Selco’s Merchanting division has outperformed the UK market, resulting in revenue growth, the group has announced.
For the year ended 31 December 2016, group revenue was up 13.4% to £2.51 billion (£2.21 billion in 2015) and 10.4% in constant currency.
Merchanting (92% of Group Revenue)
Revenue gains came from established branches and growth from new branches. Seven were opened in the period, increasing the network to 47 in 2016. Expansion will continue in 2017, the group said.
Grafton paid tribute to the resilience of the residential RMI market (Repairs Maintenance Improvement), which Selco’s trade-only model serves. Revenue growth picked up in the last quarter, although the market “remained very price competitive”.
Merchanting in Ireland outperformed a recovering construction market, with double digit l-f-l revenue growth. An increase in residential RMI activity helped drive that for a third successive year.
Grafton’s interests in the Netherlands increased with the acquisition of Gunters en Meuser in November, which is now complete. Prior to that, Grafton bought its Netherlands Merchanting business in November 2015, which has been supported by a strong recovery in residential new build and RMI markets.
Grafton’s Belgium Merchanting business has faced “difficult market conditions with softening demand”.
Retailing (6% of Group Revenue)
Ireland-based Woodie’s DIY business saw a solid increase in volumes thanks to initiatives taken in previous years, Grafton said. A more favourable retail market also benefitted the business.
Manufacturing (2% of Group Revenue)
Stronger demand in the second half of the year boosted Grafton’s UK mortar manufacturing business.
Grafton Group CEO Gavin Slark said: “The Group finished the year on a more positive note and saw the benefit during 2016 of its exposure to multiple markets.
“We had an active year on the development front with the opening of seven new Selco branches, the completion of two bolt-on acquisitions in the UK and we agreed to acquire Gunters en Meuser in the Netherlands. A strong balance sheet and excellent cash generation from operations support these developments and our ongoing strategic initiatives.”
Grafton’s final results are expected on 7 March.