10th May 2016 06:41
LONDON (Alliance News) - Builders' merchant and DIY company Grafton Group PLC said it has enjoyed a "broadly positive" start to the year across its end-markets, but noted uncertainty over the outcome of the UK referendum on European Union membership appears to be having a bearing on current activity levels.
The FTSE 250-listed company reported a broadly favourable economic environment in the UK, continuing growth momentum in Ireland, and improving conditions in the Netherlands, which it said has supported volume growth in its businesses.
Grafton said revenue in the four months to the end of April was GBP790.0 million, up 13% from GBP698.0 million for the same period a year earlier. In constant currency this was 12% higher than the same period a year earlier.
Within Grafton's Merchanting division, which provides 91% of group revenue, the UK business grew both organically and through acquisitions. Grafton said it saw good progress at its Selco company, with the 41st branch opened in March in Watford and further branch openings planned for later this year. Grafton said, however, the market softened in April following a good first quarter, which it said may reflect current market uncertainties about a possible Brexit.
The Irish business saw double-digit revenue growth during the period, of 17%, or 11% in constant currency, from the same period a year earlier. Increased spending on residential repair, maintenance and improvement projects continued to generate strong volume growth, Grafton said, and the early stage recovery in the house building, infrastructure and commercial property markets also contributed to the favourable trading conditions.
However, the Belgian business experienced difficult trading conditions, due to weak economic fundamentals and the terrorist attacks in March, which resulted in lower activity in the merchanting market. Revenue was down 9%, or 14% in constant currency, from the same period a year earlier.
The Manufacturing division saw strong growth from a year earlier, 17% higher, due to stronger activity in the new housing market boosting the mortar manufacturing business in the UK. The Retailing division benefited from increased consumer spending.
"We are positive about the prospects for the group and expect the recent trends in the group's markets in Ireland and the Netherlands to be sustained over the remainder of the year. Strong market fundamentals should support activity in the UK housing and repair, maintenance and improvement markets although uncertainty over the outcome of the referendum on continued membership of the EU appears to be having a bearing on current activity levels," said Grafton Chief Executive Gavin Slark.
By Hannah Boland; [email protected]; @Hannaheboland
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