Grafton revenue up 8% to €2.3bn

Improvements in general economic conditions and consumer sentiment boosted performance at building materials and DIY specialist, Grafton Group last year, with overall revenues rising 8% to £1.9bn (€2.3bn).

The Dublin-headquartered group, which switched its share listing from the Iseq to London last year, said improved activity, particularly in the second half of 2013, provided evidence that the recovery in its chief markets “has started to take hold”.

“There are encouraging signs that the relatively recent recovery under way in our principal markets appears to have more substantive foundations,” said group chief executive, Gavin Slark. “Grafton is well-placed to benefit from a sustained improvement in trading conditions, but we are adopting a cautious stance towards our prospects for 2014 until such time that activity levels in our principal markets have strengthened further.”

The improved performance was driven by Grafton’s manufacturing business, which accounts for nearly 90% of total annual revenues.

In the British merchanting division, revenue was up 6.7% in the year, with Irish merchanting seeing a revenue rise of just under 2%. The British division generated almost three quarters of group revenue and showed a return to volume growth after five years of flat or declining volumes. A recovery in the British housing market was a particular boost.

The Irish merchanting business showed a stabilisation in the first six months of 2013 before returning to growth in the second half.

“There were early indications that the new housing market returned to modest growth following a period of contraction that continued for almost six years,” Grafton said in a statement.

The only part of the business to show a revenue drop — down by 0.9% — was the Irish retailing division, headed up by the Woodie’s DIY chain. Despite “a noticeable improvement in sentiment during the second half of the year”, consumers remained relatively cautious, Grafton said. It added that spending across the Woodie’s network showed only “modest growth” in recent months. Above all, however, the closure of two stores accounted for the overall fall in revenue in the division.

Grafton’s share price was down by just under 2% yesterday at £6.42. The group is scheduled to publish its full annual results in the first week of March.