Grafton Group profits up nearly 7% amid strong Irish performance

The Grafton Group operates both Woodies and Chadwicks in Ireland. 

Pre-tax profit at Woodies and Chadwicks owner Grafton Group rose by 6.9% to £77.7m (€90.3m) during the first half of this year due to strong performances in Ireland as well as Iberia.

However, the company warned that challenging market conditions in Britain continues to weigh on profitability while the timing of a sustained recovery in Northern Europe remains uncertain.

According to the company’s interim results, it generated £1.336bn (€1.55bn) in revenue, up 6.7% year-on-year. The board of Grafton Group has declared an interim dividend of 11p (12.8c) per share, an increase of 2.3% on last year’s interim dividend of 10.75p (12.5c).

The company said that early trading in recently acquired Cork-based Cygnum and Spanish company Mercaluz is in line with expectations, with integration plans progressing well and “the group additionally benefiting from Mercaluz's seasonally stronger trading period”.

Chief executive of Grafton Group Eric Born said, despite a “relatively slow” start to the year “we are pleased to have grown revenue”.

Mr Born said their outlook for the second half of the year is “not dissimilar” to the first half of the year, with Iberia and island of Ireland strong, northern Europe more mixed and “continuing weakness in Great Britain”.

“Our medium-term outlook remains very positive supported by structural housing deficits in each of our markets and, in many cases, pent-up demand for repair, maintenance and improvement (RMI),” he said.

In its outlook, the company said it remains on track to deliver a full year adjusted operating profit of £190m-£200m (€221m-€232m) “recognising that the important autumn trading season is still to come”.

The company said that while geopolitical uncertainty, related inflationary and supply chain risks persist, “the medium-term outlook for Grafton remains positive”.

“Key growth drivers include structural housing undersupply across all its markets and an anticipated recovery in RMI demand after an extended period of restrained consumer spending.”