A strong performance in H1 of 2017 sees Grafton Group a worthy recipient of the July Company of the Month award.
The group, an international distributor of building materials, which owns the popular Woodies DIY stores, saw strong growth in both the Irish and the Dutch markets, with revenue growth of 10.6 percent and 38.1 percent respectively. Strong economies and recovery of both commercial and residential building markets contributed to the group’s performance.
According to their trading update, group revenue increased by 6.2pc in constant currency to €1.52bn in H1 2017.
The rollout of new builders warehouse Selco store branches in the merchanting division, which accounts for 92 percent of group revenue, drove strong growth. They now operate 54 stores with another 10 planned to open this year.
“We are pleased with the group’s first half trading performance which was better than we anticipated and provides a good platform for the full year.
We expect to continue to benefit from both our strong market positions and exposure to multiple geographies and for the positive trends in the Irish and Netherlands businesses to continue in the second half,” Gavin Slark, Chief Executive Officer of Grafton Group announced as they revealed their results.
While UK business maintained good revenue growth, the outlook is necessarily cautious in that market.
The group’s share price soared early on in July as they announced the better-than-anticipated results. Shares rose by as much as 5.9 per cent in London in early trading to £7.50 (€8.49) each, before closing off their highs, at €7.19.
Goodbody’s Stockbrokers had forecast 4.8 percent H1 growth; however the group’s trading statement figure came in at 5.7 percent. Goodbody analyst Robert Eason, who estimated that Grafton Group posted 10 per cent earnings growth in the first half, commented, “This statement clearly underscores the benefits of Grafton’s differentiated business model relative to peers.”
Davy analysts Michael Mitchell and Flor O’Donoghue released a note to clients stating that they plan to raise their full-year earnings forecasts for Grafton by as much as 3 per cent, although the group had not revealed interim earnings at that point.