Grafton Group plc’s trading update for the four months to 31 October 2020 shows revenue and profitability running ahead of expectations, with Group like-for-like revenue up by 6.3% and total revenue up 5.1% to £1.0 billion (2019: £962.0 million).
The report notes the “strong recovery in the period following the significant disruption to trading in the second quarter caused by the pandemic” with demand was strongest in the Woodie’s DIY, Home and Garden business in Ireland and in the residential repair, maintenance and improvement segment of the distribution markets in the UK, Ireland and the Netherlands.
In addition to benefitting from the pent-up demand that developed during the lockdown which, in management’s view, can be attributed to “households investing part of the savings from reduced spending on travel, leisure and hospitality in their homes”, the Group was also able to benefit from “investments made in recent years in its higher margin businesses, including the accelerated rollout of its digital strategy”.
Focusing on Grafton’s UK merchant operations, average daily like-for-like revenue was up 2.3% in the four months to the end of October following the reopening of branches on a full-service basis by the end of June. In particular, Selco “performed strongly” with average daily like-for-like growth of 10.8% over the four months whilst average daily like-for-like revenue was “marginally down” in the Group’s traditional UK merchanting business, as growth in residential RMI revenue was offset by softer housebuilding and commercial markets.
Gavin Slark, Chief Executive Officer of Grafton Group plc, commented: “Despite all the current uncertainties, we are very encouraged by the trading and financial performance of the Group over recent months. Grafton is in a very strong financial position and has a diversified portfolio of market leading businesses with exposure to residential RMI leaving it well placed to benefit from current market trends.”
Click here for more details on the Grafton’s Q3 trading update.