Merchanting group Grafton Group saw revenue fall 26 per cent to £810.9 million in the five months to 31 May 2020 from £1.09 billion in the same period last year due to the impact of the Covid-19 pandemic, according to a trading update issued today (June 11)
A solid start to the year was followed by a decline in activity in the second half of March, meaning group revenue was two per cent down in the first quarter compared to the same period last year.
The national shutdown measures in place throughout April in the UK and Ireland led to a decline in Group revenue of 80 per cent in the month compared to April 2019. However, with restrictions easing in May, the majority of branches were able to either fully or partially reopen through the month. Revenue in May was down 38 per cent on the prior year.
The UK merchanting business traded at approximately half the prior year level in May on an improving trend as the month progressed.
Selco reopened 42 branches initially on 6 May for Click & Collect and Click & Deliver trading only with the remaining 26 reopened on 18 May. In a gradual return to a more normalised operating environment, trading in the 42 branches that were initially reopened was extended to a full in-branch self-select service by the month end and the remainder of the branch estate will be fully operational by 22 June 2020.
The traditional UK merchanting businesses operated on branch collections and on-site deliveries basis, mainly for residential outdoor projects. The return of house builders to construction sites and the re-starting of commercial projects has been slower and, as a consequence, this segment of the market has seen a more gradual increase in activity. Buildbase saw an increase in on-line orders following an upgrade to its website during the lockdown. Both Leyland SDM, the specialist decorators’ merchant in London and TG Lynes, a distributor of commercial pipes and fittings in London, remained open and traded well during the lockdown.
Gavin Slark, Chief Executive Officer of Grafton Group plc said: “I would like to thank our colleagues for their outstanding effort, commitment and success in seamlessly restarting our businesses with exceptional Covid-19 protocols in place to safeguard our customers and colleagues. The restrictions introduced to contain the spread of Covid-19 had a significant effect on trading since the second half of March and while there are many challenges to be overcome in the months ahead, we are encouraged by the early trading indications following the reopening of our businesses in the UK and Ireland. Grafton is in a strong financial position and, with a resilient portfolio of businesses, will emerge from this crisis well positioned for future growth.”