Woodie's DIY plays leading role as Grafton Group profits ride out Covid storm

Shoppers queueing outside the Woodie's DIY store in Glasnevin after the lifting of the first lockdown

Strong demand for home and garden products after Ireland’s first Covid lockdown saw Woodie’s DIY make a key contribution to the finances of parent company Grafton Group.

The Irish building materials provider said revenue and profitability over the four months to the end of October were ahead of expectations. Grafton’s total group revenue was up by 5.1% at £1bn (€1.1bn).

Grafton generates around 90% of its annual revenues from its building materials businesses in the UK, but it also has similar operations in Ireland and the Netherlands, as well as the Woodie’s shops here.

Revenues rose by 2.3%, 11%, and 2.9% respectively across Grafton’s building materials distribution businesses in the UK, Ireland, and the Netherlands. The retail division — essentially Woodie’s DIY — grew sales by over 41% in the period.

“There was a strong recovery in the period following the significant disruption to trading in the second quarter caused by the pandemic,” Grafton stated. 

"Demand was strongest in the Woodie’s DIY business in Ireland and in the residential repair, maintenance, and improvement segment of the distribution markets in the UK, Ireland and the Netherlands."

The group said it is now on course to deliver “a strong performance” for the second half of the year following its higher-than-expected level of operating profit for the last four months.

It has also increased its adjusted operating profit forecast for the second half of the year to a range of £130m-£140m.

Grafton’s shares rose as much as 6% on the back of the update.

Davy said it will likely increase its own forecasts for Grafton’s second-half trading profits by between 25% and 30%.

“While there remain externalities that Grafton has little control over, the business clearly is in great shape,” said Davy analyst Flor O’Donoghue.