Grafton Group on track to meet its full year expectations
Woodie's DIY and Chadwicks owner Grafton Group said its performance so far this year has been in line with its expectations and, while the more important trading period lies ahead, it remains on track to meet its full year expectations.
In a trading update issued ahead of its AGM in Dublin today and covering the period from January 1 to April 27, Grafton said that group revenue amounted to £773.1m, up 7.8% on the same time last year and up 9% on a constant currency basis.
Grafton said its revenue benefited from the acquisition of Salvador Escoda, which distributes heating, ventilation, air conditioning, water and renewable products in Spain, and which completed in October.
The company said its group average daily like-for-like revenue for the period was 2.7% higher than in the same period last year.
It noted that trading over the last two months has been supported by improving trading conditions in certain parts of the group and favourable weather conditions, which more than offset the weather impacted trading conditions experienced in January and February.
Grafton said that its Chadwicks business saw like-for-like revenue growth of 3.5% so far this year as trading activity recovered strongly from the impact of Storm Éowyn.
It noted that the outlook for growth in construction remains positive with strong support and policy continuity from the Government to increase housing completions and infrastructure investment.
But average daily like-for-like revenue in the UK declined by 0.3% in the period under review as business improved, with modest product price inflation of 1-2%, following a slow start to the year.
Its Dutch average daily like-for-like revenue grew by 2.9% due to strong demand from key accounts and growth in access control related projects, but Grafton noted that growth in activity has moderated more recently as a result of delays in the commencement of some larger construction projects.
Meanwhile, in Finland, IKH's average daily like-for-like revenue declined by 0.8% as mild weather conditions reduced sales of seasonal products which was partially offset by strong growth in export sales to Estonia.
It added that the integration of Salvador Escoda in Spain continues to progress well with average daily like-for-like revenue up 6.8%, supported by the timing of strong project related sales and favourable market conditions.
In Grafton's retailing division, its Woodie's DIY, Home and Garden business here had a very strong start to the year with average daily like-for-like revenue up 10% on the back of growth in both the number of transactions and average transaction values.
Looking ahead, Grafton said that notwithstanding the potential impact of US tariffs and any associated economic uncertainty, the medium term fundamentals remain positive for the company, with housing shortages across all its geographies and an expected recovery in RMI demand after several consecutive years of low levels of investment by households.
"The group's balance sheet remains strong with Grafton well positioned to support future development activities as opportunities arise," it added.
Eric Born, Grafton Group's CEO, said that after a relatively subdued start to the year, and with the more material trading period lying ahead, the company was pleased that its performance was in line with its expectations, adding that it remains on track for the full year.
"We are focused on what we can influence within our businesses rather than being unduly distracted by the uncertainties around us," the CEO said.
"Our platform acquisition of Salvador Escoda in Spain towards the end of last year is an exciting foothold into a fragmented and growing market. We continue to actively evaluate opportunities in all our markets to strengthen our position both organically and, where appropriate, by acquisition using the strength of our free cash flow conversion and balance sheet," he added.
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