27th Feb 2020 09:51
(Alliance News) - Grafton Group PLC on Thursday increased its annual dividend despite a decline in profit and revenue.
For 2019, the building material distributor's pretax profit dropped by 1.0% to GBP172.6 million from GBP174.4 million in 2018. The figures from 2018 were restated following the classification of Plumbase and the Belgium Merchanting business as discontinued operations.
Plumbase was sold in October for GBP66.8 million, as was the Belgium Merchanting business for GBP11.0 million.
Total revenue for the period edged lower by 1% to GBP2.92 billion from GBP2.95 billion, largely driven by a decline from the discontinued Belgian business.
From continuing operations, however, revenue increased by 2.7% to GBP2.67 billion from GBP2.60 billion, as strong growth in Ireland and the Netherlands more than offset softer trading in UK merchanting, which was affected by a weaker economy.
Segmentally, Merchanting - which accounts for 89% of group revenue - rose by 2.6% to GBP2.39 billion, with daily like-for-like revenue up by 1.5%.
Meanwhile, the Retail division reported revenue growth of 3.7% to GBP205.5 million, due to higher customer transactions on increased demand.
Grafton declared a final dividend of 12.5 pence per share, taking the year's total to 19.0p, up 6% from 18.0p the year before.
"Strong organic growth in our Merchanting and Retailing operations in Ireland and in the profitability of our Netherlands operations helped offset a challenging year in the UK due to political and economic uncertainty," said Chief Executive Gavin Slark.
"The outlook for 2020 is of continuing but moderating growth in Ireland and the Netherlands and while reduced uncertainty may lead to some uplift in the UK Repair, Maintenance & Improvement market, we remain cautious about the speed of any recovery. Given the strength of our brands we look forward to another year of progress for Grafton and with a strong balance sheet and rigorous financial discipline we are well placed to capitalise on growth opportunities," Slark added.
Shares in Grafton were down 0.3% at 894.50 pence on Thursday in London.
By Dayo Laniyan; [email protected]
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