Grafton builds up 13% increase in revenues for 2016
Builders’ merchant and DIY group Grafton recently announced a 13% increase in revenue for 2016 to just over £2.5 billion – a new high for the company. The company said its adjusted group operating profit for the year to the end of December rose by 12% to £142 million. Pre-tax profits for 2016 were up 14% to £136.2 million. A second interim dividend of 9 pence per share was approved to give a total dividend for the year of 13.75 pence. This is up 10% on the total dividend of 12.5 pence paid in 2015.
The group’s UK merchanting business finished out the year on a positive note following two quarters of weaker demand due to subdued activity in the UK housing market. Its Irish merchanting operations also put in a very strong performance in the year with double digit revenue growth for the third year in a row.
Grafton said that demand in the merchanting and DIY market should continue to be underpinned by gains in employment and increased disposable income. “The outlook for investment in the construction sector is favourable with forward looking indicators pointing to an increase in house building and non-residential construction,” it added.
The company’s chief executive Gavin Slark said that 2016 represented an overall strong financial performance despite challenging trading conditions in the traditional UK merchanting market. “While uncertainties remain about the UK economy, the recovery in the Irish and Netherlands markets is forecast to continue. The group’s very cash generative operations and strong balance sheet leave it well positioned to invest in areas where we see good opportunities for growth.”
Grafton said revenue growth in Ireland was mainly stimulated by strong demand in the residential RMI (Renovation Maintenance Improvement) market despite a decline in housing deals to 2% of the housing stock. The company also said that non-residential new build and RMI activity improved from a low base after a long time of under investment. It saw a pick-up in demand across most segments of the market including technology, energy, hotels, offices and agriculture.
Three new Chadwicks branches are due to open in Dublin in the first quarter of 2017, which will increase the network to 47, including 20 in the Dublin area. The Woodie’s DIY chain saw “significant profit growth” for the second year in a row on the back of a recovering retail market in Ireland.
