Revenues up 6.7% to £698m at Grafton Group

Builders' merchant and DIY group Grafton has reported a 6.7 per cent increase in group revenue for the first four months to the end of April.

In an interim management statement issued ahead of the group’s annual general meeting in Dublin on Tuesday, Grafton said revenue rose to £698 million (€971m) compared to £654 million (€910m) a year earlier.

The company, which operates the Woodie’s chain across Ireland, and also has operations in the UK and Belgium, said market conditions, were broadly positive during the period under review with the continuing recovery in both the Irish and UK economies contributing to volume growth in its businesses.

The group said operating profit for the seasonally quieter period to the end of April was ahead of the corresponding period in 2014 and reflected a slightly higher Group operating profit margin. It is anticipated that operating profit will be more heavily weighted towards the second half of the year reflecting the benefit of both ongoing development and margin improvement initiatives.

The group’s merchanting division, which accounts for 91 per cent of group revenue, recorded growth in both Ireland and the UK. The strong momentum in revenue growth in Grafton’s Irish merchanting business that started in the second quarter of 2014 has continued it said. Like-for-like revenue continued to increase at a moderate pace in the UK merchanting business but the Belgian division was impacted by general economic weakness resulting in a small decline.

Grafton said its DIY business in Ireland benefitted from modest revenue growth as the recovery in the wider economy started to slowly transition into the retail sector following a prolonged period of flat or declining revenue.

The company said it remains in a strong financial position supported by strong cashflow from operations, low net debt, significant cash deposits and undrawn bank facilities.

"The group is well positioned to benefit from growth in its markets and from ongoing development activity that will support further progress towards the delivery of its medium term targets outlined earlier this year," said chief executive Gavin Slark.