Grafton revenue rises despite weak domestic spending
BAD weather and the ongoing slump in consumer spending has hit consumer and trade spending on DIY and construction materials, and the trend is showing little sign of turning around.
That was the verdict from Grafton Group yesterday after the company reported higher revenues overall but continued struggles in this country.
In an interim management statement (IMS) covering the six months to the end of June, Grafton said turnover in the Irish merchanting business was down by about 9pc due to what it called a "further decline in spending on housing renovations, maintenance and improvement".
The firm added that average daily turnover in the overall business "declined by 13pc in January and February and at about 7.5pc between March and June in what "continues to be a challenging market".
"The impact on performance of lower turnover was mainly offset by cost reductions," Grafton added.
Grafton, which saw its brand Atlantic Homecare fall into examinership last month and now trades under the Heiton Buckley, Chadwicks and Woodies DIY brands, confirmed that sales in its Irish retail business were off 12.5pc year on year on the back of the poor weather -- which has now washed out the first half of the year for a number of companies -- and "weak consumer spending due to pressure on disposable incomes".
Overall, however, group revenue climbed 4pc so far this year to €1.05bn, mostly on the back of a strong sterling versus euro exchange rate.
Performance overall was "satisfactory in demanding market conditions", Grafton said, and H1 results will be in line with expectations.
Turnover at the firm's UK merchanting business added 1.4pc, and now accounts for nearly three-quarters of group turnover.
Davy Stockbrokers' Robert Gardiner described the IMS as "solid".
"Despite the weak top line, the group has delivered to expectations by carefully managing its cost base.
"With the result broadly as expected, we are unlikely to change full-year forecasts," he said.
Shares fell 1.4pc to €2.73 in Dublin.