| 11.7°C Dublin

Grafton sees demand rise but shutters UK stores


Gavin Slark, Grafton CEO

Gavin Slark, Grafton CEO

Gavin Slark, Grafton CEO

Woodie's owner Grafton Group has reported "some evidence" of stronger demand in a number of its shops in Ireland, as people spend increasing amounts of time at home due to the coronavirus.

The company, whose brands include Chadwicks merchanting, is keeping all of its Irish shops open for the foreseeable future.

It has stepped up the hygiene levels in the shops and limited the number of customers that can enter at any time.

However, in the UK, the firm has closed its shops and manufacturing plants for the next three weeks.

Subject to clarity from the British government, a small number of branches will remain open to supply materials for essential repair and maintenance work to local authorities.

The Covid-19 outbreak will lead to a "material" decline in revenue and profitability over the coming months, the company said in a trading update yesterday.

It added that it was in a "very strong" financial position, with unrestricted cash of £303m (€330m) and undrawn committed revolving bank facilities of £275m.

No refinancing of debt is due until March 2023.

Gavin Slark, CEO of Grafton, said: "Grafton is in a strong financial position with excellent liquidity and I am confident that the group will emerge from this period of uncertainty in a position of strength."

Elsewhere, service station giant Applegreen said it expected a "material reduction" in profitability this year, as footfall and sales decline in its shops due to the virus.

On the back of this, it is deferring executive director bonuses, implementing a recruitment freeze and suspending its final dividend for 2019.

In addition, the company is opening negotiations with landlords on rental holidays in order to protect profitability and conserve cash, it said in a trading update.

The company is also deferring its development capital expenditure and availing of the newly introduced Government relief measures for businesses.

As well as Ireland, Applegreen has a presence in the UK and United States.

Currently, all of its stores remain open and its supply chain has remained fully operational.

The scale of the impact will be dependent on how the situation develops and over what time frame, as well as the impact of measures that are taken by the governments in the markets in which it operates.

Jason Molins, analyst at Goodbody Stockbrokers, said the update was "unsurprising" given the significant level of disruption currently being experienced.

Applegreen is due to release its 2019 results this Friday.

Irish Independent