Grafton forecasts 25% rise in operating profits

Builders merchant and DIY specialists, Grafton Group, yesterday said it expected turnover in the first six months of 2004 to be more than 20 per cent ahead of last year, while operating profits should increase by 25 per cent.

In a trading statement, the group, which operates the Woodies DIY chain in this country, said it had continued to experience favourable conditions in both its UK and Irish markets. It said that the recent good weather had boosted the performance of both its Chadwick's merchant business and DIY operations.

"Turnover in the first six months of 2004 is expected to exceed last year's levels by over 20 per cent and this is also reflected in significantly increased levels of operating profit," the statement said.

"Group operating profit before goodwill and amortisation for the half-year is anticipated to increase by over 25 per cent on the same period in 2003."

It stated the group profits would be well ahead of expectations. Last year, Grafton reported operating profit before goodwill of €53.4 million in the six months to the end of June 2003.

In the UK, Grafton said it was benefiting from the larger acquisitions made during 2003, while operating margins were improving in line with market expectations.

"Recent acquisitions are also performing well," it said. "The new EuroMix dry mortar plant in Southampton is scheduled to commence production later this month."

The company recently opened a new flagship Woodies DIY store on Dublin's Naas Road. It brought to 18 the number of Woodies outlets. The company has a medium-term target of 20.

Earlier this year, it announced that it had entered a sale and lease-back deal of the Naas Road facility with Goodbody Stockbrokers, which holds the property for a group of pension fund investors.