Grafton Group, the owner of DIY chain Woodie's, suffered from weak trading in March due to adverse weather conditions and unseasonably low temperatures, after having a positive start to the year, it said in a trading update.
“A positive start to the year in January and February in the overall Group was followed by weaker trading in March,” it said in advance of its annual general meeting (agm) due to take place today.
The adverse weather conditions in March, which extended into the first half of April, had a “significant impact on activity in our markets and reduced the rate of growth in average daily like-for-like revenue to 1.3 per cent for the period”, the company said.
Grafton, which has operations in Ireland, the UK, the Netherlands and Belgium, recorded growth in group revenue of 7 per cent to £907 million in the four month period, however, driven by strong growth in the Netherlands where actual revenue grew by 23.8 per cent compared to the same period last year.
With that, London-listed Grafton said the group’s outlook was “positive”, and although March and April caused a drag, “our expectation for the full year remains unchanged”, it said.
The group’s retail business, accounting for 6 per cent of group revenue, including Woodie’s DIY in Ireland, experienced a “strong start to the year that reflected positive market conditions and the benefit of store upgrades and new and extended product ranges”, Grafton said.
However, it again flagged that demand for outdoor seasonal products “sustained a sharp fall in March” but gradually recovered in April.
The group’s merchanting arm, which accounts for 91 per cent of group revenue, performed well in the period, despite some UK headwinds.
Underlying activity in the UK was “slightly softer” than last year with “competitive market conditions exerting pressure on prices”.
Economic growth across Ireland and the Netherlands proved positive for Grafton’s merchanting businesses in those two territories while in Belgium, lower build construction activity in the first four months of 2018 led the group to record a “satisfactory start to the year”.
"We should continue to benefit from exposure to strong growth markets in Ireland and the Netherlands and, consistent with our view coming into the year, expect underlying demand in the UK RMI (repair, maintenance and improvement) market to remain subdued but house building to perform strongly," said Grafton chief executive Gavin Slark.
From its 650 branches Grafton employs over 12,300 people. Aside from Woodie’s DIY the company has brands including Chadwicks and Heiton Buckley.
The company’s agm is scheduled to take place on Wednesday morning.
