Building materials distributor and DIY retailer is "in a strong financial position and, with a resilient portfolio of businesses"
Grafton Group plc, the building materials distributor and DIY retailer, is "in a strong financial position and, with a resilient portfolio of businesses, will emerge from this [Coronavirus] crisis well positioned for future growth."
Gavin Stark, Chief Executive Officer of Grafton Group plc, made the comments in a trading and liquidity update published today (Thursday 11 June) that showed revenue in continuing operations was down 26% to £810.9 million in the five months to 31 May 2020 from £1.09 billion in the same period last year due to the impact of the COVID-19 pandemic.
"I would like to thank our colleagues for their outstanding effort, commitment and success in seamlessly restarting our businesses with exceptional COVID-19 protocols in place to safeguard our customers and colleagues," he said.
"The restrictions introduced to contain the spread of COVID-19 had a significant effect on trading since the second half of March and while there are many challenges to be overcome in the months ahead, we are encouraged by the early trading indications following the reopening of our businesses in the UK and Ireland."
The trading statement revealed that the Group had a solid start to the year before experiencing a decline in activity in the second half of March resulting in an overall decline in Group revenue of two per cent in the first quarter compared to the same period last year.
The national shutdown measures remained in place throughout April in the UK and Ireland and had a material impact on trading leading to a decline in Group revenue of 80% in the month compared to April 2019.
The easing of trading restrictions during May permitted the majority of Group locations that were closed in March to either fully or partially reopen through the month.
Although Group revenue in May was down 38% on the prior year, this marked a significant recovery in activity and also reflected the high proportion of branches in the UK and Ireland that traded for only the latter part of the month.
The overall level of trading during the short period since reopening, while encouraging, was influenced by a range of factors including pent-up demand and may not be indicative of ongoing activity levels. The Group remains focused on appropriately managing its cost base as restrictions ease and trading returns to a more sustainable level.
The UK distribution business traded at approximately half the prior year level in May on an improving trend as the month progressed.
Selco reopened 42 branches initially on 6 May for Click & Collect and Click & Deliver trading only with the remaining 26 reopened on 18 May. In a gradual return to a more normalised operating environment, trading in the 42 branches that were initially reopened was extended to a full in-branch self-select service by the month end and the remainder of the branch estate will be fully operational by 22 June 2020.
The traditional UK merchanting businesses supported customers with branch collections and on-site deliveries of materials used mainly for outdoor residential RMI projects.
The return of house builders to construction sites and the re-starting of commercial projects has been slower and, as a consequence, this segment of the market has seen a more gradual increase in activity. Buildbase experienced an increase in on-line orders following an upgrade to its website during the lockdown.
Both Leyland SDM, the specialist decorators' merchant in London and TG Lynes, a distributor of commercial pipes and fittings in London, remained open and traded well during the lockdown.
In Ireland, the Chadwicks distribution branch network fully reopened on 18 May in the first phase of the Irish Government's roadmap for reopening the country and operated at two thirds of prior year revenue for the month.
