it is also the biggest builders and plumbers merchanting business in the country, operating 28 Heiton Buckley branches and 24 Chadwicks stores. In Britain Grafton owns MacNaughton Blair building supplies chain.
