Grafton's turnover falls to £420m in first quarter 2009

Grafton, the builders’ merchants and DIY group with a headquarters in Dublin, has reported a 22% drop in turnover to £420m in the first three months of 2009 when figures are compared on constant currency terms.

In reality the gap between the average value of sterling against the euro widened – measured in actual terms the drop was 32%.

Grafton operates through three business segments: merchanting, retailing and manufacturing.

In an interim management statement this morning, Grafton said that from 1 January to 28 April “the group faced the most challenging trading conditions in decades.

“The reduced availability of credit has led to lower investment and spending on housing and residential repair, maintenance and improvement.  The trading environment so far this year was very much weaker than in the first four months of 2008. 

“As expected, housing starts and completions have fallen and, combined with lower RMI spending, have significantly impacted the group's merchanting business.

“Sales have also been affected by the poor weather in the early part of the year and the 15% decline in the average value of sterling against the euro in the period.” 

Grafton’s merchanting business accounted for 85% of group turnover. It was hit by a 25% decline in turnover in constant currency terms.

Grafton said: “In the second half [of 2009] the group expects to benefit from seasonally stronger trading. The reduced cost base is on target to yield savings of up to £49m in 2009.”