Grafton Group returns to profit growth

Unveiling results for the 12 months to 31 December 2010, the company said its UK merchanting business benefitted from an improvement in market conditions, increasing turnover and profit, while the rate of decline in turnover in the Irish merchanting business moderated and the division was returned to profit for the year. 

While turnover was lower in the Irish DIY business, the business remained profitable, the company said.

Group turnover increased to €2 billion (£1.7bn) from €1.98bn (£1.69bn), with operating profit before amortisation, restructuring and impairment costs increasing by 93 per cent to €50.6 million (£43m) – in 2009 it was €26.2m (£22.3m).

Pre-tax profit increased to €25.6m (£21.8m) from €13.6m (£11.6m) after a restructuring and impairment charge of €15.4m (£13.1m). 

Profit after tax rose to €64m (£54.4m), from €13.4m (£11.4m) in 2009, although a large chunk of this was a taxation credit of €38.4m (£32.6m) which was principally due to a deferred tax asset in the UK business relating to future deductions that are now agreed.

The group saved €27.4m (£23.3m) during the year by implementing measures that reduced overheads in the like for like business.

Grafton executive chairman Michael Chadwick said: “The group’s strong financial position and lower cost base leave it well placed to benefit from improvements in its markets.

“The UK economy appears to be in a modest growth phase and activity in our sector has recovered from historically low levels.  The outlook for Ireland remains unpredictable. 

“Group turnover for the first two months of 2011 is encouraging with a continuation of like for like sales growth in the UK and signs of stabilisation in Irish turnover.  We expect further improvement in profit as markets recover.”

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