Gavin Slark, the chief executive of the builders merchant and DIY retailer Grafton Group, said the Irish market appears to be on a path to "sustained recovery".
The group, which owns the Woodies DIY and Heiton Buckley chains, yesterday revealed a strong performance in the second half of the year that pushed full-year sales up by 8 per cent to £1.9 billion (€2.3 billion).
In a trading statement ahead of full-year results due to be published in March, the Dublin-headquartered company said profits for the year to the end of December would be in line with expectations.
Analysts are forecasting earnings of about £75 million for the group, which is listed in London and reports in sterling.
Grafton's UK builders' merchanting business, which is responsible for about 75 per cent of sales, grew by 3.2 per cent last year, according to its latest trading update.
Woodies
The Irish builders merchanting division, which includes Heitons and Chadwicks, saw like-for-like sales spike by 6.7 per cent in the second half of the year and 3.6 per cent over the 12 months. Total revenue growth in the division slipped back to 1.9 per cent for the year, after a number of store closures.
The Irish retailing division, which comprises 38 Woodies stores across the country, saw like-for-like sales growth of 2.7 per cent for the second half and 1.5 per cent for the year overall, slipping back to a decline of 0.9 per cent after store closures. The company said the division showed a “noticeable improvement in sentiment” over the last six months.
“The Irish builders merchanting number jumps off the page. That is the most gratifying number,” said Mr Slark.
He said it was "too early" to consider jobs growth in Ireland. "But the numbers will provide some stability for those we already have working," he said. The company employs about 2,000 staff in Ireland.
He said Grafton expects to complete its €20 million purchase of the MPro merchanting chain in Belgium in "early February".
London listing
Mr Slark added that the deal w
ould make Grafton the biggest operator in the market in that country.
He said the company would improve the profitability of its Irish divisions further over the medium term “through volume gains and efficiencies”.
Mr Slark said he was also pleased with the group’s decision last year to decamp from the stock exchange in Dublin to list in London, where it features in the FTSE 250 index.
“We are getting a lot of interest from UK funds. Everything we expected to get from the move, we are getting,” he said. When it announced its London listing last year, the company said it wanted to attract more international coverage and investors.
Goodbody stockbrokers analyst Robert Eason said the results were slightly ahead of the market's expectations.
'Key benefactor'
“Grafton has significant exposure to the well-documented recovery in the UK , which will spread to the
[renovations] segment, a key market for the company,” Goodbody said this week in an outlook for the sector.
“In addition, Grafton’s large exposure and dominant market position in Ireland means that it will be the key benefactor of a recovery in the Irish construction market in 2014.”
Goodbody said it expects the Irish construction market to “rebound strongly” in 2014.
