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Grafton Group PLC on Tuesday said it expects its half-year revenue to rise as its Ireland-based distribution business performed strongly, boosted by a construction boom.
In the first six months to June 30, revenue grew 12% to £1.15 billion from £1.03 billion a year ago, the Dublin-based DIY-retailer said. It added that its full-year operating profit expectation of around £270.4 million, up 0.4% from £269.2 million in 2021, remained unchanged.
Regarding daily like-for-like revenue in constant currency, Grafton's business in Ireland surged 20% while the Netherlands were up 7.5%, versus a year ago. However, UK-generated revenue fell by 0.2%. In the second quarter that ended June 30, business in the UK fell more sharply by 4%, while its Netherlands-based business rose 7.0% and Ireland was up 4.3% compared to a year ago.
‘Revenue normalised in the retailing business in Ireland as the exceptional gains during the Covid-19 lockdown reversed as anticipated and the UK Manufacturing business performed strongly,’ Grafton said. Regarding Ireland, it explained: ‘Strong demand was driven by increased spending on materials used in a wide range of housing repair maintenance & investment projects, an acceleration in the construction of scheme and one-off houses and an increase in non-residential private and public sector construction.’
Commenting on its business strategy, it added: ‘In line with 2021, well over half of the group's operating profit for the six months was generated outside of the UK reflecting the group's strategy of diversifying its earnings base geographically and divestment of the traditional merchanting business in Great Britain.’
Outgoing Chief Executive Officer Gavin Slark said the company is ‘in a very strong financial position’ with a resilient portfolio of high performing businesses.
The firm added it has so far bought back £43.8 million of its up to £100 million share buyback programme.
The company will release its half-year results on August 25.
Grafton shares fell 5.3% to 723.50 pence each in London on Tuesday morning.
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