In its interim results published on August 29, Grafton said the performance was due to a higher turnover, procurement gains and operating synergies.
Grafton’s revenue from its UK business increased by 4% to 76% of total revenue.
“The merchanting business in the UK performed strongly despite a decline in volumes in the residential repair, maintenance and improvement market as the UK economy slipped back into a mild recession,” it said.
UK merchanting sales increased by 9.5% to €780.5m in a general merchanting market which is estimated to have declined by 4%.
Grafton said its Buildbase chain focused on increasing revenue and profitability through self-help measures in a challenging market, while the Jacksons business produced a “satisfactory” result having outperformed a weak market in the east Midlands.
A new Jacksons branch was opened in Worksop and redevelopment of the Grimsby branch was completed. The trade-only Selco Builders Warehouses business reported good turnover and operating profit growth while continuing to develop a strong brand with trade customers in the residential RMI market.
Selco performed strongly in London where 15 of the 31 stores are located. An outlet opened in Hanworth, south-east London in July, while a Tottenham store will open later this year.
Grafton’s Macnaughton Blair merchanting business in Northern Ireland increased turnover, primarily by strengthening its market position in Belfast and through an increased exposure to public sector projects in health, education and infrastructure.
Branches were acquired in Cookstown and Downpatrick. Grafton’s Irish businesses are still suffering from a weak domestic economy, with housing output projected to decline further to 5,000 units in 2012.
Irish merchanting turnover declined by 8.7% to €136.4m, with an operating profit of £900,000. Average daily turnover in the Heiton Buckley and Chadwicks branches declined by 13% in January and February, though the decline moderated to half that level in March-June.
The 13-branch Atlantic Home Care DIY business, which has recorded a loss since 2007 and which went into examinership in June, looks likely to survive after the examiner recently indicated he would seek court approval for a scheme of arrangement on or before September 14.
The scheme will involve an investment by a Grafton group company and will lead to two branch closures. Agreement has also been reached with most landlords to reduce store rents to current open market levels.
