Interim Management Statement

RNS Number : 8963W

Grafton Group PLC

13 November 2014

 



Grafton Group plc

Interim Management Statement

13 November 2014

Grafton Group plc, the builders merchanting and DIY Group with operations in the UK, Ireland and Belgium, issues the following Interim Management Statement for the period from 1 July 2014 to 31 October 2014.

Group Revenue

Trading conditions for the overall Group remained favourable in the four months to the end of October supported by increased demand in the residential repair, maintenance and improvement (RMI) markets in the UK and Ireland.  The pace of growth moderated somewhat as anticipated in the four months following strong growth in the first half.   Revenue for the ten months to 31 October 2014 was £1.76 billion, an increase of 10.1 per cent on revenue of £1.60 billion in the same period last year.

The table below shows the change in average daily like-for-like revenue by segment and the change in total revenue by segment compared with the same periods in 2013.

Segment	Average Daily Like-for-Like Revenue Growth - 2014 *			Total Revenue
				Constant Currency	Actual (Sterling)
	Three Months to 31 March 2014	Three Months to 30 June 2014	Four Months to 31 October 2014	Ten Months to 31 October 2014	Ten Months to 31 October 2014
Merchanting
- UK	9.8%	6.8%	5.4%	10.0%	10.0%
- Ireland	7.4%	18.6%	15.4%	11.7%	6.1%
- Belgium	28.7%	(11.7%)	(10.8%)	60.3%	52.2%
Retailing	3.1%	3.2%	(1.7%)	0.3%	(4.7%)
Manufacturing	51.6%	27.3%	29.6%	34.3%	33.7%
Group	10.3%	7.5%	6.1%	11.4%	10.1%

*Constant currency

Merchanting (90% of Group Revenue)

Volume growth in the UK merchanting business, which accounted for three quarters of Group revenue, has continued to be driven by the ongoing recovery in residential RMI activity and in the new housing market.  Favourable trading in the established business combined with acquisitions and strategic development initiatives have led to total revenue growth of 10 per cent in the ten months to October 2014.

The marked improvement in first half trading in the merchanting business in Ireland continued through the four months led primarily by a recovery from a very low base in demand in the residential RMI segment of the market and a tentative recovery in house building.

Demand in the Belgium merchanting market continued to be impacted by a decline in consumer sentiment as the economy weakened after a positive start to the year. The revenue decline in the like-for-like business in the four months to October was principally due to lower volumes in the readymix division.

Retailing (7% of Group Revenue)

Demand in the DIY business in Ireland continued to be subdued by pressure on household budgets.  The like-for-like revenue comparison for the four months to October was also impacted by very strong demand for seasonal products in the prior year and by discontinuing a number of product ranges as the business refocused on its core strengths of DIY, Home and Garden.

Manufacturing (3% of Group Revenue)

The mortar manufacturing business in Britain continued to benefit from the recovery in the new housing market.  Strong demand for new homes was stimulated by a significant improvement in consumer confidence, increased mortgage lending and the Government's Help to Buy scheme.

Financial Position

The Group financial position continued to be strong with good cash generation from operations, a low level of net debt and significant undrawn bank facilities to fund operating and development activity.

Gavin Slark, Chief Executive Officer of Grafton Group plc commented:

"As anticipated, the growth in the UK market continues to moderate from the first half and the Irish Merchanting business is showing a marked improvement from a very low base.  The overall outlook continues to be positive and the Group remains on course to report full year operating profit in line with its expectations."

Ends

For further information please contact:

Grafton Group plc                [phone]

Gavin Slark                            Chief Executive Officer

David Arnold                         Chief Financial Officer

MHP Communications        [phone] 

James White

Murray Consultants            [phone]

Pat Walsh

 

END

 

 

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