Grafton Group said its like-for-like revenues declined by 2.7 per cent last year, with sales in the UK and Finland hit by economic weakness as its Woodie’s and Chadwicks businesses in Ireland stood out as a bright spot.
“Against the backdrop of relatively insipid economic growth across many of our key markets, we are not anticipating a significant pick up in volumes this year,” the group said. “While elements of product deflation affecting 2024 have stabilised, growth in product pricing is likely to be very modest.”
In Ireland, Chadwicks delivered revenue growth of 1.6 per cent during the year, which benefitted from a strong trading performance in the last two months with average daily sales up 5.1 per cent. The outlook for growth in construction remains positive in Ireland with an increase in housing supply being a key priority for the incoming government, it said.
Woodie’s DIY, Home and Garden business in Ireland had a strong end to the year with average revenue up 6.4 per cent in the period helped by growth in both the number of transactions and average transaction values, it added.
UK sales fell 5.9 per cent, even if the pace of decline eased as the year progressed, as repair, maintenance and improvement activity remained weak, the Dublin-based, but London-listed company said on Tuesday.
Consumer confidence in the UK has weakened in recent weeks and the outlook for short term growth in the economy remains subdued, even if the medium term fundamentals are still strong supported by government plans to increase new housing activity, it said.
The UK economy is estimated to have grown 0.9 per cent last year, amid weak consumer spending, according to a government survey of independent forecasters.
Finnish sales declined 5.2 per cent for the year as a whole. However, they edged 2.3 per cent higher in the final two months of 2024, as the Scandinavian country emerged slowly from recession and Grafton saw a boost in demand for winter-related products and it sold off aged inventory.
Manufacturing sales, spanning dry mortar to staircase making in the UK, slid 15 per cent.
In the Netherlands, sales declined 2 per cent during the year although was down by 4 per cent in the last two months as early signs of recovery in the third quarter did not continue. Weak demand and a slowdown in project-related activity contributed to lower sales in comparison to the prior year, it said.
“We are pleased to have delivered in line with expectations in 2024, despite a challenging market backdrop in several of our markets, particularly the UK and Finland,” said chief executive Eric Born.
“Our Irish businesses continue to perform strongly with a positive outlook for continuing growth. Whilst the timing of recovery in certain geographies remains uncertain, our medium-term outlook is positive, supported by strong demand fundamentals underpinned by housing shortages in many of our key markets.”
The company continues to generate high levels of cash, returning more than £373 million (€444 million) to shareholders through share buybacks completed since May 2022, including £30 million spent on a buyback programme that was launched in August and completed last week.
Grafton acquired Spanish air conditioning and heating products distributor Salvador Escoda, late last year, in a deal worth up to €132 million. It said that integration of the company was on track.
- Sign up for the Business Today newsletter and get the latest business news and commentary in your inbox every weekday morning
- Opt in to Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Join The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
