Grafton Group’s financial results for the six months to 30th June 2024 show pre-tax profit down 23% at £71.7m (2023 H1: £93.6m) on revenue down 4% at £1,137m (2023 H1: £1,189m).
The decline in average daily like-for-like revenue was 4.5 %.
Grafton’s Irish distribution and retailing businesses achieved average daily like-for-like revenue increases in the period. But its UK markets remained weak, with repair, maintenance & improvement (RMI) volumes suffering from lower discretionary spending by households and a wet spring also hitting trade.
However, it remains on course to meet analysts’ expectations for the full year.
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“In the UK, we remain cautious on the near-term outlook however there are positive signs emerging of improving consumer confidence due to reductions in inflation and interest rates as well as an expected increase in real disposable income,” the company’s report said. “In addition, the new UK government’s determination to swiftly implement policies to encourage housebuilding should drive activity and increase construction demand which should improve the outlook for a recovery in volumes across our business.”
Chief executive Eric Born said: “This has been a robust first half performance despite challenging conditions in several of our markets. We are pleased with the performance and outlook of our Irish businesses in particular, and we continue to drive efficiencies and innovations in our other markets to capitalise on what we see as significant positive operating leverage opportunities as these markets turn.
“Whilst uncertainties remain in the short term, our medium-term outlook remains positive, supported by strong demand fundamentals, not least in the demand for new housing as markets normalise and consumer confidence improves. At this point in the year, with the important autumn trading season yet to come, we continue to anticipate delivering adjusted operating profit for 2024 in line with analysts’ expectations.
“The group has continued to be highly cash generative through a challenging period in the cycle, which has enabled us to return cash to shareholders whilst preserving a strong balance sheet to invest in organic and inorganic development opportunities. We continue to actively pursue opportunities to strengthen our existing market positions as well as platform acquisitions, and we remain optimistic that we can execute on some of these opportunities in the near term.”
