Merchanting group Grafton - owner of Selco, Chadwicks and Woodie's DIY, among others - saw revenue rise 9%, with the UK merchanting arm exceeding £100m in operating profit and Ireland proving an "important and consistent growth engine" for Grafton.
Revenues reached £2.7 billion in 2017 (2016: £2.5bn), while operating profit grew 17% to £160.9 million (2016: £163.7m).
In the UK, Selco had its most active year ever on development, opening 12 branches. Grafton's merchanting business in Ireland delivered double digit revenue growth and a "strong increase in profitability". A favourable market and three acquisitions saw the Netherlands business increase in scale and profitability, while the Belgium merchanting business returned to profitability.
“2017 was a very good year for Grafton that saw all segments and geographies contribute to strong revenue growth and a 15% increase in adjusted profit before tax and earnings per share," said CEO Gavin Slark. "Our expectations are positive for the current year and we remain confident about the potential to take advantage of opportunities that create value for shareholders.”
Outlook
In its statement, Grafton said: "We anticipate that overall conditions in the UK merchanting market are likely to remain relatively flat and that further progress in 2018 will continue to be dependent on realising benefits from self-help and other opportunities. Activity levels in the UK housing RMI market are expected to remain subdued and sensitive to changes in housing transactions and consumer confidence and spending. House building is expected to remain strong supported by good underlying demand, the availability of mortgages and the Help to Buy scheme.
The outlook for the Group’s businesses in Ireland is favourable with balanced growth forecast to continue albeit at a more moderate rate than experienced in recent years. Demand in the merchanting and DIY markets should continue to benefit from increased consumer spending and investment in residential RMI, house building and nonresidential construction.
The prospects for the Dutch economy are positive with broadly based growth forecast to continue boosted by international trade and increased public spending. Demand in the secondary and new housing markets is expected to continue to exceed supply.
The Belgian merchanting business should continue to benefit from internal initiatives and the modest recovery in the economy.
Total revenue growth in the period from 1 January 2018 to 18 February 2018 was 6.8%. Average daily like-for like revenue increased by 3.8 per cent in the overall Group, 1.0 per cent in the UK merchanting business, 5.6 per cent in the Irish merchanting business, 11.0 per cent in the Dutch merchanting business and 7.2 per cent in the Belgium merchanting business. Like-for-like revenue was ahead by 17.0 per cent in the retailing business in
Ireland and by 25.7 per cent in the manufacturing business.
We remain confident about the prospects for growth in the current year and in our capacity to take advantage of future opportunities to create value for shareholders."
