Grafton Group shares slip on back of Brexit vote uncertainty

Shares in Dublin-headquartered builders merchanting business Grafton Group slipped yesterday as the UK-focused company warned that Brexit uncertainty is negatively affecting its trade at present.

In a trading update released to coincide with its AGM, Grafton detailed a healthy start to the year but warned of potentially significant headwinds.

In the first four months of the year, Grafton saw its total group revenue rise by 13.2% year-on-year.

This was driven by its merchanting division which accounts for 91% of group revenue.

The Irish arm of that division saw a 17% rise in revenue, during the period, with UK sales ahead by 9%.

The retail arm — which mainly consists of Woodie’s DIY — grew sales by 8%.

Chief executive Gavin Slark said the group is positive about trading prospects in Ireland, the Netherlands, and the UK, despite “uncertainty” over the outcome of the upcoming Brexit vote “having a bearing on current activity levels” and demand for outdoor products slipping in April and affecting retail revenue.

Mr Slark said that there were too many variables to suggest what impact a Brexit could have on the business, but suggested if the UK did vote to leave the EU long drawn-out trade negotiations could impact on business.

Regarding acquisitions he said a strong balance sheet would allow Grafton to spend as much as £200m on acquisitions, adding that further activity in the Dutch market — where Grafton entered last year with the €91.5m purchase of tool distributor Isero — is high on the agenda.

The group’s London share price was down by 2.5% in early trading, before closing down 1.23% at £6.82.