Grafton posts 2.5% rise in turnover

Turnover at Grafton Group, which owns the Woodies and Chadwicks hardware stores, increased by 2.5 per cent to €2.05 billion in 2011, the listed company said this morning.

While trading conditions were "difficult" during the year, a strong end to the year boosted performance according to the company, with the final two months of 2011 ahead of the same period in 2010 when inclement weather impinged on performance.

The UK business - which accounted for 70 per cent of turnover - experienced a 4.5 per cent increase in turnover for the year, compared to an increase of 4.0 per cent in the 10 months to October.

Its Irish business remained under pressure. Turnover at Grafton's Irish operations fell by 6.4 per cent during the year, compared to a decline of 7.7 per cent in the 10 months to October, again representing a slight improvement towards the end of the year. Grafton's Irish business was affected by lower spending on higher value products, which fell by 4.7 per cent during the year, though transaction levels held up well in the Irish retailing business generally.

The group said due to the decision by the Government not to proceed with the legislation to end upward-only rent reviews for existing leases, it is recognising a non-cash provision of €19 million in connection with a small number of onerous leases in the Irish retailing business.

The company intends to book a restructuring charge of €13 million to its income statement for 2011, and an incremental benefit of €6 million in 2012, following the implementation of restructuring and cost reduction measures in response to the strong decline in markets in recent years.

Grafton is forecasting operating profits to be at the upper end of the €52 million to €55 million range guided in its November interim management statement.