Irish operations a bright spot for Grafton Group
Woodie’s DIY and Chadwicks owner Grafton Group has reported a “resilient” performance in subdued markets over the Christmas period.
In a trading update covering the months from November 1 to December 31, Grafton Group said that group revenue fell by 2.9%. But group revenue for the year was up by 0.8% to £2.32 billion from £2.30 billion in 2022.
The company said the geographic spread of its operations and exposure to multiple end-markets are core strengths with 60% of group revenue for the year generated outside the UK from operations in Ireland, the Netherlands and Finland.
Grafton said it expects it full year adjusted operating profit is expected to be slightly ahead of the top end of analysts’ forecasts on the back of stronger trading by its businesses in Ireland along with the “timely” implementation of previously announced cost reduction measures and ongoing group-wide cost discipline.
In Ireland, Grafton said that Chadwicks performed well in the run up to the year end and continued to benefit from an improving trend in daily like-for-like revenue.
It noted that demand was firmer in the residential repair, maintenance and improvement (RMI) and new build markets and in segments served by Chadwicks specialist brands.
But its UK markets remained weak and RMI volumes continued to be under pressure due to lower discretionary spending by households on their homes, the decline in housing transactions and a fall-off in larger home improvement projects.
Meanwhile its Woodie’s DIY, Home and Garden business here also delivered a strong performance in the final months of the year with total revenue growth in its retailing division up by 3.9% on a constant currency basis in the year to the end of December.
Grafton said that its CPI Mortars business saw a sharp decline in volumes as its house building customer base reduced output in response to lower demand from buyers. Volumes were also lower in the StairBox staircase manufacturing business that supplies the RMI market.
Eric Born, chief executive of Grafton Group, said the trading environment in the final months of the year continued to be subdued across most of the company’s markets.
But he added that the company was pleased that adjusted operating profit for 2023 is now expected to be slightly ahead of the top end of analysts’ forecasts.
“We made good progress during the year developing and executing our strategy and in starting to build a deeper pool of acquisition opportunities in targeted European markets,” the CEO said.
“We remain confident in the medium-term drivers of demand in our markets and, underpinned by a strong balance sheet, Grafton is well positioned for growth as trading conditions improve,” he added.
Source: RTÉ News