Grafton sees FY profit slightly above top end of analysts' range

In an update for the period from 1 November to the end of December 2023, Grafton said it delivered the performance despite a continuation of the softer market conditions seen in September and October.

Group revenue for the year rose 0.8% to £2.32bn, with 60% generated outside the UK from operations in Ireland, the Netherlands and Finland.

Grafton said full-year adjusted operating profit was set to be slightly ahead of the consensus range, thanks to stronger trading at its businesses in Ireland, the timely implementation of previously-announced cost-reduction measures and "ongoing group-wide cost discipline".

The company, which owns Woodie’s and Chadwick’s, said activity remained subdued in November and December, with average daily like-for-like revenue down 2.9%, which was slightly less than the outturn for September and October.

This was driven partly by modest product price deflation in the distribution businesses in Ireland and the UK.

UK markets remained weak and repair, maintenance and improvement (RMI) volumes remained under pressure due to lower discretionary spending by households, a drop in housing transactions and a fall-off in larger home improvement projects, Grafton said.

Chief executive Eric Born said: "While the trading environment in the final months of the year continued to be subdued across most of our markets, we are pleased that adjusted operating profit for 2023 is now expected to be slightly ahead of the top end of analysts' forecasts.

"We made good progress during the year developing and executing our strategy and in starting to build a deeper pool of acquisition opportunities in targeted European markets. We remain confident in the medium-term drivers of demand in our markets and, underpinned by a strong balance sheet, Grafton is well positioned for growth as trading conditions improve."