REG - Grafton Group PLC - Trading Update

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RNS Number : 7767H  Grafton Group PLC  08 May 2025

Grafton Group plc

Trading Update

Trading in line with expectations

 

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 2025 to 27 April 2025 ("the period") ahead of the Annual
General Meeting ("AGM") of the Company that will be held today at 10.30 am in
the Irish Management Institute (IMI) Conference Centre, Sandyford Road, Dublin
16, D16 X8C3, Ireland.

 

Trading and Performance

 

Group revenue in the period was £773.1 million (2024: £717.3 million), up
7.8 per cent from the prior year and up 9.0 per cent in constant currency.
Group revenue benefited from the acquisition of Salvador Escoda, a leading
distributor of heating, ventilation, air conditioning, water and renewable
products in Spain, which completed on 30 October 2024. All our businesses had
two fewer trading days compared to the same period in the prior year, except
for Spain and Finland, which had three fewer trading days.

 

Group average daily like-for-like revenue for the period was 2.7 per cent
higher than in the same period last year. Total Group revenue in constant
currency rose by 9.0 per cent, reflecting 8.5 per cent contribution from
Salvador Escoda, 0.2 per cent from growth through new branches and a combined
-2.4 per cent impact from working days and foreign exchange.

 

Trading over the last two months has been supported by improving trading
conditions in certain parts of the Group and favourable weather conditions,
which have more than offset the weather impacted trading conditions
experienced in January and February (Group like-for-like revenue February YTD:
-0.1 per cent).

 

The following table shows the change in average daily like-for-like revenue
compared to the same period in the prior year.

 

 Segment                 Average Daily Like-for-Like Revenue Change

                         in Constant Currency
                         1 January to

                         27 April

                         2025 v 2024
 Distribution
      - Ireland          3.5%
      - UK               (0.3%)
      - Netherlands      2.9%
      - Finland          (0.8%)
 Retailing               10.0%
 Manufacturing           6.5%
 Group                   2.7%

 

Distribution

In Ireland, Chadwicks delivered like-for-like revenue growth of 3.5 per cent
in the period as trading activity recovered strongly from the impact of Storm
Éowyn.  The outlook for growth in construction remains positive with strong
support and policy continuity from the new Government to increase housing
completions and infrastructure investment. Ireland's construction PMI rose to
53.9 in March 2025 representing its highest level for three years. We remain
cognisant of the potential risks arising from the imposition of US tariffs on
the broader Irish economy and future investment decisions.

 

Average daily like-for-like revenue in the UK declined by 0.3 per cent in the
period as business improved, with modest product price inflation of 1-2 per
cent, following a slow start to the year.  RMI demand continues to remain
subdued, especially in the Greater London area, however the medium term
fundamentals remain positive supported by the UK Government's plans to
significantly increase new housing activity.

 

In the Netherlands, average daily like-for-like revenue grew by 2.9 per cent
in the period due to strong demand from key accounts and growth in access
control related projects.   Growth in activity has moderated more recently
as a result of delays in the commencement of some larger construction
projects.

 

In Finland, IKH's average daily like-for-like revenue declined by 0.8 per cent
in the period as mild weather conditions reduced sales of seasonal products
which was partially offset by strong growth in export sales to Estonia.

 

In Spain, the integration of Salvador Escoda continues to progress well.  On
a pro-forma basis, average daily like-for-like revenue in the period was up
6.8 per cent, supported by the timing of strong project related sales and
favourable market conditions.

 

Retailing

 

Woodie's DIY, Home and Garden business in Ireland had a very strong start to
the year with average daily like-for-like revenue up 10.0 per cent in the
period helped by growth in both the number of transactions and average
transaction values.

 

Well set-up and merchandised stores and favourable weather conditions,
combined with strong consumer spending in Ireland, resulted in excellent
growth across the business with a particularly strong performance in plants
and garden related products.

 

Manufacturing

 

In Manufacturing, average daily like-for-like revenue was 6.5 per cent higher
compared with the same period last year.

 

CPI EuroMix reported strong sales growth in the period supported by increased
volumes from its housebuilding customers on existing sites.  We are
encouraged by the UK Government's commitment to increase housing supply as the
broader recovery in this sector will be dependent upon a higher number of
active housing developments.

 

StairBox had good sales growth in the period although demand in the RMI market
in the UK remains subdued.

 

Outlook

 

Performance in the period has been in line with our expectations and, whilst
the more material trading period lies ahead, we remain on track to meet full
year expectations.

Notwithstanding the potential impact of US tariffs and any associated economic
uncertainty, the medium term fundamentals remain positive for Grafton, with
housing shortages across all our geographies and an expected recovery in RMI
demand after several consecutive years of low levels of investment by
households. The Group's balance sheet remains strong with Grafton well
positioned to support future development activities as opportunities arise.

 

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

 

"After a relatively subdued start to the year, and with the more material
trading period lying ahead, we were pleased that our performance in the period
was in line with our expectations, and we remain on track for the full year.
We are focused on what we can influence within our businesses rather than
being unduly distracted by the uncertainties around us.  We continue to
prioritise meeting our customers' needs and expectations and strive to operate
as efficiently as possible.

 

"Our platform acquisition of Salvador Escoda in Spain towards the end of last
year is an exciting foothold into a fragmented and growing market.  We
continue to actively evaluate opportunities in all our markets to strengthen
our position both organically and, where appropriate, by acquisition using the
strength of our free cash flow conversion and balance sheet."

 

 

Note for analysts

 

Grafton compiled consensus Analysts' forecasts for 2025 show adjusted
operating profit(1) of circa £185.9 million.

( )

( )

(1) Adjusted operating profit is defined as profit before amortisation of
intangible assets arising on acquisitions, acquisition related items,
exceptional items, net finance expense and income tax expense.

( )

 

Ends

 

 

For further information please contact:

 Investors                                   Media

 Grafton Group plc  +353 1 216 0600          Murray          pwalsh@murraygroup.ie (mailto:pwalsh@murraygroup.ie)

 Eric Born          Chief Executive Officer  Pat Walsh       +353 1 498 0300/+353 87 226 9345
 David Arnold       Chief Financial Officer
                                             Burson          GraftonGroup@buchanancomms.co.uk

                                             Buchanan

                                             Helen Tarbet    +44 (0) 7872 604 453

                                             Simon Compton   +44 (0) 7979 497 324

                                             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, Finland and Spain.
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 c. 470 branches and has c. 10,000 colleagues. The Group's
portfolio of brands includes Selco Builders Warehouse, Leyland SDM, MacBlair,
TG Lynes, CPI EuroMix and StairBox in the UK; Chadwicks and Woodie's in
Ireland; Isero and Polvo in the Netherlands; Salvador Escoda in Spain and IKH
in Finland.

 

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

Forward-looking statements

This press release may include forward-looking statements. These
forward-looking statements can be identified by the use of forward-looking
terminology, including the terms "outlook," "believe(s),"expect(s),"
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forward-looking statements include all matters that are not historical facts
and include statements regarding Grafton's or its affiliates' intentions,
beliefs or current expectations concerning, among other things, Grafton's or
its affiliates' results of operations, financial condition, liquidity,
prospects, growth, strategies and the industries in which they operate. By
their nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that may or may not
occur in the future. Readers are cautioned that forward-looking statements are
not guarantees of future performance and that Grafton's or its affiliates'
actual results of operations, financial condition and liquidity, and the
development of the industries in which they operate may differ materially from
those made in or suggested by the forward-looking statements contained in this
press release. In addition, even if Grafton's or its affiliates' results of
operations, financial condition and liquidity, and the development of the
industries in which they operate are consistent with the forward-looking
statements contained in this press release, those results or developments may
not be indicative of results or developments in subsequent periods. The
directors do not undertake any obligation to update or revise any
forward-looking statements, whether because of new information, future
developments or otherwise.

 

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