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January 12 2018 2:30 AM
Robust economic momentum in Ireland has helped builders merchanting group Grafton post a strong performance in 2017, with group revenue surging 6.8pc to £2.7bn (€3.03bn) in constant currency rates.
Grafton said that both its merchanting and retail arms in Ireland experienced a lift from an economic recovery that will continue this year.
Employers' group Ibec predicts 4.2pc growth for 2018. Grafton owns the Woodies DIY chain in Ireland, as well as merchanting businesses that operate as Chadwicks and Heiton Buckley.
Woodies accounts for just 6pc of Grafton's sales, but revenue at the unit last year was 7.4pc higher in euro terms.
In the UK, which generates the majority of the group's revenue and profits, Grafton said trading conditions in the home repair, maintenance and improvement (RMI) segment, were mixed and impacted by general economic and household uncertainty, and a competitive pricing environment.
Shares in the company jumped more than 4.4pc yesterday as it said that it expects its earnings before interest, tax and amortisation (EBITA) for 2017 to be "slightly ahead" of analyst expectations.
In 2016, Grafton generated adjusted EBITA of £142m (€159.3m). Analysts had been expecting adjusted EBITA of £158m for 2017.
Grafton, whose chief executive is Gavin Slark, said that its market-led merchanting business in Ireland completed its fourth successive year of double-digit, like-for-like revenue growth "in a favourable economic and construction market".
"Demand was driven by growth in the residential RMI market and recovery in house building from a low base that is expected to gain momentum in the current year," according to Grafton.
Grafton's former chief financial officer, Colm O'Nuallain, who retired from the company in 2013, warned as far back as 2010 that the country's recession had seen house building slump to an unsustainably low level and that a new price bubble would likely emerge in future years.
Mr O'Nuallain retired as chairman of Ireland's largest private landlord, IRES Reit, last year.