Grafton sees strong uplift in Irish business on recovery
Published 13/05/2015 | 02:30
Building materials firm Grafton Group expects to see a "steep rate of growth" in Ireland this year as the economy continues to recover, according to chief executive Gavin Slark.
Speaking following the company's annual general meeting in Dublin yesterday, Mr Slark said that Ireland is recovering "very strongly", but that the rate of residential construction here continues to remain low.
Grafton, which also owns chains including Woodies DIY and Atlantic Homecare, generates over 70pc of its sales in the UK, where it has an extensive network of builders merchants businesses. It also has a small presence in mainland Europe.
The company said that market conditions remained "broadly positive" in the first four months of the year.
It added that group revenue rose 6.7pc to £698m (€975.4m) in the first four months of the year, and by 9.6pc on a constant currency basis.
In Ireland, total revenue at its merchanting businesses rose 16.7pc on a constant currency basis during the first four months of the year. Residential repair, maintenance and improvement (RMI) was the main driver of activity in the sector, according to Grafton.
In the UK, total merchanting revenue was 9pc higher in the period.
At the Woodies DIY and Atlantic Homecare chains, revenue was up 3pc in the first four months on a constant currency basis.
Mr Slark said that residential construction projects continue to be small scale in Ireland, and largely concentrated around the Dublin region.
"I think if you move outside of Dublin, one of the sort of handicaps of the business at the moment is you've got the situation certainly across in the Midlands where it's still cheaper to buy a house than it is to build one, so we need to see those metrics change outside of Dublin to really see building being encouraged outside of Dublin, Cork and Galway," he said.
Mr Slark added that RMI is a "huge" part of Grafton's business in Ireland now, especially compared to 10 years ago during the boom.
"But I think if you look at the demand for housing in Ireland, we are expecting to see those new build numbers continually creep up," he said.
"Personally I think it'll still be a relatively slow growth in terms of those new houses being built start to finish, rather than seeing projects finished off that had been started maybe a few years ago."