Irish and UK builders and plumbers merchant group Grafton Group plc saw sales rise 6% to €2.2 billion in the year ended 31 December 2012.
Underlying operating profit was up 33% to €72.9 million from €54.7 million and group operating profit margin increased by 70 basis points to 3.5% from 2.8%.
The profit increase was driven by the UK merchanting division outperforming the weak market, increasing operating profit margin by 75 basis points to 4.85%
The UK merchanting business – which includes Buildbase, Plumbase, Jacksons and Selco – increased turnover by 10.4 per cent to €1.61 billion (2011: €1.46 billion) and improved its competitive position in a weak RMI market that experienced a small decline in volumes.
Operating profit increased by 21.9% in constant currency as a result of better cost control, improved margin management and integration benefits. UK merchanting accounted for 74% of Group revenue. Despite a significant decline in turnover in the Irish merchanting branches, due to weak residential new build and RMI markets, operating profit was only moderately lower due to costs savings.
Chief executive officer Gavin Slark, said: “The self-help measures implemented over the last two years have enabled Grafton to make significant progress in very challenging conditions. We remain cautious on the near term outlook due to the uncertainties in the economies and markets in which we operate. We expect to make further progress in the year ahead by focusing on a new phase of measures to improve profitability.”