9th May 2014 07:51
LONDON (Alliance News) - Builders merchants and DIY company Grafton Group PLC Friday said it is continuing to see recovery in its markets which started in the second half of 2013, with group revenue up 14% in the first four months of 2014.
The company, like peers, was hit hard by the economic downturn, but 2013 marked the start of a recovery as the UK housing market picked up and economic conditions improved.
The owner of brands including Selco, Buildbase and Plumbworld last October completed a move to the London market from Dublin in a bid to stimulate more international investor interest and entered the FTSE 250 in December. It said revenues rose to GBP654 million in the period to April 30, from GBP576 million in the same 2013 period.
The company has three main divisions - merchanting, retailing and manufacturing.
The UK Merchanting business, which accounts for three quarters of group revenue, recovered from a setback to trading in the first four months of 2013 due to wet weather, Grafton said. The division benefited from growth in the housing repair, maintenance and improvement market that was driven by increased housing transactions and a recovery in the new-build housing market.
The UK Merchanting business reported a 13% increase in revenue during the period compared with 2013, while the Irish Merchanting business saw growth of 3% on 2013. The Belgium Merchanting arm, boosted by the acquisition Binje Ackermans SA, a six-branch builders merchanting business, saw revenue rise 67% during the period compared with 2013.
The company's Irish DIY retail business started 2014 positively due to stronger demand for seasonal products relative to the same period in 2013.
"Despite the sustained improvement in consumer sentiment, the recovery in core Irish retail sales has been modest due to continuing pressure on disposable incomes," the firm said of the Irish retailing arm.
Grafton said the management team is focusing on improving the customer experience and operational delivery in what is likely to be a "transitional year" for its retail activities.
The mortar manufacturing business in Britain, which mainly supplies the residential new build market, benefited from a strong increase in housing demand and housing starts supported by the recovery in the economy and increased mortgage lending.
"We have had a positive start to the year against weak comparables from 2013," Chief Executive Gavin Slark said in a statement.
"We are encouraged by the economic recovery and the continuing improvement in our principal markets and we look forward to building on the progress to date through volume growth in our markets, internal initiatives and an ongoing focus on efficiencies," he added.
The stock was trading at 624.50 pence Friday, up 12.50 pence or 2.0%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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