Grafton Group’s UK merchanting business achieved a 4% growth in sales in 2011 to €1.46bn, according to the company’s newly-published annual results.
Operating profits in the division were up 3.5% to €59.9m (2010: €57.9m).
“Buildbase traded in a relatively stable market with mainly price-driven turnover growth in its general merchanting branches where demand was primarily influenced by housing RMI activity,” Grafton said.
Trading Conditions in Grafton’s East Midlands chain – Jackson Building Centres – moved towards stabilisation and the performance was helped by operating efficiencies and a lower cost base.
The Selco Builders Warehouse business reported strong growth in turnover and operating profit. It now has 30 stores, with a further three to open in London during the second half of 2012.
Turnover in the Irish merchanting business declined by 6.4% to €306.8m, while operating profit rose 12.5% to €4.1m.
Grafton predicts growth to remain subdued in the near term, with the fiscal consolidation programme, tight credit conditions and households saving a high proportion of income likely to weigh on housing transactions and a recovery in RMI market volumes.
However, it said medium-term demand fundamentals for the housing RMI market remain “exceptionally strong” in view of volume declines of more than 30% since 2007 and the need for investment in aging housing stock.
