Ireland-based builders merchant group Grafton saw its pre-tax profits slide by 50% during the first half of 2008.
Grafton Group plc, whose business includes the Buildbase and Jacksons operations in the UK, reported pre-tax profits of €53.4m for the six months ended June 30, 2008. Sales were down 11% to €1.44bn.
Grafton’s executive chairman Michael Chadwick described the first half of 2008 the “most challenging trading conditions encountered in over 15 years”.
But he sounded a note of optimism by declaring that both the Irish and UK economies were fundamentally sound and should return to more sustainable levels of growth when the restraining effects of higher inflation and tighter credit conditions ease.
An average 13% decline in sterling’s exchange rate against the euro contributed to the poor performance.
Grafton said the adjustment in the Irish housing market to more sustainable supply and pricing levels led to sharply reduced volumes for merchants, while DIY market demand was impacted by poor weather and low consumer confidence.
UK turnover dropped by 7.4% to €907.4m, with operating profits declining 24% to €48.6m. Buildbase’s branches in the south-east performed relatively better than branches in other areas.
East Midlands-based Jacksons reported unchanged turnover, with the company’s broad end-use market exposure helping it meet the challenges of a weakening market.
