Revenues at Woodies-owner Grafton declines but DIY retailer forecasts profitability for the year
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Woodies-owner Grafton posted a decline in revenue partly driven by a fall in housebuilding activity in the UK and weaker Irish retail sales in the last three months.
In a trading update, the building materials distributor and DIY retailer said revenues declined 4.4% to £1.14bn (€1.34bn) in the first half of the year compared to £1.19bn in the same period a year earlier.
New build markets “remain more challenging” for the company which said it will need to monitor its cost base in response to market conditions.
The company said UK customers continue to remain cautious with discretionary spending “which has resulted in lower investment on home improvements, although there are positive signs emerging of improving consumer confidence.”
Eric Born, Grafton chief executive said he is “pleased” with the company's operations in Ireland despite slightly weaker Woodies sales in the quarter ending in June.
In a statement the company said it expects improved profitability at Woodies stores this year through “cost control”, while the company’s Chadwicks stores experienced a 5.4% volume growth.
Grafton indicated its Irish business has been boosted by pressure on the Government to address the housing crisis. As a general election looms closer, the Government increased the development of new homes resulting in commencements strongly ahead this year.
“The outlook for growth in construction in Ireland remains positive and the deflationary pressures seen in steel and timber have continued to moderate with overall price deflation of circa 4.9 per cent in the first six months,” the company said.
The company was optimistic on its outlook however and forecasted profitability to be “slightly more weighted” in the second half of the year.