Sales up for first time in six years at builders' merchants
Woodies DIY and Atlantic Homecare owner Grafton Group said sales at its builders' merchants arm in Ireland grew this year for the first time since 2007.
In an interim management statement, Grafton said that average daily like-for-like revenue at its merchanting business here – which includes Chadwicks and Heiton Buckley – rose 1pc in the first six months of 2013. It said the business had made competitive gains and grew revenue from its plumbing and heating branch implants and from repair, maintenance and improvement products.
Group revenue rose 1.5pc in the period to €1.07bn even as Grafton took a €26m hit due to sterling weakness against the euro.
Grafton generates about three-quarters of its revenue and profits in the UK. This week it announced that it was pulling a planned sterling bond offer because interest rate volatility and market uncertainty had influenced investor sentiment and demand.
It added that trading in the first half had been adversely impacted by poor weather in the first quarter, but that there had been a recovery in activity levels in the second quarter.
The group, headed by chief executive Gavin Slark, said that its UK merchanting business experienced stronger demand in May and June, with like-for-like revenue 1.7pc ahead in the first six months compared with the first half of 2013.
At its DIY outlets in Ireland, Grafton said that revenue was flat for the half year, having fallen in the first four months.
"The fall in revenue in four months to the end of April, due principally to record low temperatures that delayed the start of the outdoor season, was fully recovered in May and June against the backdrop of a generally weak retail market," said Grafton.
Davy Stockbrokers analyst Flor O'Donoghue described the improvement in May and June as a "particular surprise".
Shares in the group fell 2.7pc by early afternoon despite what was considered to be a solid performance by the company in the first half.
Grafton said it expects half- year operating profit to be in line with market expectations.