8th Mar 2016 11:18
LONDON (Alliance News) - Grafton Group PLC on Tuesday said it has weathered "a number of political hurdles over the last couple of years" and it should be able to do the same with the upcoming Brexit referendum, after the builders' merchant posted pretax profit and revenue growth in 2015.
The FTSE 250-listed builders' merchant and DIY group said pretax profit rose to GBP120.3 million in the year to the end of December, up 19% from the GBP101.2 million posted a year earlier, as revenue grew to GBP2.21 billion from GBP2.08 billion.
"Perhaps the most pleasing thing about the results is that the growth is across the whole group," Slark told Alliance News on Tuesday morning. "The final quarter of 2015 was a little weaker in terms of growth, but the first eight weeks of 2016 have been very positive."
January and February average daily like-for-like revenue increased by 5.8% in the UK merchanting business, 12% in Irish merchanting business and 1.5% in the Belgian merchanting business.
Grafton cautioned consumer confidence and demand may be hit by the upcoming UK referendum on the country's European Union membership. Slark, however, noted the business has weathered a number of "political hurdles" recently, including the UK and Irish elections and the Scottish referendum.
"Even if the UK does vote to leave, there's still a two-year negotiation period. We'll focus on the business until the vote and, after that, we'll look at ways to adapt the business," Slark said.
Grafton said the UK merchanting business continued to perform well in terms of revenue and profit, while its Selco builders' warehouse business performed particularly well. The Irish merchanting business performed very well, driven by improving economic and construction trends, while the DIY business also saw an encouraging performance.
The year also saw Grafton's entrance into the Netherlands market, after it acquired tools and fixings distributor Isero BV in November.
Slark told Alliance News Grafton will seek to expand further into the European market and has a number of options it is looking into, but said Grafton would be first focusing on growing and developing its businesses in the Netherlands and Belgium.
Belgium, Slark noted, has "proved a difficult market". Revenue in its Belgium merchanting business was down by 9.6% for the year, with like-for-like sales declines exacerbated by a weak euro and competitive pressure on margins in its YouBuild merchanting business. 2016, Grafton said, will be focused on improving margins in the YouBuild business.
Grafton said in its results it will pay a final dividend of 8.0 pence per share, up from 7.0p a year earlier, taking its total dividend payout up to 12.50p from 10.75p.
Shares in Grafton were up 0.3% at 674.00 pence on Monday.
By Sam Unsted; [email protected]; @SamUAtAlliance. Updated by Hannah Boland; [email protected]; @Hannaheboland
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