Grafton on track to meet FY profit expectations

14th Nov 2023 09:04

(Sharecast News) - Building materials distributor and DIY retailer Grafton said on Tuesday that it was on track to deliver full-year operating profit in line with expectations, as it reported an uptick in revenue despite "slightly softer than anticipated" market conditions in September and October.

In an update for the period from 1 July to the end of October, the company said group revenue was up 1.7% to £1.96bn.

Grafton said demand was more subdued in the four months to the end of October, leading to a marginal decline in year-on-year average daily like-for-like revenue, with modest price deflation in the distribution businesses in Ireland and the UK.

This compared to slight growth in average daily LFL revenue in the first half.

It also said that the trading environment in the UK repair, maintenance and improvements (RMI) market remained "challenging" for Selco, as high inflation and higher interest rates dented discretionary spending on the home.

Nevertheless, the company expects full-year operating profit to be in line with market expectations of around £198.1m, "supported by cost reduction measures implemented earlier this year and ongoing cost discipline".

Chief executive Eric Born said: "Despite more challenging markets in recent months, we expect group operating profit for the year to be in line with expectations. Our strong focus on cost management mitigated some of the impacts of weaker trading and we continue to support our customers with excellent value propositions across our portfolio of businesses."