Shares in Grafton Group plunge as much as 12pc after profit warning
Shares in Irish builders merchants Grafton Group plunged as much as 12pc after a profit warning on Thursday.
Shares in the London-listed, Irish-headquartered owner of businesses including Woodies, Heiton Buckleys and Chadwicks sank after the company said annual profits will miss expectations, blaming factors including the impact of Brexit uncertainty on the UK construction sector.
Grafton shares lost as much as 12pc, and its UK-listed peers including B&Q-owner Kingfisher all traded lower after the Irish group issued an unscheduled trading update to the market on Thursday, warning that that trading toward the end of the third quarter had been more difficult than anticipated.
READ MORE: Grafton Group sells UK plumbing firm
In the UK merchanting business like-for-like revenue was 0.8pc lower as households deferred discretionary spending against a backdrop of increased economic
While Irish growth remains strong in the merchanting business, the pace of expansion was less than forecast.
“Against the backdrop of softer third quarter trends which have continued into October, the Group currently expects to report full year operating profit for continuing operations in the range of 4pc to 8c lower than current consensus,” Grafton said.
That consensus forecast had been for profits of around £193.5m.
CEO Gavin Slark said the softer outlook reflected weaker market sentiment, rather than market fundamentals.
“Grafton remains well placed to continue to benefit from our strong market positions in Ireland and the Netherlands and from a recovery in the UK merchanting market,” he said.
With the UK still facing uncertainties linked to Brexit and amid a wider slowdown in global growth, a British construction slump deepened in September to contract at the fastest in around 10 years.
In the Netherlands a court ruling on environmental grounds has delayed the granting of permits for new construction projects.
Around 18,000 building projects in the Netherlands, worth billions of euro, risked being shelved after its highest court ruled in May that the way Dutch builders and farmers dealt with nitrogen emissions breached European law.