Grafton disappoints as UK and Irish LFL sales slip during Q3

13th Nov 2014 12:31

Building materials group Grafton disappointed with third-quarter like-for-like sales lower than the first half even though it said demand and total revenue increased in the UK and Ireland.Revenue for the ten months to 31 October increased by 10% to £1.76bn, especially boosted by the housing market and recovery in its residential activity. Also acquisitions and strategic development initiatives helped the company to generate revenues.However, demand in the Belgium market declined 10.8% during the quarter due to a weaker consumer sentiment in the country.And group like-for-like sales for the four months to October of 6.1% was down from 8.8% growth in the first half and the 7.5% in the second quarter.Chief executive Gavin Slark said: "As anticipated, the growth in the UK market continues to moderate from the first half and the Irish merchanting business is showing a marked improvement from a very low base."The overall outlook continues to be positive and the Group remains on course to report full year operating profit in line with its expectations."Broker Liberum pointed out that, by way of comparison, Travis Perkins achieved 5.7% in its own third quarter "without the benefit of strong Ireland" and a bigger exposure to weak plumbing and heating, while Perkins' general merchanting was up 10.9%.Grafton shares are "too expensive for us", analysts said.