Grafton Group chief Slark hails DIY for boosting Irish growth
The bulk of Grafton Group's revenue here comes from home owners engaging in DIY CEO Gavin Slark has said.
However, spend on newly-built homes is "relatively small" for the group, which in Ireland owns the Woodies DIY chain as well as builders merchanting outlets Chadwicks and Heiton Buckley.
Speaking after the company's AGM yesterday, Mr Slark said the Irish market is "doing fine".
"The Irish market has seen an improvement, unemployment is very low, disposable income is still rising - from a builders' perspective and from a Woodie's perspective, the Irish market is doing very well for us," he said.
"The Irish consumers are feeling confident on spending money on their existing homes."
Yesterday the group reported a 6.4pc increase in like-for-like revenue to £962m (€1.1bn) in the four months to April 30.
The performance was helped by the "momentum" in the company's Irish and Dutch businesses.
In Ireland, revenue in Grafton's merchanting business increased 10.7pc year-on-year in the four months to April 30, while in the Netherlands, merchanting revenue increased by 8pc.
"The group had a positive start to the year and we should continue to benefit from the momentum in our Irish and Dutch businesses," Mr Slark said.
"Underlying demand in the UK RMI [repair, maintenance, and improvement] market remains relatively subdued and we continue to focus on realising the benefits from the investments we have made in recent years into our higher margin Selco and Leyland SDM businesses."
During the four-month period the group's retailing business reported a 12pc increase in revenue, while its manufacturing arm recorded a 7.3pc increase in revenue in constant currency.
On the subject of Brexit, which has impacted consumer confidence on both sides of the Irish Sea, the group has "moved through it", Mr Slark said.
In the UK market, the largest by turnover for Grafton, the underlying fundamentals are "still strong", he added.
"Bring British myself I am still reading about the angst in Ireland in terms of Brexit. I think, to be honest, we have almost moved through it. We are just carrying on running the business in the best way we can without really getting hung up on what's going to happen in terms of the macro.
"You have an older housing stock in the UK, so the repair, maintenance, and improvement market, the fundamentals are still strong there, and you still have an underlying undersupply of housing in the UK.
"Are there going to be a few speed bumps in the UK? Probably, absolutely, but do we see that as fundamentally changing the UK market? No, we don't."
The group said growth in total revenue in the first four months of 2019 was impacted by the disposal of two "non-core" UK merchanting businesses in the second half of 2018.
Looking at possible further acquisitions Mr Slark said the group would "not be constrained by geography".
"If it's the right business in the right market with the right scope for group, that is more fundamental than what country they are in."
Grafton, whose origins are in Ireland, reported revenue of £2.9bn last year, while the group's adjusted operating profit was £194.5m in 2018.
Shares in the group were up over 2pc in afternoon trading in London yesterday.