4th Jan 2008 07:00
Grafton Group PLC04 January 2008 4 January 2008 Grafton Group plc Trading Update Grafton Group plc, the builders merchants and DIY Group with operations in theUK and Ireland, issues this pre-close period trading update for the year ended31 December 2007. The Final Results for 2007 will be announced on 10 March 2008. Turnover for the year exceeded €3.2 billion, an increase of 10 per cent on 2006. The Group expects to report growth in adjusted earnings per share in line withor a little below the consensus market forecast of 86 cent (2006: 78 cent). In Ireland, the economy performed well supported by sound demographic, jobcreation and income growth fundamentals although the pace of expansion softenedin the second half as growth returned to more sustainable long-term levels. TheIrish new housing market experienced a decline in activity and is currently in aperiod of transition to a more stable pricing and supply environment following aprolonged period of strong growth. The Irish Merchanting business encountered more challenging trading conditionsreporting a small decline in like-for-like sales in the second half. Thebusiness performed well against this background due to its significant exposureto the more stable RMI and non-residential markets. The Irish DIY businesscontinued to grow like for like turnover supported by increased consumerspending and strong brands. The UK economy performed strongly in 2007 although there are some signs thatgrowth slowed in the final quarter. The generally positive economic backgroundand strong market position enabled the first half improvement in like for likesales and operating margin in the UK business to continue. Increased interbank interest rates and the expiry of low fixed interest rateswaps have resulted in an increase in the full year interest charge for 2007. The Group had an active year on the development front with the completion offourteen acquisitions. The businesses acquired have annual sales of over €100million and trade from thirty two branches in the UK and one in Ireland. Theseacquisitions were completed at a total cost of €74 million. Organic developmentsduring 2007 included the opening of thirteen branches in the UK and three inIreland. The Interim Results announcement on 14 August 2007 noted that the strongfinancial position of the Group could accommodate a selective approach toearnings enhancing share buybacks while also continuing to grow the Groupthrough acquisitions and organic developments. Since then the Group has boughtback 10 million Grafton Group Units (c. 4.2 per cent) at a total cost of €67.1million. Looking ahead, the long term growth and stability of the UK economy place it ina strong position to cope with an expected slowdown and it should continue to bea market which presents sound growth and development opportunities in themerchanting sector. In Ireland, new residential construction is expected tocontinue to weaken in the first half. However, strength in the rental marketpoints to continuing good underlying demand which should lead to an improvementin housing starts. The residential RMI and non-residential construction marketsin Ireland are expected to be positive this year. Overall, the Group believesrecent market estimates of EPS for 2008 in the range of 73 cent to 76 cent to bereasonable. Conference Call Grafton will host an Analysts' conference call today at 8.00am GMT to discussthis announcement. The dial-in numbers are: Ireland: + 353 1 436 4265UK: + 44 208 817 9301US: +1 718 354 1226Other: +353 1 436 4265 A replay of the conference call will be available from 11.00am GMT. To accessthe recording, the dial in numbers are: Ireland: +353 1 436 4267UK: +44 207 7696425US: +1 630 6523111Other: +353 1 436 4267 The digital replay security code is: 1128697 # A copy of this statement is also available on our website www.graftonplc.com For further information please contact: Grafton Group plc + 353 1 216 0600Michael Chadwick, Executive ChairmanColm O Nuallain, Finance Director Murray Consultants + 353 1 498 0300Joe Murray Citigate Dewe Rogerson + 44 207 282 2945Ginny Pulbrook This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Grafton Group