Grafton reports strong recovery in business despite pandemic shutdown

Building materials group and DIY retailer Grafton Group said strong recovery in its businesses continued through the final months of last year as households spent a greater proportion of disposable income on their homes.

In a trading update for the year ended December 31st, 2020, the Woodie’s DIY owner said revenue and profitability in the final two months of the period was ahead of expectations, with total revenue ahead by almost 11 per cent to £439.4 million (€492m).

Adjusted operating profit is expected to be about 5 per cent ahead of the expected £174 million.

Grafton said it expected exceptional charges of £27 million related to the restructuring undertaken during the year and the recent closure of the UK defined benefit pension scheme to future accrual.

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On a yearly basis, group revenue for the year from continuing operations fell 6.1 per cent to £2.51 billion as trading during the second-quarter lockdown showed a sharp decline.

Grafton said it had seen a continuation of the strong recovery experienced in the four months to the end of October. That came after a sharp decline in second-quarter revenue caused by the pandemic.

The group said demand was strongest in the Woodie's and Chadwicks businesses in Ireland and in Selco in the UK.

Strong demand in the residential repair, maintenance and improvement market, along with a recovery in house-building, led to double-digit growth in average daily like-for-like revenue at Chadwicks through the second half.

Lifting of restrictions

The Woodie’s chain also ended the year very strongly, although there was some moderation in the rate of growth experienced after the lifting of restrictions and reopening of the business.

"We are very encouraged by the strong recovery and performance of the group in the second half of the year," chief executive Gavin Slark said. "Despite the uncertainties related to the pandemic, we believe Grafton is well placed for continuing progress in the year ahead supported by our very strong financial and market positions."

Grafton will publish its final results for the year on February 25th.