Trading at Grafton dips due to coronavirus restrictions
AGM goes ahead after company sees off legal challenge by former chairman Michael Chadwick
Grafton Group chief executive Gavin Slark. Photograph: Nick Bradshaw
The coronavirus pandemic has significantly impacted trading at Grafton Group’s operations in Ireland and Britain as restrictions on businesses saw volumes fall to as low as 10 per cent of normal trade.
In a trading update issued to the market on Wednesday morning ahead of its closed annaul general meeting, the company said it Irish distribution business was trading at 15 per cent of normal volumes, while the UK was at 10 per cent, with the majority of its distribution and manufacturing plants there closed from March 24th.
However, construction activity has largely continued in the Netherlands, with physical distancing measures implemented at Grafton’s distribution business. That has led to the company trading at 90 per cent of anticipated revenue.
Things may change in the coming weeks, however. In the UK, Grafton’s businesses are currently only open for provisions of materials for essential projects and emergency supplies, but May 4th will see many of its branches return to more extended operations, expanding their offering over the coming days and weeks. The group said trading in the year to mid-March, before the restrictions were imposed, was broadly in line with expectations.
The shareholders meeting went ahead only after the company saw off a legal challenge to the closed meeting from former chairman Michael Chadwick on Tuesday.
All motions before the AGM were passed. The only serious opposition was to the motion to re-elect company chairman Michael Roney to the board, which was opposed by 13.9 per cent of the votes cast.
Grafton said the business was taking appropriate actions to manage costs while protecting jobs and is availing of job retention scheme arrangements for around 9,000 of its 11,000 workers in Britain and Ireland, where it perates the Woodies chain of retail outlets among other businesses.
The company said it remained in a strong financial position, with “excellent liquidity”. As of April 24th the company said it had total liquidity of £562 million, which was primarily in accessible cash deposits, and it has further flexibility under the Bank of England’s Covid corporate finance facility.
“Grafton has a strong and geographically diverse portfolio of brands and very experienced management teams who are focused on protecting the group’s businesses and the interests of all stakeholders,” said Gavin Slark, chief executive of Grafton. “The actions that we are taking are to ensure that we emerge from the crisis as a strong and vibrant business.”