Grafton Group sees strong first-half trade as Covid restrictions relax

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Building materials group Grafton said the group’s revenue increased in the first half of the year as it saw stronger-than-expected trading.

In a business update, the group said revenue was £ 1.55bn (€ 1.81bn), up 46.5% from the £ 1.06bn. pounds sterling recorded in the first half of 2020, when Covid-19 restrictions closed branches, stores and manufacturing plants in the UK and Ireland. Compared to 2019, the group’s turnover increased by 18%.

The increased revenue growth from Grafton’s continuing operations emerged in March and April, and was led in May and June by DIY chain Woodie’s in Ireland and Selco in the UK, as good underlying demand in the home repair, maintenance and improvement and new housing markets contributed to the growth.

Although the average daily turnover of Chadwicks branches on a like-for-like basis declined by around 2% in the period up to mid-April compared to 2019, the gradual reopening of the Irish construction sector to the mid-April pushed activity to its highest level. activity since 2008. It ended the first half with an average daily turnover like-for-like up 11.7% compared to 2019.

The company’s retail arm, Woodie’s, experienced “exceptional” growth across all categories over the six-month period, remaining open as a core retailer. This growth rate moderated with the full reopening in May of non-essential retail stores.

In the UK, Selco reported like-for-like average daily revenue up 74.4% from the previous year and 18.4% from 2019 figures.

The group’s distribution activity in the Netherlands improved in March and continued to accelerate in the second quarter.

Grafton noted the pressure on supply chains caused by increasing international demand for building materials, limitations in manufacturing capacity, a shortage of some raw materials and problems with container shipping logistics.

During the six-month period, Grafton finalized the acquisition of Finnish IKH and announced that it would sell its traditional business activity in Britain for £ 520million.

“Grafton exceeded expectations in the first half of the year and, despite some lingering uncertainty caused by the pandemic and industry-wide supply chain pressures, the Group has increased its profit guidance for the current year. for continuing operations, supported by its market leading businesses and strong financial position, ”said Gavin Slark, Managing Director of Grafton Group.

Grafton expects the group’s adjusted operating profit for the year from continuing operations to be around £ 240 million after the divestiture of the UK business and the acquisition of IKH are taken into account

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