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Grafton Group reports strong first half performance

Builders merchanting and DIY group Grafton has reported a strong performance in the first half of the year, with revenue, profit and earnings per share all rising on the back of improving trading conditions.

Grafton said group revenue for the six months to the end of June rose by 11 per cent to £1.01 billion. This compares to £912 million for the same period in 2013.

Underlying operating profit for the first-half of this year was up 62 per cent to £50.6 million, while profit after tax climbed 93 per cent from £18.6 million to £35.8 million.

Grafton CEO Gavin Slark said that the deal presents a “unique strategic opportunity” for Grafton to acquire a business with a leading position in the Brussels market.

The company said its UK merchanting business, which constituted 73 per cent of group revenue, performed strongly due to volume growth in the residential repair, maintenance and improvement market.

The merchanting business in Ireland reported a significant increase in revenue, which rose 5.6 per cent from £114.9 million in 2013 to £121.4 million in the first six months of this year. Operating profit advanced “very strongly” from £1.5 million to £5.6 million and the operating margin increased by 3.3 percentage points to 4.6 per cent.

Despite the pressure on disposable incomes, Grafton said there was a modest increase in revenue in the DIY business in Ireland supported by a rise in employment and consumer confidence.

“These results demonstrate further progress by the group, in particular, the milestone of a 5 per cent group operating margin, which is a key point in our journey from recovery to growth,” Grafton chief executive Gavin Slark said.

He added that the group remains committed to a growth strategy of organic initiatives and value adding acquisitions.

There was a reduction in net debt at 30 June 2014 by £32.6 million to £101.1 million.

Source : Irish Times
www.irishtimes.com/business/sectors/retail-and-services/grafton-group-reports-62-rise-in-operating-profit-1.1909420

27 August 2014

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