Grafton Group profits drop 79% amid signs of stabilisation

Irish and UK Builders and plumbers merchant group Grafton saw sales and profits fall for 2009 although there are signs that the market is stabilizing.

The final results, released yesterday morning, show revenue falling 26% to €1.98bn from €2.67bn the previous year, while pre-tax profits fell 79% from €64.1m to €13.6m.

In the UK, which accounts for 68% of the group’s sales, turnover was down 20%to €1.34bn. The UK businesses include the merchant brands Grafton Merchanting GB (Buildbase, Plumbase and Jacksons) and Selco. UK Turnover stablised in the second half, with many of the businesses showing “modest like-for-like growth”.

The group opened 10 new branches in the UK during the year.

Executive Chairman Michael Chadwick, said: “Group sales in the second half of 2009 were similar to the first half. This stabilisation of sales, combined with the action taken to substantially reduce the cost base and integration benefits in our merchanting business, resulted in improved profitability during the second half of last year.

“Sales in the first two weeks of January 2010 were affected by severe adverse weather conditions. Since then sales have been close to expectations and last year with good increases into the UK new housing sector.”

“The Group’s strong businesses and financial strength position it to consolidate market share in its key markets. With a lower cost base and more integrated merchanting business, it is well placed to benefit from its operating leverage as markets recover.”