Builders’ merchanting and DIY supplier Grafton Group has released its trading report for the year so far, revealing the Beast from the East and Storm Emma gave its trading a battering but its forecast for the year remains strong.
Grafton Group’s report covers the period 1 January 2018 to 30 April 2018, and showed that a positive start to the year in January and February was followed by a difficult March and start to April due to harsh weather conditions and unseasonably low temperatures. This significantly affected the Group’s markets and reduced the rate of growth in average daily like-for-like revenue to 1.3% for the period. Group revenue increased by 7% to £907 million in the four months and by 6.2% in constant currency – which calculates revenue without including fluctuating exchange rates.
Merchanting, which accounts for 91% of Group revenue, reported weaker conditions in the UK. There was a small decline in Selco due to the transfer of revenue from established branches to newer ones, as the company has opened 12 new branches and will open another three before the end of July. Selco’s growth strategy remained on track and delivered double digit figures, while Grafton Group’s recent acquisition Leyland has been trading in line with expectations.
The Irish merchanting trade was strong, due to good momentum in recovering residential and non-residential Repair Maintenance Improvement (RMI).
The Netherlands merchanting business also performed strongly against the backdrop of a growing Dutch economy and construction sector.
Belgium reported slightly more disappointing sales in merchanting despite a strong January and February, as there was less new build construction in March and April.
As for retailing, which accounts for 6% of Group revenue, Ireland reported successful figures due to a positive market along with store upgrades and extended product ranges in Woodies, which sells DIY supplies.
In manufacturing, which accounts for 3% of Group revenue, growth has been maintained at 15.1% due to a high consumer demand for mortar business CPI EuroMix in the new housing market.
The overall outlook for the Group is positive and its expectation for the full year remains unchanged despite the weaker trading in March and April.
Chief Executive Officer of Grafton Group, Gavin Slark, said: "We should continue to benefit from exposure to strong growth markets in Ireland and the Netherlands and, consistent with our view coming into the year, expect underlying demand in the UK RMI market to remain subdued but house building to perform strongly."