Grafton's Irish retail business returns to profit after six years
Published 06/03/2014 | 02:30
GRAFTON Group's retail and builders' merchanting business in Ireland was back in profit for the first time in six years in 2013, according to chief executive Gavin Slark, pictured.
Speaking to the Irish Independent, Mr Slark said that the company – which in Ireland owns the Woodies DIY and Atlantic Homecare chains – remains poised to capitalise on an uplift in construction and consumer spending here.
Grafton Group yesterday reported a near 27pc rise in underlying operating profit to £77.2m (€93.8m) last year, while revenue climbed 8pc to £1.9bn (€2.3bn). The results were ahead of market expectations. Grafton's shares are listed in London and it reports its results in sterling. It generates close to 75pc of its revenue in the UK, where it has an extensive range of businesses.
"During 2013 we've seen some significant and some sustained profit improvement in Ireland for the first time in six or seven years," said Mr Slark.
Its merchanting business in Ireland posted revenue of £243m, up 6.7pc on the previous year and 1.9pc ahead on a constant currency basis. On a like-for-like basis, it was 3.6pc higher. Mr Slark said there had been an increase in business in the Dublin region, and that cities including Cork and Limerick were also seeing an improvement.
Grafton's retail arm in Ireland generated revenue of £167.9m last year, up 3.8pc on a reported basis. Operating profit, excluding a £900,000 property credit, was almost flat at £300,000.
Mr Slark said the company was refocusing its retail business here on DIY and gardening activities. He said some stores had a lot of self-assembly furniture and even fishing tackle for sale – a legacy of efforts to sustain sales amid the downturn.
Mr Slark said that while it was the right thing to do at the time, the DIY business would now focus on its core offering. The former head of the Curry's and PC World business in Ireland, Declan Ronayne, now heads the Grafton DIY business in Ireland.
The chief executive said Grafton remained interested in acquisitions and had gone "beyond tyre kicking" with a couple of potential targets. But he said Grafton "has to get the value right".
In the UK, Grafton's merchanting turnover rose 6.7pc last year to £1.39bn, while operating profit at the unit advanced almost 20pc to £75.9m.