Woodie’s owner Grafton Group sees revenues rise as it reaps benefits of diversification

Building materials distributor and DIY retailer Grafton Group has reported an increase in half-year revenue while maintaining its full-year earnings guidance.

The group, which owns the Woodie’s DIY chain, said revenue rose 3.2 per cent to £1.19 billion (€1.4 billion) between January and the end of June this year. Half-year revenue at its Irish stable of businesses rose 1 per cent, it said.

“Grafton continued to benefit from the geographic diversity of its markets with 60 per cent of revenue generated in Ireland, the Netherlands and Finland,” the company said.

Grafton said first-half volumes were lower in the distribution businesses in the Republic, the UK and Finland and broadly unchanged in the Netherlands.

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“This reflected the impact of the cost-of-living increases and rising interest rates,” it said, noting lower volumes and sharp falls in timber and steel prices also contributed to more competitive markets and margin pressure in the distribution businesses in Ireland and the UK.

[ Grafton Group maintains operating profit guidance ]

The company said its Chadwicks chain in Ireland saw lower demand for materials supplied for housing repairs, maintenance and improvement (RMI) projects and the construction of single homes.

In the UK, Selco continued to experience challenging trading conditions in the residential RMI market as households reduced investment in home improvements and discretionary spending on repairs and maintenance, it said.

The Woodie’s DIY, home and garden business in Ireland performed strongly, driven by good levels of demand for seasonal products in the second quarter.

In its latest update, the company noted it had launched a third share buyback worth £50 million in May, reflecting what it said was “confidence in the group’s trading prospects, strong balance sheet and cash-generative operations, while retaining significant capacity to invest in strategic growth opportunities”.

By the end of June, it said it had completed £22.8 million of the buyback programme.

[ Grafton Group completes €106m share buyback programme ]

“Grafton achieved a resilient first-half trading performance against the backdrop of challenging market conditions and a strong prior year comparator,” chief executive Eric Born said.

“We are maintaining our guidance for the year while mindful of the potential impact of the macroeconomic environment on trading. Our management teams’ focus in the second half will be on supporting customers in our market-leading businesses, tightly managing the cost base and responding quickly to evolving trading conditions,” he said.

“Grafton has a portfolio of high-quality cash-generative businesses operating in diverse markets that have attractive demand fundamentals,” he said.