Grafton hit by bad weather after positive start to year

Adverse weather in March and early April hit trading at builders' merchant Grafton Group following a positive start to the year in January and February.

In an update for the period from 1 January to 30 April, the group said the 'Beast from the East ' had a big impact on activity in its markets, reducing the rate of growth in average daily like-for-like revenue to 1.3%.

In the four-month period, group revenue was 7% higher at £907m, or 6.2% higher at constant currency.

In the merchanting business, which accounts for around 91% of group revenue, underlying activity in the UK was slightly softer than in the same period a year ago, with competitive market conditions putting pressure on prices. Selco delivered double-digit revenue growth and Grafton said Leyland SDM, acquired in February, has traded in line with expectations.

The Netherlands put in the strongest performance, with merchanting LFL growth of 8%, while Ireland saw growth of 4.6% and the UK experienced a 0.3% slowdown.

Despite the weaker trading in March and April, Grafton said the overall outlook is positive and its expectations for the full year remain unchanged.

Chief executive Gavin Slark said: "We should continue to benefit from exposure to strong growth markets in Ireland and the Netherlands and, consistent with our view coming into the year, expect underlying demand in the UK repair, maintenance and improvement market to remain subdued but house building to perform strongly."

Canaccord Genuity said: "We would not expect underlying consensus to see any material changes today but with a slower start to this year, there is arguably less cushion now baked in. It is difficult to get excited about the underlying UK RM&I market, which remains a large part of the group.

"Overall, the group remains in solid shape with good exposure to non UK RM&I sales trends in Ireland and areas such as its Euromix business."

At 0945 BST, the shares were down 3.9% to 768.50p.