12th Nov 2020 10:29
(Alliance News) - Grafton Group PLC said Thursday its revenue and profit in the four months to the end of October have been ahead of expectations.
Shares in the midcap the building materials firm were 6.6% higher in London on Thursday morning at 839.00 pence each.
Like-for-like revenue was up by 6.3% and total revenue was up by 5.1% to GBP1.0 billion compared to GBP962.0 million in the same period the year before.
"There was a strong recovery in the period following the significant disruption to trading in the second quarter caused by the pandemic. Demand was strongest in the Woodie's DIY, Home and Garden business in Ireland and in the residential Repair, Maintenance & Improvement segment of the distribution markets in the UK, Ireland and the Netherlands," Grafton said.
It continued: "The group leveraged its well established trading positions in these markets and benefited from investments made in recent years in its higher margin businesses, including the accelerated rollout of its digital strategy."
Grafton also noted it benefitted from pent-up demand that developed during the lockdown and, in management's view, from households investing part of the savings from reduced spending on travel, leisure and hospitality in their homes.
"The increase in the number of people working from home due to the pandemic also contributed to higher demand in our stores and branches," Grafton added.
Revenue for the ten months to October 31 from continuing operations declined by 9.0% to GBP2.07 billion and by 9.3% in constant currency. Like-for-like revenue was down by 11% in the ten-months period.
Looking ahead, Grafton said it is on course to deliver a "strong performance" in the second half following a higher than expected level of operating profit for the four months to the end of October.
It is guiding for adjusted operating profit in the second half in the range of GBP130 million to GBP140 million, which is about 24% to 33% higher than the second half of 2019 and is significantly ahead of guidance given in August that adjusted operating profit in the second half would be at a similar level to the same period in 2019.
For 2019, Grafton recorded adjusted operating profit of GBP204.8 million.
"I am very grateful for the way that colleagues across the group have continued to respond to the ongoing pandemic and thank them sincerely for their dedication, commitment and hard work which has enabled our businesses to continue to trade and to support our customers in a safe environment," Chief Executive Gavin Slark said.
He continued: "Despite all the current uncertainties, we are very encouraged by the trading and financial performance of the Group over recent months. Grafton is in a very strong financial position and has a diversified portfolio of market leading businesses with exposure to residential RMI leaving it well placed to benefit from current market trends."
By Paul McGowan; [email protected]
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