DIY group sees revenue up 7.4%

Grafton Group has reported a 7.4% year-on-year increase in revenue for the first 10 months of this year, supported by improved trading conditions in its main geographical markets.

The Dublin-based builders merchants and DIY group said yesterday that total revenue — up to the end of October — amounted to £1.6bn (€1.9bn), compared to £1.49bn for the same period last year.

Grafton formally switched its share listing from Dublin to London last month and — in the process — its reporting currency from euro to sterling.

Unsurprisingly, revenue was driven by Grafton’s UK merchanting division — which contributes nearly 75% to annual group revenues — where a 6.2% annualised rise in revenue for the 10 months and a 4.1% increase for the four months to the end of October, was seen.

In Ireland, the merchanting business stabilised following five years of volume declines. The group noticed indications in recent months of a recovery in some areas including the Mid-West, Cork and Dublin. Revenue was up by 1.1% in this division.

However, the closure of two stores accounted for a 1.7% decline in revenue in the Irish DIY business (basically, the Woodie’s chain), which contributes around 9% to group revenues.

However, management did note the recovering economy had led to a slight improvement in consumer spending patterns, and a strong demand for seasonal products during the summer months.

“The housing market in the UK is benefiting from Government-backed initiatives and confidence is slowly but surely returning.

“This should have a positive, though lagged, effect on Grafton as housing transactions and household spending on RMI [repair, maintenance and improvement] increases. In Ireland, consumer confidence has improved and the merchanting and DIY markets have stabilised at very low levels of activity,” chief executive, Gavin Slark commented.

Overall, Grafton said it remains “on course” to meet operating profit expectations for the current year.

Grafton recently tentatively upped its presence in Belgium, with an agreement to buy French multinational Saint-Gobain’s local merchanting business for over €20m in cash, a deal likely to close within the first quarter of the 2014.


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