Grafton Group has issued a trading update for the two months of November and December 2024. The distribution business in Ireland, along with retailing and manufacturing drove the group-level growth.
The company said overall conditions improved slightly in the last two months of the year compared with the same period in the previous year. Average daily like-for-like revenue was 1% higher in the period in constant currency, supported by growth in Ireland, Finland and its manufacturing segment.
However, group-level revenue dropped by 2.7% in 2024 as the distribution business in the UK, the Netherlands and Finland declined, along with a 15% revenue decrease in its manufacturing business.
In the UK, like-for-like revenue for the distribution business declined by 5.9% and 3.1% in the whole year and November to December respectively as RMI demand continued to be weak. Materials prices in Selco were broadly flat in November and December, with timber prices trending positively in December for the first time since April 2023.
According to the company, consumer confidence in the UK has weakened in recent weeks, and the outlook for short-term economic growth remains subdued. On the contrary, medium-term fundamentals are still strong, supported by government plans to increase new housing activity.
In Ireland, Chadwicks delivered like-for-like revenue growth of 1.6% during the year, which benefitted from a strong trading performance in the last two months with average daily like-for-like revenue up 5.1%.
Materials prices during the period remained largely unchanged compared to the same period last year, as timber and steel costs continued to stabilise.
Woodie’s, Grafton Group’s DIY, home, and garden business in Ireland, had a strong end to the year. Average daily like-for-like revenue was up 6.4% in the period, helped by growth in both the number of transactions and average transaction values.
In manufacturing, average daily like-for-like revenue was 4.7% higher in the period with all businesses showing growth against easier comparators. CPI Mortars reported stronger sales supported by a slowly recovering new housing sector.
Moreover, Grafton Group’s revenue for the year was £2.28 billion, down 1.6% from £2.32 billion in 2023. A weaker euro during the 2024 financial year has slightly reduced the level of reported results as compared to the prior financial year.
Looking ahead, the company said it will remain cautious regarding the timing of a broader recovery.
“Against the backdrop of relatively insipid economic growth across many of our key markets, we are not anticipating a significant pick up in volumes this year. While elements of product deflation affecting 2024 have stabilised, growth in product pricing is likely to be very modest against such a backdrop and likely to be lower than the general level of cost inflation being imposed on the business, particularly as regards labour costs,” the company said.
