Grafton shares fell the most in three years on Thursday, after the company did not reiterate its guidance for the rest of the year.
Shares in the owner of the Woodies DIY chain slumped as much as 8 per cent in London before paring the loss to 5.6 per cent.
“Many of our markets remain challenging and we are not expecting a significant increase in volumes this year,” the company said in a trading statement. “Our experienced management teams continue to actively manage both gross margin and our cost base through-the-cycle and position our market leading brands to provide a strong value proposition to customers.”
Overall revenue was £1.25 billion for the group, up 10 per cent from last year’s £1.14 billion. That included the impact of acquisitions Salvador Escoda in Spain and HSS Hire Ireland, Grafton said.
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Average daily like-for-like revenue was 2.4 per cent higher, with trading activity gaining momentum mid-period. However, it eased from mid-May and into June as global uncertainty likely dented consumer confidence and hit spending.
Its Irish distribution business recorded average daily like-for-like spending that was 3.7 per cent higher than last year with trading activity at its Chadwicks business continuing to recover from the impact of Storm Éowyn in January.
Although the outlook for growth in the construction sector remains positive, the company warned about “persistent external challenges”, citing planning delays, utility connection issues and labour shortages as a drag on the sector and expansion of supply.
[ Grafton to acquire HSS Hire Ireland for €31.6mOpens in new window ]
The retail business was also strong, with its Woodie’s DIY chain getting off to a good start. Average daily like-for-like revenue rose 7.6 per cent, supported by growth in both the number of transactions and average transaction values.
In the UK, average daily distribution revenue rose 0.2 per cent, with growth supported by price inflation and demand for repairs, maintenance and improvements remaining soft.
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The Netherlands saw a rise of 2.8 per cent, supported by growth from sales to national key accounts, while Finland saw a decline of 4.2 per cent. Spain’s average daily revenue was up almost 7 per cent.
Grafton’s manufacturing business saw average daily revenue up 5.2 per cent, although momentum at its CPI EuroMix business slowed in the second quarter.
“We are pleased that our trading performance was in line with our expectations for the first half,” chief executive Eric Born said.
“Though we remain cautious about the timing of a broader recovery, particularly in the UK and Finland where markets remain challenging, we remain very well positioned to capitalise on our market leading positions as the cycle turns.
“We continue to actively evaluate growth opportunities in all our markets and to strengthen our position both organically and, where appropriate, by acquisition using the strength of our free cash flow conversion and balance sheet.”
