Grafton Group PLC Trading Update (4553S)
09 Julio 2020 - 1:00AM
UK Regulatory
TIDMGFTU
RNS Number : 4553S
Grafton Group PLC
09 July 2020
Trading Update
9 July 2020
Grafton Group plc, the building materials distributor and DIY
retailer with operations in the UK, Ireland and the Netherlands, is
today providing a trading update for the six months to 30 June 2020
ahead of the release of its results for the half year on 27 August
2020.
Health and Safety
Our number one priority since reopening branches and stores has
been the health and safety of our colleagues and customers. We have
implemented procedures and protocols, in line with the guidance
provided by Governments and health authorities, to ensure that all
our locations have the highest health and safety safeguards in
place. We are pleased that these measures are working effectively
in practice. At the end of June, almost all trading locations
across the Group were open for business and the vast majority of
colleagues had returned to work.
Trading Performance
Group revenue in continuing operations for the six months to 30
June 2020 was GBP1.06 billion, down 19.4 per cent from GBP1.31
billion in the same period last year due to the impact on trading
of the Covid-19 pandemic.
Trading in the month of June was more resilient than anticipated
with Group revenue in continuing operations of GBP247.8 million.
This was 11.4 per cent ahead of June 2019 revenue of GBP222.4
million with the benefit of two additional trading days in the
distribution and manufacturing businesses and revenue from the
acquisition of Polvo in July 2019. Average daily like-for-like
revenue in June was down by 1.1 per cent on the prior year.
Strong demand in June in our businesses in Ireland and
Netherlands and in Selco in the UK was partly offset by a slower
pace of recovery in the traditional distribution and manufacturing
businesses in the UK.
While we were encouraged by the improved performance in June,
trading during the month is likely to have been influenced by
pent-up demand as Covid-19 restrictions were lifted and we remain
cautious about revenue trends in the second half of the year.
UK Distribution
June average daily like-for-like revenue in the UK distribution
business was circa 90 per cent of the prior year level. Selco
completed the reopening of all branches on a full self-select
service basis on 22 June 2020 having initially reopened for Click
& Collect and Click & Delivery only trading.
The traditional UK merchanting businesses expanded its
operations to a full in-service branch offering during the month of
June having initially operated pre-arranged branch collections and
on-site deliveries.
Irish Distribution
The Chadwicks branch estate, which fully reopened on 18 May
2020, experienced growth of 7.3 per cent in average daily
like-for-like revenue in June driven primarily by strong demand in
the repair, maintenance and improvement segment of the housing
market.
Netherlands Distribution
June trading in the Netherlands distribution business reflected
solid underlying demand as expected and an increase in scale due to
the Polvo acquisition.
Retailing
The Woodie's DIY, Home and Garden business in Ireland fully
reopened on 18 May to a surge in demand that continued at a
moderating pace establishing a new record for monthly revenue in
June due to exceptional sales of seasonal products.
Manufacturing
June average daily revenue in the UK mortar manufacturing
business was 70 per cent of the prior year level due to the slow
recovery in housing building activity and the reopening of the
plant in Scotland at the month end.
Liquidity
The Group was in a pre-IFRS 16 net cash position at the end of
June and had liquidity of GBP658 million held in accessible cash
deposits, bank balances and undrawn committed revolving bank
facilities.
In view of the Group's strong cash and liquidity position, debt
of GBP263 million that had been prudently drawn in April under the
committed revolving bank facilities and held in cash was
repaid.
Directors Remuneration
Director salaries, fees and pension arrangements which were
temporarily reduced in April in response to the impact of Covid-19
on the Group's business were restored with effect from 1 July 2020
following the successful reopening of the business in June. As
previously announced, the annual bonus scheme for 2020 has been
suspended.
Outlook
While we have made further progress in June following the
reopening of our businesses in the UK and Ireland in May, financial
guidance for the year ending 31 December 2020 will remain suspended
at this stage given the continuing uncertainty in our principal
markets.
Gavin Slark, Chief Executive Officer of Grafton Group plc
commented today:
" I would like to express our gratitude to all of our colleagues
for their continued commitment to the business and for providing a
safe environment for each other and our customers. 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.
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."
Ends
For further information please contact:
Grafton Group plc +353 1 216 0600
Gavin Slark Chief Executive Officer
David Arnold Chief Financial Officer
Murray +353 1 498 0300
Pat Walsh
MHP Communications +44 20 3128 8100
Tim Rowntree/Rachel Mann
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END
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