Woodie’s DIY and Chadwicks owner Grafton Group has acquired Spanish air conditioning and heating products distributor Salvador Escoda, it said on Wednesday, in a deal that will cost the company up to €132 million.
The Irish building materials distributor and DIY retailer brought forward its scheduled trading update in order to announce the completion of the acquisition, with the company also indicating that full-year operating profit would be “broadly in line with expectations”.
The Irish market “continues to see good performance and growth”, it said, though trading in Britain and Finland “remains challenging with little discernible seasonal improvement in volumes”. Costs “continue to be very tightly controlled”, the group added.
“We continue to be pleased with the performance of our Irish businesses where the outlook for growth remains positive. Elsewhere, market conditions remain challenging, particularly in the UK and Finland. The group remains well positioned to capitalise as markets turn and we retain a tight focus on costs and efficiencies,” said Grafton chief executive Eric Born.
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The acquisition of Salvador Escoda is consistent with Grafton’s strategy of acquiring platform businesses in new markets that will allow it to further increase its growth and scale, Mr Born said. “The fragmented nature of distribution markets in Spain, in addition to the expected long-term structural growth in the Spanish economy, provides a unique value-creation opportunity for Grafton.”
The Grafton boss said the group was confident that its medium-term outlook remained positive, amid “strong demand fundamentals, not least in the demand for new housing”.
“In spite of a slower seasonal pick up in the important autumn trading months and foreign exchange headwinds from our euro denominated businesses, we anticipate delivering adjusted operating profit for 2024 broadly in line with analysts’ expectations.”
Group revenue in the period from to October 20th was £1.82 billion (€2.18bn), down 3.7 per cent from the prior year and 2.3 per cent lower in constant currency terms. Average daily like-for-like revenue was 1.6 per cent lower, in constant currency, in the four-month period ending October 20th.
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