Grafton ‘cautious’ on UK despite good start to year

Dublin-based builders suppliers business Grafton Group has expressed caution about its core market of the UK despite seeing a strong start to the year.

The bulk of the group’s business comes from its UK merchanting division. In a trading update covering the first four months of the year — published to coincide with its AGM in Dublin yesterday — Grafton said it had become more “cautious” about the British market.

This is despite management last year saying Brexit wouldn’t be a long-term worry and adding, earlier this year, that it was “largely unworried” about the UK’s pending EU exit.

“In view of recent economic and political developments, we are more cautious about the prospects for the UK. However, we have a good portfolio of businesses with strong market positions and we look forward to the future with confidence,” said chief executive Gavin Slark.

Grafton said group revenues rose by 7.7%, year on year, in the four months to the end of April to £851m (€1.01bn). The core UK merchanting business grew sales by 2.5%.

Strong growth was also evident in its other territories — notably Ireland and the Netherlands — where growth is expected to continue.

Irish merchanting revenues were up by nearly 22%, while the retail division — which mainly comprises the Woodie’s DIY chain — grew sales by 20% on the same period last year.

Grafton recently said that it is likely to soften any Brexit effect by expanding its geographical presence across mainland Europe in the coming years.

Belgium, its one underperforming region, managed to show sales growth of nearly 6% in the first four months of this year.