Grafton Group cuts profit outlook as trading environment remains challenging

Grafton Group has cut its operating profit outlook for the full year due to persistent tough conditions in the Belgian and UK markets.

The builders’ merchant and DYI specialist said ongoing weakness in its Belgium operations has forced it to cut its operating profit expectations for 2015 by between 3% and 4%, as volume and margins have suffered in the region.

In the UK, the group posted solid growth in like-for-like sales in the first four months of the year, while like-for-like revenue advanced in the second half of the year. However, that was partly offset by tough market conditions which have piled pressure on margins.

"With the continued progress of our organic initiatives including the development of Selco, bolt on acquisitions in the UK and the creation of a new platform for growth with the purchase of Isero in the Netherlands, we remain confident in the group's ability to deliver continuing growth in profitability," said group chief executive Gavin Slark.

Grafton shares were up 0.08% to 650.00p at 1001 GMT on Thursday.