UK merchanting boosts profits for Grafton Group

Builders merchanting and DIY group Grafton made a pre-tax profit of £101.2 million last year with its UK merchanting division performing strongly due to improving market conditions.

In its financial results for the year ended 31 December 2014, the Group said revenue was up by 9.6% to £2.1 billion.

Grafton’s UK merchanting revenue increased by 9.5% to £1.53 billion after it benefitted from growth in the housing repair, maintenance and improvement (RMI) and new-build markets.

Selco Builders Warehouse had an “excellent” year, according to Grafton, achieving a “significant increase in revenue, operating profit and margins”.

Selco’s chief executive officer, Chris Cunliffe, told BMJ: “It’s arguably been our most successful year ever, where we’ve produced some phenomenal results, which contributes to the Grafton results significantly now.

“I think in our own right, it’s fair to say we’re the fourth largest builders merchant now. We are a force to be reckoned with.”

Buildbase also reported increased revenue but Plumbase experienced a decline in revenue for the year, noting unseasonably mild weather conditions in September and October delayed the start of the heating season and weaker volumes in the domestic installation market following on from the Government’s ECO funded boiler scheme.

Gavin Slark, chief executive officer, said: “2014 was a year of significant progress for Grafton which recorded its fifth successive year of strong profit growth and met the Board’s ‘first base’ financial targets of an operating profit margin exceeding 5% and a double digit return on capital employed.

“Given that 2014 was also the first full year of recovery in its major businesses, the overall outlook for the Group is positive.”