Grafton reports 3% rise in H1 turnover

Grafton Group has reported a higher turnover and a good improvement in operating profit in the half year to June 30, 2011.

Group turnover increased by 3% to €1,008.1m (2010: €978.7m).

Operating profit before amortisation and restructuring increased by 40 per cent to €26.2m (2010: €18.7m).

Group profit before taxation, amortisation and restructuring costs increased by 16% to €20.2m (2010: €17.4m).

They said the gross margin was "in line with 2010" and overheads in the like for like business were marginally lower.

Restructuring costs of €4m were incurred in the period (2010: €2.9m).

The group's half-yearly report showed that UK operating profit increased in "a market that experienced a small contraction in volumes".

The report said: "Despite a prolonged period of market weakness, the performance of the Irish Merchanting and DIY Retailing businesses improved in the half year in response to the measures taken to reduce costs."

Gavin Slark, Chief Executive Officer said: "The group is well placed to deal with the continued difficult trading conditions in our core markets. A number of self help initiatives have been identified that will enable us to improve our performance in margins, costs control and cash generation.

"This leaves us in a strong position to take advantage of any economic upturn or expansion opportunities."

The Group continued to generate strong cashflow from operations and ended the half year in a healthy financial position with gearing reduced to 26% of shareholders’ equity (30 June 2010: 29%).

The Belgian builders merchanting business in which the Group had a 49% interest traded successfully and completed two acquisitions in the current year increasing its annualised turnover to circa €50m.

Group turnover now includes the Group’s share of that business which amounted to €10.8m in the half year.