Grafton shares rise 1% on UK outlook

Shares in Grafton have risen 1% in London as the Woodie’s and international merchants group reassured about the outlook for its UK operations. 

There are fears the UK economy could slow rapidly as consumers rein in spending as prices soar after the Brexit-driven slump in the value of sterling.

However, in its trading update, Grafton chief executive said the group was cushioned by its international operations and by positive trends in Ireland and the Netherlands. “While we remain optimistic on the medium-term outlook for the UK, we are cautious about the shorter term impact of current uncertainty and pressure on real incomes which may temper growth in spending on housing,” said Gavin Slark.

Grafton shares have risen steeply since the June 2016 vote by the UK to leave the EU and have gained 30% since the start of this year.

Grafton generates over 90% of its sales from its international merchanting activities and only a small proportion from Woodie’s. Though exposed to any downturn in the UK market, revenues generated in the eurozone have provided a boost.

In the latest three months to the end of June, Irish merchanting outperformed other countries. Sales on a constant currency basis here rose over 10%, against 6.2% growth in Belgium, 4.7% in the UK, and a 4.4% expansion in Holland.

Merrion Capital senior equity analyst Darren McKinley said: “We consider the outcome in these two markets (Belgium and the UK) to be very positive particularly given the disappointing results reported by other UK retailers.” It has a ‘hold’ recommendation.


More in this Section

No surprise if airlines collapse as winter sets in

Little drama and little joy from today’s budget


Breaking Stories

Hard Brexit a significant threat to UK motor industry, warns Ford chief

Dispute over Blackrock premises which receiver wants to sell

First-time buyers paying €157 above European average for mortgage each month

Summary judgment application against former AIB and Central Bank director struck out on agreement

Breaking Stories

Garden expert Matthew Biggs offers 5 tips to make the most of your greenhouse this autumn

As Ariana Grande and Pete Davidson allegedly split, here’s how grief can affect your relationship

Theatre review: The Nightingale and the Rose

1 year since Alyssa Milano’s first #MeToo tweet: Have things actually changed for women?

More From The Irish Examiner