Grafton shares drop on trading slowdown, cautious outlook
Shares in Grafton Group Plc dropped on Thursday after the builders merchant said it experienced a slowdown in trading activity towards the end of the first half, with markets expected to "remain challenging" over the rest of the year.
Group revenues totalled £1.25bn over the six months to 30 June, up 10.1% over the previous year, helped by recent acquisitions of Salvador Escoda in Spain and HSS Hire Ireland.
Excluding those, daily like-for-like revenues were up 2.4% on last year.
"Trading activity recovered strongly after a subdued start to the year however there was a slow down in momentum from mid-May and into June as a spike in geopolitical uncertainty appeared to dent consumer confidence in the period," said chief executive Eric Born.
He said the company remains uncertain about the timing of a market recovery, especially in the UK and Finlan where conditions are still challenging.
As a result, Grafton doesn't expect to increase volumes this year, but said that it is actively managing margins and the cost base.
"Despite macroeconomic uncertainty, the medium-term outlook for Grafton remains positive, supported by housing shortages across all our markets and an anticipated recovery in RMI demand. We continue to invest in and strengthen our market positions supported by a robust balance sheet and strong cash flow generation," the company said.
The stock was down nearly 8% at 917p by 0955 BST.
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