Woodie’s enjoys record June despite dip in parent’s underlying sales

Grafton Group, the builders merchanting and DIY retailing group, said on Thursday that average underlying sales dipped by an annual 1.1 per cent in June as the Irish and British economies gradually reopened from lockdowns. Like-for-like sales had been down 38 per cent in May.

However, t the Dublin-based group said its Woodie’s retailing outlets in the Republic, which opened on May 18th after a two-month closure, set a new record for monthly sales in June amid “exceptional sales of seasonal products”.

Total group sales rose 11.4 per cent on the year in June to £222.4 million (€247.5m), boosted by two extra trading days and revenue from Dutch company Polvo, an ironmongery, tools and ventilation systems specialist that it acquired last July for €131 million.

"Strong demand in June in our businesses in Ireland and Netherlands, and in Selco [a supplier to small builders] in the UK was partly offset by a slower pace of recovery in the traditional distribution and manufacturing businesses in the UK," said Grafton, which also owns Chadwicks in Ireland.

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However, the company, led by chief executive Gavin Slark, said it was still not in a position to make forecasts for the full year, citing continued uncertainty in its main markets.

Group revenue for the first six months of the year fell 19.4 per cent to £1.06 billion as a result of the coronavirus pandemic.

“While we face many challenges in the months ahead, we are encouraged by the group’s trading and financial performance in the month of June, which represented an important milestone on the road to recovery,” said Mr Slark.

“Grafton is in a strong financial position, and our resilient portfolio of market leading businesses is emerging stronger from this crisis and remains well positioned for future growth.”

Bank accounts

Grafton had access to £658 million (€732.3m) of cash at the end of June, including money in its own bank accounts and undrawn debt facilities.

“In view of the group’s strong cash and liquidity position, debt of £263 million that had been prudently drawn in April under the committed revolving bank facilities and held in cash was repaid,” it said

Director salaries, fees and pension arrangements, which were temporarily reduced in April in response to the impact of Covid-19 on business, have been restored this month following the successful reopening of the business in June.

The group’s annual bonus scheme for 2020 remains suspended, it said.

“Given the huge disruption and challenges caused by Covid-19, we believe Grafton has done as well as could have been expected,” said Davy analyst Florence O’Donoghe. “We will review our forecasts and, given the recent trend, the outlook for this year appears more positive than what our estimates would indicate.”