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Grafton Group makes interim operating loss

The Irish merchant business Grafton made an overall operating loss of €8.3million for the six months to June 30 2009. The deterioration of demand in the UK and, particularly, the Irish construction market brought group turnover down by 31% to €0.99bn.

Grafton Group makes interim operating loss

In the UK, turnover from the merchanting operations – which includes the Buildbase, Plumbase, Jacksons and Selco brands – fell 26% to 647m euros and operating profit was €12.8m, down from €49.9m this time last year.

The company blames weak consumer confidence, tighter credit conditions, falling house prices and the fact that housing transactions and mortgage approvals are at historically low levels. The fact that the decline in average daily sales eased up in May and June was down to the progressive deterioration seen in the same period last year, rather than any improvement in the market.

To compensate, the company added a further 321 job losses during the period, on top of the 800 lost during the second half of 2008.

The group is also bringing together the Buildbase, Plumbase, Jacksons and specialist merchant operations into a single management and reporting structure which will lead to significant overhead and employment cost savings.

Turnover in Irish merchanting fared even worse, falling 46% to €193m, with the Irish economy now in its second year of recession and likely to contract further.

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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