Woodies and Chadwick’s owner Grafton Group has seen profits decline nearly 21% during the first half of the year following “weaker market conditions” in other territories while its Irish operations performed well.
In its latest financial update, the company said it generated an operating profit of £83.1m (€98.7m) — down from £105.1m (€125.04m) during the same period in 2023. The company’s revenue stood at £1.14bn (€1.36bn) — down from £1.19bn (€1.42bn).
The cashflow generated from its operations was also down from £191.3m (€227.59m) to £161.1m (€191.6m). The company said that its Irish businesses — chiefly Woodies and Chadwicks — performed well and outlook for growth “remains positive”.
It said that product price deflation had a negative impact overall on sales in the Irish and UK distribution businesses, however, its adverse effect is moderating.
In contrast, volumes are lower across its operations in the UK, Netherlands and Finland. It also said its UK manufacturing business saw a “resilient performance” despite the backdrop of challenging UK housing market volume declines.
Chief executive officer of the Grafton Group, Eric Born, said the company’s performance during the first half of the year has been “robust” despite “challenging conditions in several of our markets”.
“We are pleased with the performance and outlook of our Irish businesses in particular, and we continue to drive efficiencies and innovations in our other markets to capitalise on what we see as significant positive operating leverage opportunities as these markets turn,” he said.
Mr Born added that while uncertainties remain in the short term, their medium-term outlook remains positive.
“Not least in the demand for new housing as markets normalise and consumer confidence improves. At this point in the year, with the important autumn trading season yet to come, we continue to anticipate delivering adjusted operating profit for 2024 in line with analysts’ expectations,” he said.
The company distributed £104.8m (€124.68m) to shareholders in dividend payments and share buybacks between January and June.
“The group has continued to be highly cash generative through a challenging period in the cycle, which has enabled us to return cash to shareholders whilst preserving a strong balance sheet to invest in organic and inorganic development opportunities,” Mr Born said.