Grafton lifts profit forecasts after strong first half
Building materials distributor Grafton on Thursday lifted annual profit forecasts after a better-than-expected first half drove an increase in revenues.
The company said it expected adjusted operating profit of £240m, close to the current consensus of £243m.
Grafton said trading had been strong in May and June, helping revenue increase 47% to £1.55bn for the six months to June 30 compared to last year when branches, stores and manufacturing plants in the UK and Ireland were closed except for the provision of materials to essential services.
The rise came despite pressure on supply chains during the Covid pandemic caused by increased international demand for building materials, limitations on manufacturing capacity, a shortage of raw materials and the container shipping logistics issues as air traffic came to a virtual standstill.
“These procurement challenges resulted in shortages of core building materials, an extension of delivery lead times, certain products being placed on allocation and a sharp increase in product price inflation across a range of categories in the UK and Ireland,” the company said.
Strong revenue growth trends that developed in March and April were sustained in May and June led by Woodie's in Ireland and Selco in the UK, Grafton said.
“The strength of our customer propositions together with good underlying demand in the residential repair, maintenance and improvement and new housing markets contributed to this very encouraging performance,” it added.