Builders’ merchant Grafton Group set to report interim results

DIY company forecast to have underlying trading profits of £68.6 million

Uncertain outlook: Grafton Group warned that Brexit is likely to dampen demand for new housing in  UK

Uncertain outlook: Grafton Group warned that Brexit is likely to dampen demand for new housing in UK

 

Builders merchanting and DIY company Grafton Group is due to report interim results this Wednesday, with underlying trading profits of £68.6 million (€80 million) forecast.

Davy Stockbrokers is forecasting underlying trading profits to have grown by more than 17 per cent on a year-on-year basis, or by 10 per cent adjusting for the acquisition of Grafton’s Netherlands operations in the second half of 2015.

Davy said the outlook for Grafton’s earnings remains uncertain, akin to other names in the same sector.

The stockbroking firm noted that Grafton has fallen by more than 20 per cent since the beginning of 2016.

“The stock is the worst performing in the sector on a year-to-date basis despite offering best-in-class growth prospects over the coming 18 months,” it said.

Grafton Group last month warned that Brexit is likely to dampen demand for new housing and home improvements for the remainder of the year in the UK, its most important market.

Growth in UK merchanting like-for-like sales, which make up more than 70 per cent of group revenues, slowed to an annual 1.6 per cent in the second quarter from 5.3 per cent in the first three months of the year. Sales turned negative in June.

Irish merchanting like-for-like sales rose by 10 per cent in the second quarter, while Belgian sales declined 9.5 per cent. A recovery in retail sales in its Woodies’ DIY business in Ireland has continued so far this year, the company said.