Grafton Group PLC Trading Update (6645Z)
14 January 2020 - 6:00PM
UK Regulatory
TIDMGFTU
RNS Number : 6645Z
Grafton Group PLC
14 January 2020
Grafton Group plc
Trading Update
14 January 2020
Grafton Group plc, the international builders merchanting and
DIY Group, issues this trading update for the year ended 31
December 2019 in advance of the announcement of its Final Results
for the year on 27 February 2020.
Group Operating Profit and Revenue
Trading in November and December was better than anticipated and
while end markets remain subdued the Group now expects to report
full year Adjusted Operating Profit(1) of circa GBP202 million(2)
and circa GBP190 million on a pre-IFRS 16 basis for its continuing
operations.
2019 Group revenue from continuing operations increased by 2.7
per cent to GBP2.67 billion. Growth in constant currency was 2.9
per cent and average daily like-for-like revenue increased by 1.9
per cent for the year.
The table below shows changes in average daily like-for-like
revenue and in total revenue for continuing operations compared to
the same periods in 2018.
Segment Average Daily Like-for-Like Total Revenue
Revenue Growth
in Constant Currency
Constant Actual
Currency (in Sterling)
------------ --------------
Three Months Year to Year to Year to
to 31 December 31 December 31 December 31 December
2019 2019 2019 2019
--------------- ------------ ------------ --------------
Merchanting
--------------- ------------ ------------ --------------
- UK (4.0%) 0.6% (1.1%) (1.1%)
--------------- ------------ ------------ --------------
- Ireland 2.7% 6.2% 6.2% 5.4%
--------------- ------------ ------------ --------------
- Netherlands (1.4%) 0.6% 37.3% 36.2%
--------------- ------------ ------------ --------------
Retailing 5.6% 4.6% 4.7% 3.7%
--------------- ------------ ------------ --------------
Manufacturing (1.9%) 0.8% 0.8% 0.7%
--------------- ------------ ------------ --------------
Group (1.8%) 1.9% 2.9% 2.7%
--------------- ------------ ------------ --------------
In the UK, households continued to be very cautious about
discretionary spending as uncertainty persisted during the fourth
quarter and sentiment continued to weigh on demand in the
merchanting market. The weak markets of September and October
continued into November and December but did not deteriorate
further. The Group's focus in the UK remains on tight control of
costs, driving efficiency and delivering productivity gains.
The Merchanting business in Ireland saw volumes recover in the
seasonally important month of November and the Group's market
leading Chadwicks business finished the year on a firmer note.
The impact of softer fourth quarter trading in the Netherlands
merchanting market was largely offset by positive gross margin
trends supported by procurement gains and integration benefits.
The Woodie's DIY, Home and Garden business in Ireland delivered
a strong trading performance in the key fourth quarter and for the
full year overall.
Fourth quarter revenue in the CPI EuroMix mortar manufacturing
business was marginally down measured against exceptional growth in
the same period last year. The business benefited from good demand
in the new housing market where market fundamentals remain
robust.
Reported property profit for 2019 is expected to be circa GBP7
million, slightly higher than anticipated.
Gavin Slark, Chief Executive Officer of Grafton Group plc
commented today:
"2019 was a year of significant strategic progress with the
acquisition of Polvo in July which increased our scale and
consolidated our market leading position in the Netherlands. We
also reshaped our portfolio of businesses with the successful
disposal of Plumbase and the Belgian Merchanting business in
October.
While we remain cautious about the timing of any recovery in the
UK merchanting market at this very early stage in the New Year, our
expectations for 2020 are positive for the overall Group and we are
optimistic about growth opportunities. We are well placed to
continue to successfully implement our development strategy
supported by very cash generative businesses and a strong balance
sheet."
Ends
For further information please contact:
Grafton Group plc +353 1 216 0600
Gavin Slark Chief Executive Officer
David Arnold Chief Financial Officer
Murray +353 1 498 0300
Pat Walsh
MHP Communications +44 20 3128 8100
Tim Rowntree/Rachel Mann
Notes
(1) Adjusted Operating Profit is defined as profit for
continuing operations before amortisation of intangible assets
arising on acquisitions, net finance expense and income tax
expense
(2) Analysts' Forecasts compiled internally by Grafton show
consensus Adjusted Operating Profit of GBP193 million (post IFRS
16)
About Grafton
Grafton Group plc is an international distributor of building
materials to trade customers and has leading regional or national
positions in the merchanting markets in the UK, Ireland and the
Netherlands. Grafton is also the market leader in the DIY retailing
market in Ireland and is the largest manufacturer of dry mortar in
the UK.
Grafton trades from circa 550 branches and has circa 12,300
colleagues. Its portfolio of brands includes Selco, Buildbase,
Leyland SDM, MacBlair and CPI EuroMix in the UK; Chadwicks, Heiton
Buckley and Woodie's in Ireland and Isero, Polvo and Gunters en
Meuser in the Netherlands.
For further information visit www.graftonplc.com
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END
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