‘Broadly positive’ fourth quarter for Grafton Group

Builders merchanting and DIY group Grafton said on Tuesday that trading conditions in its final quarter of the year were "broadly positive", on the back of strong growth in Ireland and it reiterated its full year operating profit guidance.

Gavin Slark, chief executive officer of Grafton Group, said: "2015 was a year of significant development activity for the group with the continued expansion of the Selco branch network, bolt-on acquisitions in the UK merchanting market and the purchase of Isero which now gives the group a presence for the first time in the Netherlands market".

Mr Slark said Grafton anticipates reporting operating profit for 2015 in line with the guidance of about £125.5m - £127.0m.

Revenues in the year to December 31st 2015 rose by 6.3 per cent to £2.2 billion, while in Ireland, where Grafton operates the Woodies chain, revenues rose by 7.9 per cent in Q4, or by 10.1 per cent in the year.

“The merchanting business in Ireland continued to perform strongly as record low interest rates and growth in house prices and housing transactions supported increased activity in the residential repair, maintenance and improvement and new build markets against the background of an acceleration in the rate of growth in the Irish economy,” Grafton said.

In the UK, the group's merchanting business, which accounted for three quarters of group revenue, "evolved broadly as anticipated with an easing of trends towards the year" Grafton said. In Belgium, a weak economy contributed to a decline in second half like-for-like revenue and weaker margins.

Retail revenues rose by 7.9 per cent in the final quarter, or by 4.4 per cent in the year to December 31st, as Grafton reported strong second half revenue growth in the Woodie’s business.

UK manufacturing revenues experienced a “softening” in demand in the second half of the year as the rate of growth in the construction of new homes slowed.