DUBLIN: Grafton Group, which owns Selco Builders Warehouse and Buildbase, has posted an increase in revenues to more than £1.2bn in its half-year results despite being hit by “progressively weaker trading” in the run up to the UK’s EU referendum. The company revealed revenues were up by 13 per cent to £1.23bn in the six months to the end of June 2016, with an increase in pre-tax profits to £62.8m, up from £57.9m in the same period last year.
It said growth in profitability was driven by exposure to the strengthening economies of Ireland and the Netherlands, along with development activity undertaken in the last two years. Grafton, which specialises in the merchanting, DIY retailing and mortar manufacturing, also posted net debt of £95.7m, £17.9m lower than its figure on 31 December 2015, resulting in a gearing of 9 per cent.
It said in the UK, performance contrasted between the continuing growth in profitability of Selco and the more challenging markets faced by its traditional UK merchanting businesses. The company added progressively weaker trading conditions were encountered during the period at a time of increased uncertainty in the lead up to the UK’s EU referendum. Chief executive Gavin Slark said: “Despite the more uncertain and competitive market conditions in the UK, Grafton continued to make good progress in its key markets enabling the group to record revenue, profit and earnings per share growth as well as strong cash generation.”
He added: “Both Ireland and the Netherlands continue to show strong growth with ongoing development opportunities. Grafton will continue to invest in areas of its business which combine good long term growth prospects and the opportunity to improve the group’s operating margin and return on capital employed.”
Average daily like-for-like revenue growth from 1 July to 21 August 2016 was 1.8 per cent for the group and the UK merchanting business posted marginally positive growth in average daily like-for-like revenue, while growth of 11.2 per cent in the Irish merchanting business was in line with the first half.
In addition, Grafton is continuing with its ongoing investment in its Selco store opening programme. New branches are set to open in Wolverhampton and Portsmouth in September.
