Confidence in UK market boosts Grafton
CONFIDENCE in the UK housing market is "slowly but surely returning" as a raft of government measures to spur the sector kick in, according to Grafton chief executive Gavin Slark.
Mr Slark (pictured right) was commenting as Grafton issued an interim management statement that showed the improving state of the British economy is beginning to filter down to the business.
Revenue at the group totalled £1.6bn (€1.9bn) in the 10 months to the end of October, compared with £1.49bn in the first 10 months of 2012.
Its UK merchanting business accounts for 74pc of group revenue. Grafton operates chains of businesses across the UK. It said that average daily like-for-like revenue growth at the UK merchanting arm in the four months to the end of October was 4.1pc. That compared with a 0.6pc decline in the first quarter of 2013 and a 4.2pc rise in the second quarter.
The company said that it had generated increased like-for-like volume sales in the UK, supported by more favourable trading conditions as the economic recovery there became more established and the RMI (repair, maintenance and improvement) markets started to recover.
In Ireland, Grafton's merchanting business stabilised in the first half of 2013 after five years of volume declines as the housing market tanked.
"There were indications in recent months of a recovery in some regional markets led by improved demand in the greater Dublin area, Cork and the Mid-West region," it said.
Average daily like-for-like revenue growth at the Irish merchanting arm rose 2.4pc in the first quarter, dipped 0.6pc in the second quarter and was up 5.6pc in the four months to the end of October. Grafton also owns the Woodie's DIY and Atlantic Homecare chains in Ireland. The businesses account for 9pc of group revenue.
"Spending in the Woodie's DIY businesses, which benefitted from strong demand for seasonal products during the summer, showed more modest growth in recent months," noted the group.
Average daily like-for-like revenue, growth at the retail arm slumped 12.3pc in the first quarter but rose 8.5pc in the second quarter. In the four months to the end of October, it was down 1.7pc.
Grafton, which said it is on course to deliver full-year operating profits in line with expectations, moved its listing to London from Dublin last month and now reports its financial figures in sterling.