Grafton Group - 2012 Interim Results

Interim Results for the six months ended 30 June 2012

Highlights:

-Revenue up 4.6% to €1.05 billion
-Underlying operating profit up 19.3% to €31.3 million
-Underlying profit before taxation up 18.1% to €23.8 million
-Adjusted basic earnings per share up 11.6% to 8.1 cent
-Strong cash flow from operations of €54.8 million
-UK business accounts for 76% of revenue

€'m 2011 / €'m 2012
Revenue 1,055 / 1,008

Underlying (before exceptional items and amortisation):
Operating profit 31.3 / 26.2
Profit before tax 23.8 / 20.2
Profit after tax 18.7 / 16.7
Adjusted basic earnings per share 8.1c / 7.2c

Statutory:
Operating profit 24.5 / 21.1
Profit before tax 17.1 / 15.1
Profit after tax 12.2 / 12.4
Earnings per share basic 5.3c / 5.4c
Dividend 3.0c / 2.75c
Net debt 200.6 / 245.8

Gavin Slark, Chief Executive Officer commented:

"The Group continues to make good progress in markets that remain challenging and the outlook is still uncertain. The focus on self-help will continue to be at the forefront of our activities and the Group remains in a financially robust state."

Source : Grafton Group
www.graftonplc.com/media/press-releases

Additional Commentary:

Grafton Group has this morning reported first half revenue of €1.05bn, a 4.6pc increase over the same period in 2011, which it attributed to the resilience of its brands, which include Woodies, Chadwicks, Buildbase and Heiton Buckley, and a range of measures taken to improve profitability.

The builders merchants and DIY group said underlying operating profit was up 19.3pc to €31.3m. Underlying pre-tax profit was up 18.1pc to €23.8m.

The proportion of group revenue from the UK business increased to 76pc from 72pc.

The company said its first-half performance demonstrated “the resilience of the group's brands and the benefit of a range of internal initiatives taken to improve profitability and returns in a difficult trading environment”.

It said the merchanting business in the UK performed strongly despite a decline in volumes in the residential repair, maintenance and improvement market. Meanwhile, a series of measures taken to reduce costs moderated the decline in operating profit in the Irish merchanting business which experienced a fall in revenue.

A contraction in consumer spending and adverse weather conditions in the second quarter contributed to a revenue drop in the Irish retailing business. Revenue in the Belgian merchanting business increased following the completion of three acquisitions last year and the group's share of the joint venture increased to 58pc from 53pc.

Looking forward, the group said the outlook for the UK economy is uncertain but it is expected to face headwinds over the remainder of the year due. It said that in Ireland, the economy has stabilised but the outlook continues to be challenging, with demand expected to remain weak in the merchanting and DIY business.

UK merchanting daily like for like sales were flat in July and August. In Ireland average daily merchanting revenues were down 12.5pc which was impacted by branch consolidations. Irish retailing revenues were down 7pc in the same period.

“There will be a renewed focus over the remainder of the year on strengthening the market position of the group's businesses and on profit improvement measures that will add long-term value for shareholders,” said the company.

Source : Grainne Rothery
www.businessandleadership.com/business/item/36873-grafton-groups-revenue-up