Grafton Group
plc
Trading
Update
Grafton Group plc ("Grafton" or "the
Group"), the international building materials distributor and DIY
retailer, issues this trading update for the period from 1 January
2024 to 30 June 2024 ahead of the release of the half year results
on 29 August 2024.
Eric Born, Chief Executive Officer of Grafton Group plc
commented:
"We were very pleased with the
performance of our businesses in Ireland, where the outlook for
growth continues to remain positive. Elsewhere the repair,
maintenance & improvement, and new build markets remain more
challenging, but our management teams will continue to actively
manage both our gross margins and cost base in response to market
conditions. Medium-term structural industry dynamics remain
positive, and as flagged at the time of our AGM update in May, we
expect profitability to be slightly more weighted to the second
half of the year.
"Given our strong financial position
we are actively progressing inorganic development opportunities in
existing and new European geographies. Our objective is to
continue to strengthen our market and sector positions and add to
our portfolio of high-quality cash generative businesses within a
disciplined financial framework.
"With our strong market positions
and the scope for operating leverage throughout the Group's
businesses as the macro-economic outlook improves, we remain
confident in the medium-term outlook for Grafton."
Trading and Performance
Group revenue in the period from 1
January 2024 to 30 June 2024 was £1.14 billion (H1 2023: £1.19
billion), down 4.4 per cent from the prior year and 3.0 per cent
lower in constant currency.
Overall trading in the Group's
businesses remained challenging in the period with average daily
like-for-like revenue down 4.5 per cent on the prior year and our
management teams have continued to actively manage both our gross
margins and cost base in response to market conditions.
Distribution
In Ireland, Chadwicks saw a
resumption of growth in average daily like-for-like revenue in the
second quarter following a decline of 0.2 per cent in the first
quarter of the year. Volume growth in the first six months of circa
5.4 per cent was strongly ahead of the comparable period last
year. The Government policy agenda is strongly supportive of
increasing the development of new homes and, as a consequence, the
housing market continues to grow with commencements strongly ahead
in the first half and reaching a post Global Financial Crisis
high. The outlook for growth in construction in Ireland
remains positive and the deflationary pressures seen in steel and
timber have continued to moderate with overall price deflation of
circa 4.9 per cent in the first six months.
In the UK, the weak trends
experienced in the first quarter in the repair, maintenance &
improvement market continued up until the end of the period. In
Selco, price deflation in June was circa 2.0 per cent and is
showing an improving trend from the rate of circa 4.0 per cent
experienced in the first half overall. Customers remain
cautious with discretionary spending which has resulted in lower
investment on home improvements, although there are positive signs
emerging of improving consumer confidence.
In the Netherlands, revenue growth
from customers engaged on larger construction projects continued to
partially offset the modest decline in sales to timber factories
and smaller customers. There have been more positive signs
that the housing market is starting to improve with increasing
transactions and price rises in the existing housing
stock.
In Finland, IKH's average daily
like-for-like revenue was 7.7 per cent lower as a result of the
continued weakness in the domestic economy, export markets and the
construction sector in particular, but it performed well against
the overall Finnish market.
Retailing
In the Woodie's DIY, Home and Garden
business in Ireland, sales were slightly weaker in the second
quarter, but good margin management and cost control has delivered
an improvement in profitability over the same period last
year.
Manufacturing
In UK Manufacturing, CPI Mortars
continued to experience a decline in volumes in line with the fall
in house building activity. In StairBox, the weakness in the
RMI market resulted in lower volumes compared to the prior year but
good margin management and the beneficial impact of the acquisition
of TA Windows has contributed to an improvement in profitability
compared to the same period last year.
Segmental Trading
The table below shows the changes in
average daily like-for-like revenue and in total revenue for the
period from 1 January 2024 to 30 June 2024 compared to the same
period in the prior year.
Segment
|
Average Daily
Like-for-Like
Revenue
Change*
|
Total Revenue
Change
|
|
|
Constant
Currency
|
Actual
(Sterling)
|
|
|
|
|
|
Quarter 1
to
|
Quarter 2
to
|
Half Year
to
|
Half Year
to
|
Half Year
to
|
|
|
31 March
|
30 June
|
30 June
|
30 June
|
30 June
|
|
|
2024 v
2023
|
2024 v
2023
|
2024 v
2023
|
2024 v
2023
|
2024 v 2023
|
|
|
Distribution
|
|
|
|
|
|
|
|
-
UK
|
(7.3%)
|
(8.2%)
|
(7.7%)
|
(5.9%)
|
(5.9%)
|
|
|
-
Ireland
|
(0.2%)
|
1.1%
|
0.5%
|
2.2%
|
(0.3%)
|
|
|
-
Netherlands
|
(2.5%)
|
(2.9%)
|
(2.7%)
|
(2.7%)
|
(5.1%)
|
|
|
-
Finland
|
(8.9%)
|
(6.7%)
|
(7.7%)
|
(5.3%)
|
(7.6%)
|
|
|
Retailing
|
6.6%
|
(1.8%)
|
1.4%
|
2.0%
|
(0.4%)
|
|
|
Manufacturing
|
(21.9%)
|
(21.6%)
|
(21.8%)
|
(16.5%)
|
(16.7%)
|
|
|
Group
|
(4.2%)
|
(4.8%)
|
(4.5%)
|
(3.0%)
|
(4.4%)
|
|
|
*Constant
Currency
Ends
For further information please
contact:
Investors
|
Media
|
|
|
|
|
Grafton Group plc
|
+353 1 216 0600
|
Murrays
Pat Walsh
|
+353
1 498 0300
+353
(0) 87 226 9345
|
Eric Born
|
Chief Executive Officer
|
|
|
David Arnold
|
Chief Financial Officer
|
Buchanan
Helen Tarbet
Toto Berger
|
GraftonGroup@buchanancomms.co.uk
+44
(0) 7872 604 453
+44
(0) 7880 680 403
|
|
|
|
|
About Grafton
Grafton Group plc is an
international distributor of building materials to trade customers
and has leading regional or national positions in the distribution
markets in the UK, Ireland, the Netherlands and Finland. Grafton is
also the market leader in the DIY, Home and Garden retailing market
in Ireland and is the largest manufacturer of dry mortar and
bespoke timber staircases in the UK.
Grafton trades from circa 360
branches and has circa 9,000 colleagues. The Group's portfolio of
brands includes Selco Builders Warehouse, Leyland SDM, MacBlair, TG
Lynes, EuroMix and StairBox in the UK; Chadwicks and Woodie's in
Ireland; Isero and Polvo in the Netherlands; and IKH in
Finland.
For further information visit
www.graftonplc.com