The Grafton Group, owner of Buildbase, Leyland and Selco, has released its financial statement for 2019.
The report shows that revenue in continuing operations went up by 3% (2.9% growth in constant currency) to £2.7 billion, while the operating profit in continuing operations was up 4% to £194.3 million on a pre-IFRS 16 basis.
Those positive results were mainly due to a buoyant market in merchanting and retailing in Ireland and increased profitability in the group's Netherlands business, as well as the acquisition of Polvo in July.
The merchanting business in Ireland saw volumes recover in November and the group’s Chadwicks business, that announced a €5 million rebranding in November, finished the year on a firmer note. The Woodie’s DIY, Home and Garden business in Ireland delivered a strong trading performance in the key fourth quarter and for the full year overall.
In the UK however, the group, which divested itself of Plumbase in October, wasn't immune to the general downturn in the sector, facing what it called "softer trading", particularly in the second half of the year.
In a trading update from mid-January 2020, the company explained the situation: "In the UK, households continued to be very cautious about discretionary spending as uncertainty persisted during the fourth quarter and sentiment continued to weigh on demand in the merchanting market. The weak markets of September and October continued into November and December but did not deteriorate further. The Group’s focus in the UK remains on tight control of costs, driving efficiency and delivering productivity gains."
Gavin Slark, Chief Executive Officer, commented: “2019 saw growth in revenue, profitability and earnings per share alongside continuing progress in evolving and re-shaping our businesses to enhance our value proposition to our customers and drive sustainable growth for our shareholders.
“Strong organic growth in our Merchanting and Retailing operations in Ireland and in the profitability of our Netherlands operations helped offset a challenging year in the UK due to political and economic uncertainty.
“The outlook for 2020 is of continuing but moderating growth in Ireland and the Netherlands and while reduced uncertainty may lead to some uplift in the UK RMI market, we remain cautious about the speed of any recovery. Given the strength of our brands we look forward to another year of progress for Grafton and with a strong balance sheet and rigorous financial discipline we are well placed to capitalise on growth opportunities.”