Grafton remains upbeat as bad weather hits its revenue growth
Shares in builders' merchanting group Grafton tumbled more than 4pc in early trading yesterday after it experienced weaker trading in March due to adverse weather and unseasonably low temperatures.
That cut the growth rate in its average, daily, like-for-like revenue to 1.3pc. But it left its full-year forecasts unchanged and group revenue was still 7pc higher at £907m (€1.03bn) in the first four months of the year. Revenue was 6.2pc higher on a constant currency basis.
Chief executive Gavin Slark said the group should continue to benefit from buoyant economies in Ireland and the Netherlands.
"We should continue to benefit from exposure to strong growth markets in Ireland and the Netherlands and, consistent with our view coming into the year, expect underlying demand in the UK RMI (repair, maintenance and improvement) market to remain subdued but house building to perform strongly," he said.
Grafton, which held its annual general meeting yesterday, said that average, daily like-for-like revenue growth at its Irish builders merchanting business was 4.6pc on a constant currency basis for the first four months of the year. At its Woodies DIY chain, the figure was 4.7pc.
Revenue at its Irish merchanting business was up 7.6pc in the first four months on a constant currency basis. Revenue at Woodies was also up 4.7pc. Woodies accounts for just 6pc of Grafton's overall revenue.
A strong start to the year at Woodies was the result of an improved economy, store upgrades and new and extended product ranges, according to Grafton. Demand for outdoor seasonal products at Woodies fell sharply in March but recovered in April.
In the UK, Grafton said it had anticipated the softer underlying activity in the first four months of 2018 in its merchanting business there, with competition denting pricing.
It said that its Selco chain of builders providers notched up a double-digit percentage rise in revenue in the period, after it opened 12 branches last year and four in the first four months of this year. But like-for-like revenue at the chain dipped.
Grafton blamed it on the transfer of revenue from some established branches with spare capacity, to new branches.