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Grafton Group reports a rise in revenues

Builders merchanting and DIY group Grafton said revenues rose in the four months to the end of October up as trading conditions continued to improve in the UK and Ireland.

Total sales for the period were 21 per cent year on year to €528 million, driven by a 4.1 per cent rise in UK merchanting, which makes up the bulk of Grafton’s revenues, and a 5.6 per cent lift in the Irish merchanting business. Over the 10 months to October 31st, revenue totalled £1.6 billion (€1.9 billion), representing a 7.4 per cent rise from the £1.49 billion recorded in 2012.

The UK merchanting business was driven by more favourable economic conditions over the four months to the end of October, leading to an improvement in the new housing and repair, maintenance and improvement markets. The opening of two Selco branches also helped lift volumes in the period.

Meanwhile, the Irish merchanting business benefitted from the signs of stabilisation in the market, with recovery in regional markets and improved demand in the greater Dublin area, Cork and the Mid-West region. The business showed a 5.6 per cent rise in revenue for the four-month period.

The Woodies DIY owner said sales were up 4.1 per cent in the Irish retail sector, but down 1.7 per cent over the 10 months to the end of October. Consumers were still cautious, Grafton said, but the recovery in the Irish economy had led to improved sentiment. This was slightly offset by the closure of two stores last year, contributing to a decline in total revenue.

Grafton’s manufacturing business, which accounts for about 2 per cent of group revenues, rose by 25.5 per cent in the four months to October.

The group said it is on track to meet expectations for its full-year operating profit.

“The housing market in the UK is benefiting from government-backed initiatives and confidence is slowly but surely returning,” chief executive Gavin Slark said. “This should have a positive, though lagged, effect on Grafton as housing transactions and household spending on RMI increases. In Ireland, consumer confidence has improved and the merchanting and DIY markets have stabilised at very low levels of activity.”

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Source : Ciara O'Brien - The Irish Times

07 November 2013
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