(Alliance News) - Grafton Group PLC on Wednesday maintained its full-year operating profit guidance after a "resilient" first-half performance.
The building materials firm and DIY retailer said its performance in the first half of 2023 was in line with expectations, with revenue up 3.2% to GBP1.19 billion from GBP1.15 billion the year prior.
Average daily like-for-like revenue in the second quarter was slightly stronger against the prior year than the performance in the first quarter, Grafton added.
The firm noted that 60% of its revenue was generated in Ireland, the Netherlands and Finland.
Volumes in the distribution businesses in Ireland, the UK and Finland were lower in the first half, Grafton said, reflecting the impact of cost-of-living increases and rising interest rates. Volumes in the Netherlands meanwhile were broadly unchanged.
Grafton noted that lower volumes and sharp falls in timber and steel prices also contributed to more competitive markets and margin pressure in the distribution businesses in Ireland and the UK during the half.
"Grafton achieved a resilient first half trading performance against the backdrop of challenging market conditions and a strong prior year comparator. We are maintaining our guidance for the year while mindful of the potential impact of the macro-economic environment on trading," said Chief Executive Eric Born.
According to company-compiled consensus, analysts see operating profit at GBP205 million in 2023, within a range of GBP194.6 million to GBP223.0 million.
In 2022, operating profit totalled GBP264.3 million. Analyst consensus would therefore represent a 26% year-on-year decline at worst and a 16% decline at best, if achieved.
Shares in the firm were up 3.8% at 791.50 pence on Wednesday morning in London.
By Heather Rydings, Alliance News senior economics reporter
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Grafton Group (GFTU)