Slower growth for Cromwell UK amid ‘prolonged Brexit uncertainty’

Grainger’s Q3 financial statement saw revenue grow 7.4% to $2.8 billion, but noted difficulties in the UK market for its Cromwell business.

Revenue for the group was up 8.2%, excluding foreign exchange and impact of hurricanes, versus Q3 2017. Gross profits margin for the quarter was 38.1% compared with 38.6% in Q3 2017.

In GB, reported earnings contained $139 million in non-cash impairment charges relating to Cromwell UK, reflecting “a slower growth trajectory and structural issues”.

Prolonged Brexit uncertainty impacted the market outlook for Cromwell UK, with higher discount rates also accounting for a majority of the reduction in valuation.

“The third quarter represented another solid quarter of profitable growth across the business,” said DG Macpherson, Chairman and CEO. “Even though we lapped the 2017 U.S. pricing changes during the quarter, we saw continued strong momentum and share gains from large and medium customers. Adjusted for the new revenue recognition standard, gross profit margin in the United States was up modestly over last year. The balance of the portfolio is performing as expected, particularly in Canada and with the single channel online businesses. We are confident in our ability to lead the industry with the best service and solutions for our customers.”

Earlier this year, Grainger launched Zoro – a new online-only store offering MRO products to UK businesses and consumers.

In September, Neil Jowsey took the reins at Cromwell as new MD.

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