Grafton builds on stronger demand

Grafton Group has reported an 11.3% annualised increase in first-half revenue to just over £1bn (€1.26bn); buoyed by growing economic momentum in its core geographical markets of Britain and Ireland.

The Dublin-based builders merchants firm — which switched its share listing to London last year — said, via a trading update yesterday, that revenues were boosted by improved customer demand and better weather conditions in core markets.

“Our UK and Irish merchanting businesses have benefited from an improved market backdrop which, combined with our organic growth plans, means the group is well-placed to build on its strong first-half performance,” Grafton’s chief executive, Gavin Slark said.

Average daily like-for-like revenues in Grafton’s UK merchanting business — which, roughly, represents 75% of total group turnover — grew by 8.2%, on a year-on-year basis, in the first half. The Irish merchanting business also had a strong first half, with revenues up by over 13% annually. In Belgium, where Grafton has grown via acquisition, sales were up by nearly 4% year-on-year.

In the group’s Irish retailing arm — which is dominated by the Woodie’s DIY chain and accounts for just 8% of total group revenue — management said this period saw “a very tentative recovery”, which got underway in the second half of 2013 and was “supported by employment growth and improving trends for retail sales”.

Grafton, however, noted its Irish retail pick-up came from a low base and said it still views the current year as being one of transition for Woodie’s, as new management focuses on improving its customer proposition.