Grafton Group plc, the international building materials distributor and DIY retailer, issues this trading update for the period from 1 January 2021 to 18 April 2021 in advance of its Annual General Meeting.
Group revenue in the period to 18 April 2021 was £846.8 million, an increase of 32.9% on the same period last year, which was impacted by the closure of branches, stores and manufacturing plants on 24 March 2020 in the UK and on 28 March 2020 in Ireland, except for essential services. Group revenue was up by 8.3% compared to the same period in 2019.
Despite the partial lockdown of the construction sector in Ireland, the overall Group had a good start to the year with revenue growth gaining good momentum in March and April.
Woodie’s in Ireland and Selco in the UK made the strongest gains, continuing the trend from the second half of last year. Strong demand and supply side constraints contributed to longer lead times, an increase in product price inflation and shortages of a number of key categories of building materials in the UK and Ireland.
The group now expects that adjusted operating profit for the current financial year will be 15 to 20% ahead of forecasts of £206 million for 2021. This is as a result of the stronger-than-anticipated growth in revenue in March and April, an improved first-half outlook for the overall Group, as the seasonally important trading months of May and June approach, and higher property profit.
Selco continued to perform strongly with average daily like-for-like revenue up 66% on the same period last year, and by 18.5% compared to the same period in 2019, reflecting a strong momentum in March and April. Investment in Selco continued with the recent opening of a new branch in Liverpool, which increased the branch network to 70.
Trading in the traditional merchanting business in Great Britain was softer in January and February due to the lockdown in the wider economy, but it benefitted from a solid recovery in residential RMI and new build activity in March and April. Average daily like-for-like revenue in this business was ahead of the same period in 2019 by 3.1%.
In Ireland, the Chadwicks branches remained open and operating at lower levels of activity to support those parts of the construction industry that were permitted to trade between 9 January 2021 and 12 April 2021, when a phased reopening of the sector was permitted, including new residential construction. Activity in the residential new build and RMI markets has been underpinned by strong underlying demand.
Mortar volumes recovered well in March and April, following softer trading conditions in January and February as house builders increased construction activity in response to good underlying demand for new houses.
StairBox, the staircase manufacturing business acquired on 30 November 2020, experienced very good demand for staircase solutions from trade customers in the residential RMI market, and used its innovative design and manufacturing technology to support record monthly levels of activity.
The statement records a cautiously optimistic outlook for the second half of the year, which is likely to be influenced by the pace of normalisation of consumer spending patterns.
Gavin Slark, Chief Executive Officer, commented: "Over a year has now passed since the first lockdown and I wish to again acknowledge the exceptional commitment of colleagues across the Group and to thank them for enabling our businesses to trade in a safe environment.
"We have made a very positive start to the year and are encouraged by the improving trends and momentum in trading in the period which we expect to continue through the remainder of the half year.
"Despite some ongoing uncertainty related to the pandemic, Grafton is well placed for continued progress in the current year supported by our market leading businesses and strong financial position."