REG - Grafton Group PLC - Trading Update

GraftonAnnouncement

02/05/2024 07:00

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RNS Number : 9069M  Grafton Group PLC  02 May 2024

Grafton Group plc

 

Trading Update

 

Grafton Group plc ("Grafton" or "the Group"), the international building
materials distributor and DIY retailer, issues this Trading Update for the
period from 1 January 2024 to 21 April 2024 ahead of the Annual General
Meeting ("AGM") of the Company that will be held today at 10.30am in the Irish
Management Institute (IMI) Conference Centre, Sandyford Road, Dublin 16, D16
X8C3, Ireland.

 

Shareholders can find guidance on attending the AGM virtually in the Notice of
2024 AGM which is located at
https://www.graftonplc.com/investors/shareholder-services/shareholder-meetings/
(https://www.graftonplc.com/investors/shareholder-services/shareholder-meetings/)

 

Trading and Performance

 

Group revenue in the period from 1 January 2024 to 21 April 2024 was £669.2
million, down 5.0 per cent from £704.3 million in the prior year and by 3.3
per cent in constant currency.   Softer trading in the seasonally less
important early months of the year was influenced by prevailing macroeconomic
conditions in the Group's individual markets and exceptionally wet weather in
Ireland and the UK which impacted demand.  Overall activity in the Group's
businesses remained subdued in the period with average daily like-for-like
revenue down by 4.5 per cent on the prior year.

 

In Ireland, Chadwicks encountered materials price deflation of circa 6.0 per
cent but continued to benefit from an improving trend in volumes and a
favorable macroeconomic backdrop.  The provision of housing remains a public
policy priority with Ireland's new Taoiseach raising the build target for new
homes over the next five years to 250,000 which compares to 32,700 new home
completions in 2023. Demand conditions in the UK RMI market remained weak with
materials price deflation of circa 3.5 per cent and adverse weather conditions
also contributing to the decline in revenue. In the Netherlands, lower revenue
from smaller customers and timber factories was largely offset by revenue
growth generated by large construction projects.  The slowdown in the Finnish
economy and construction sector continued to impact volumes in IKH.

 

The Woodie's DIY, Home and Garden business in Ireland had a positive start to
the year with revenue growth driven by an increase in both transaction numbers
and in average basket size.

 

In UK Manufacturing, as expected and previously flagged, CPI Mortars
experienced a sharp decline in volumes in line with the fall in house building
activity.  Volumes were also lower in StairBox as demand for bespoke
staircases declined in a weaker residential RMI market.

Segmental Trading

 

The table below shows changes in average daily like-for-like revenue and in
total revenue compared to the same period last year.

 

 Segment        Average Daily Like-for-Like Revenue  Total Revenue Change

                Change*
                Constant                                           Actual

                Currency                                           (Sterling)
                1 January                            1 January     1 January

                to 21 April                          to 21 April   to 21 April

                2024 v 2023                          2024 v 2023   2024 v 2023

 Merchanting
 - UK           (8.0%)                               (6.2%)        (6.2%)
 - Ireland      0.6%                                 2.5%          (0.6%)
 - Netherlands  (2.8%)                               (4.0%)        (6.9%)
 - Finland      (8.2%)                               (5.7%)        (8.5%)
 Retailing      3.2%                                 2.3%          (0.7%)
 Manufacturing  (21.7%)                              (17.0%)       (17.2%)
 Group          (4.5%)                               (3.3%)        (5.0%)

            *Constant currency

 

Share Buybacks

 

The fourth share buyback programme, launched on 31 August 2023, was extended
to 31 May 2024 and the maximum aggregate consideration increased from £50
million to £100 million.  This programme completed on 30 April 2024 and
involved the repurchase of 11.1 million ordinary shares at an average price of
£9.02 per share.

 

Additional cash of £343.3 million was returned to shareholders through share
buybacks completed between 9 May 2022 and 30 April 2024 reflecting the
repurchase of 40.27 million ordinary shares at an average price of £8.53 per
share. The number of shares bought back amounted to 16.8 per cent of the
shares in issue when the first buyback programme commenced on 9 May 2022.

 

Eric Born, Chief Executive Officer of Grafton Group plc commented:

 

"Trading in the period continued to be challenging in most of our markets and
revenue trends were also impacted by price deflation and exceptionally wet
weather in Ireland and the UK. Looking ahead, whilst we are not expecting a
sustained recovery in our markets in the short term, we do expect
profitability to be slightly more weighted than usual to the second half.

 

"We remain focused on being the providers of choice for our customers,
investing in our brands and maintaining tight control of costs.  We are
confident in the underlying demand fundamentals and the medium-term outlook
for our markets and on the opportunities provided by our cash generative
business and a healthy balance sheet."

 

 

Ends

 

For further information please contact:

 Investors                                   Media

 Grafton Group plc   +353 1 216 0600         Murrays        +353 1 498 0300

                                             Pat Walsh      +353 (0) 87 226 9345

 Eric Born          Chief Executive Officer
 David Arnold       Chief Financial Officer  Buchanan       GraftonGroup@buchanancomms.co.uk

                                             Helen Tarbet   +44 (0) 7872 604 453

                                             Toto Berger    +44 (0) 7880 680 403

 

About Grafton

 

Grafton Group plc is an international distributor of building materials to
trade customers and has leading regional or national positions in the
distribution markets in the UK, Ireland, the Netherlands and Finland. Grafton
is also the market leader in the DIY, Home and Garden retailing market in
Ireland and is the largest manufacturer of dry mortar and bespoke timber
staircases in the UK.

 

Grafton trades from circa 360 branches and has circa 9,000 colleagues. The
Group's portfolio of brands includes Selco Builders Warehouse, Leyland SDM,
MacBlair, TG Lynes, EuroMix and StairBox in the UK; Chadwicks and Woodie's in
Ireland; Isero and Polvo in the Netherlands; and IKH in Finland.

 

For further information visit www.graftonplc.com (http://www.graftonplc.com)

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