Grafton revenues up 7.7% in 4 months to April

Builders merchant Grafton said revenue for the first four months of the year was up 7.7% to £851m as favourable conditions from the end of 2016 continued combined with the benefits of exposure to multiple markets.

"The group has had a good start to the year and the outlook is positive. We expect a continuation of the favourable trends in the Irish and Netherlands businesses," Grafton chief executive Gavin Slark said.

"In view of recent economic and political developments, we are more cautious about the prospects for the UK however we have a good portfolio of businesses with strong market positions and we look to the future with confidence.”

In merchanting, which provides 92% of group revenue, Grafton's Selco chain experienced a good level of demand in its established branch network with the seven branches that were opened last year traded in line with expectation and market coverage was improved in Greater London with the opening of two new branches.

Grafton said Selco will open its 50th branch later this month and was on track to open at least ten new branches this year.

"The traditional UK Merchanting businesses reported solid growth in like-for-like revenue against strong prior year comparatives. The business benefited from measures to improve profitability including the restructuring plan implemented in the last quarter of 2016," Grafton said.

In Ireland, merchanting continued to outperform in a strong market. The recovery in construction activity was broadly based with positive demand trends in both residential and non-residential markets, Grafton added.

The Netherlands merchanting business continued to grow like-for-like revenue against the backdrop of a recovery in the Dutch economy and favourable conditions in the housing market. The acquisition of the 14 branch Gunters en Meuser business in January had provided a strong presence in the Greater Amsterdam Area and a small single branch business located in the Eastern region of the Netherlands has also been acquired.

Like-for-like revenue was lower in the Belgium merchanting business due to the reorientation of the customer base towards a lower volume, higher margin customer model.