Grafton revenues increase slightly

The exchange rate between sterling and euro, as well as the harsh weather, have had a negative effect on trading at building group Grafton, but the company reported yesterday that its revenue increased marginally.

In an interim management statement issued to the stock exchange, the firm — which owns Woodies DIY and Atlantic Homecare — reported that its revenue for the first four months of the year had increased by €1m.

For the four months to April of this year, the group reported revenue of €677m up from €676m for the same period last year.

“The translation of UK revenue at a less favourable sterling/euro exchange rate relative to the prior period reduced group turnover by €12m.

“Trading for the period was influenced by adverse weather conditions and continued economic weakness in the group’s markets,” the company said.

Grafton noted the Irish retail environment still faces a difficult macro-economic environment.

Merrion analyst, Alan McQuaid said demand continues to fall.

“In Ireland, Irish merchanting volumes increased by 1% on a like-for-like basis in the four months to April while Irish retail sales declined by 8.7% due to softening demand,” said Mr McQuaid.

Grafton said the weather meant that the start of the outdoor season had been delayed, resulting in lower volumes of sales.

In the UK — which accounts for almost three quarters of the group’s turnover — activity was slightly higher.

Bad weather in March had resulted in lower sales, but levels recovered in April.

“Management at Grafton continue to remain cautious in terms of outlook despite some improvement in activity levels in May.

“We are modelling for the improvement in profitability levels for the group in 2013 to be led by self-help measures which would appear to be prudent at this point and in line with management commentary,” Mr McQuaid said.