Revenue at building materials firm Grafton Group up 9.1%

Woodie’s owner said pace of growth in Irish merchanting business ‘moderated a little’

Grafton Group chief executive Gavin Slark

Grafton Group chief executive Gavin Slark

 

Revenue at building materials company Grafton Group increased 9.1 per cent in the 10 months to the end of October.

The firm, in a note to the stock exchange on Thursday, said revenue amounted to £2.3 billion (€2.6 billion), which was an increase of 9.1 per cent on revenue of £2.1 billion compared to the same period last year. The increase in constant currency terms was 6.9 per cent.

On merchanting, which comprises more than 90 per cent of the company’s revenue, Grafton said the rate of like-for-like revenue growth in the UK merchanting business, was influenced by a weak third quarter in 2016.

Demand softened in October and volumes were broadly flat when measured against an improving trend in the fourth quarter of last year.

The company said the pace of growth in the Irish merchanting business “moderated a little”, but that the prospects for sustained growth were “positive”.

It said the recovery in house building “gathered momentum from a low base but it will require several years for supply to meet ongoing demand”.

“Non-residential construction is in the early stages of a recovery that is expected to remain on a firm growth path,” it said.

On retail, which comprises 6 per cent of the firm’s revenue, it said spending in Woodie’s stores “increased strongly” as customers “responded positively” to store upgrades, and as employment and incomes continued to rise.

“The business is now focused on the typically higher volume final two months of the year when the seasonally important Christmas category is a key driver of demand,” it said.

In relation to manufacturing, which makes up 2 per cent of group revenue, it said CPI EuroMix, the market leading UK mortar manufacturing business, experienced “good growth” in volumes as demand in the new homes market “remained strong”.

“The business increased the number of house building sites that it serves,” it added.

Grafton Group chief executive Gavin Slark said he expected current trading conditions to continue.

“We are pleased with the performance of the group during the period and our expectations for the full year remain unchanged,” he said.

“We anticipate that current trading conditions in the UK merchanting business are likely to continue over the remainder of the year while the Irish and Netherlands businesses should benefit from favourable trading conditions and strong market positions.”