Grafton bounces back into profit

DIY and builders’ merchants specialist Grafton reported a €14.8 million first-half operating profit this morning, compared to a €8.3 million loss for the same period a year earlier.

Grafton, which owns the Atlantic Homecare and Woodie’s DIY chains, said revenues for the first six months of the year totalled €979 million as against €990 million last year.

Pre-tax profits rose from €3.7 million in the first-half of fiscal 2009 to €13.4 million.

The group said like-for-like costs were reduced by €22.6 million over the period.

Operating profit at the company's UK merchanting division more than doubled during the first six months of 2010 while turnover increased by 5 per cent to €678.5 million.

The group said its Irish merchanting business approched breakeven with a €0.5 million loss. The outlook for Ireland is for a tentative recovery to take hold and for modest growth to return in late 2011, the company said.

Grafton said improved trends in turnover were sustained in July and August, establishing a base for renewed earnings growth.

"The market challenges faced by the group over recent years eased considerably in the first half. Losses in Irish merchanting were much reduced and operating profit in UK merchanting increased strongly," said executive chairman Michael Chadwick.

"The improved trends in group turnover were sustained in July and August. Grafton's profits are now recovering and we expect further profit improvement in the second half. A good base has been established from which renewed growth in earnings can be generated over the coming years as market conditions normalise," he added.