Woodie's DIY owner Grafton Group 'in good shape' amid supply and price pressures

The group which operates in Ireland, Britain, the Netherlands, and Finland saw revenue grow year-on-year by 28% to €2bn in the first 10 months of the year

Grafton Group chief executive Gavin Slark has said supply chain disruption and pricing pressure remain "a challenging backdrop" for the group's suppliers and customers. 

Grafton Group – the owner of the Woodie’s DIY retail and Chadwicks building supplies businesses - has said it expects to finish this year “in good shape” despite “a challenging backdrop” of supply chain disruption and pricing pressures.

In a trading update, the group – which operates in Ireland, Britain, the Netherlands and Finland – said positive momentum seen in the first half of the year carried over into the second. Total group revenue grew, year-on-year, by 28.3% to £1.76bn (€2bn) in the first 10 months of the year.

That total excludes the traditional merchanting business in Britain that Grafton is selling. It also has led to the group upping its full-year profit guidance.

Grafton said trading in the period was stronger than anticipated and it now expects to achieve full-year adjusted operating profit of between £265m and £270m for 2021. This compares to current analyst consensus forecasts of £256m.

“The overall group delivered a good performance in the period, against strong comparatives, leading to an increase in current year operating profit guidance supported by the strength of our market positions, geographic diversity, and strong financial position," said group chief executive Gavin Slark.

Grafton said it saw continued strong performance in its UK and Netherlands operations. 

Strong trading momentum

In Ireland, the “strong trading momentum” seen in the Chadwicks building supplies distribution business, following the phased reopening of the construction sector in mid-April, continued. 

Grafton said that was supported by the improved economic backdrop and “buoyant levels of activity in the residential RMI [repair, maintenance, and improvement] and new-build markets”.

It said “exceptional revenue growth” at the Woodie’s DIY retail chain, which was seen following the reopening of non-essential retail and leisure activities here in May, moderated. While that had been anticipated, Grafton said there was still a “step change” in Woodie’s performance this year compared to 2019 pre-pandemic levels.

Grafton said it is “well-placed to outperform” in its markets, but warned supply chain disruption and pricing pressure “remain a challenging backdrop for many of our suppliers and customers”.