Grafton meets expectations in good builders suppliers market

Grafton has been trading in line with expectations and is confident of achieving further growth over coming months, shareholders heard yesterday.

Michael Chadwick, executive chairman of the builders suppliers chain, said that the company continued to see "high single-digit like-for-like growth" in Irish merchanting. While the merchanting market has been "favourable and buoyant", however, Mr Chadwick was a touch more cautious on Irish DIY trading.

This sector is "increasingly competitive", he said in an address to the Grafton agm in Dublin. DIY sales were "in line" with the same period of 2004 on a like-for-like basis, he said.

This comparison does not take into account new DIY stores opened by the group over the past year. On an overall basis, Grafton is seeing "very good growth" on the DIY side, Mr Chadwick said.

In the UK, where Grafton has about 10 per cent of the merchanting market, like-for-like sales were ahead by "modest" single digits in the first four months. Mr Chadwick said that UK consumer spending has shown signs of slowing, but he indicated that Grafton's sales are holding up. The company's UK mortar business also recorded single-digit sales growth at the start of the year. The meeting also heard that Grafton is well-placed to consider acquisitions but, in response to a shareholder question, Mr Chadwick said there were no plans to make another purchase the size of Heiton.

Grafton acquired Heiton for almost €400 million at the start of this year and is currently working to draw cost savings from the marriage of the two businesses.

Grafton has also added five smaller bolt-on acquisitions since the start of the year and has opened six greenfield branches.

Speaking after the meeting, Mr Chadwick rejected the notion that he might consider separating his dual role of chairman and chief executive.

"The board believes that the current structure is the best one for the company at this time," he said, noting that he had "certain responsibility" for Grafton's achievements to date.

Shares in Grafton fell by 25 cent to €8.60 last night.