The Irish DIY chain reported a 9.1% uplift in revenue for the four months ended October 31, as it continued the revamp of its store portfolio and consumer spending increased.
Woodie’s, part of Graft Group’s retailing division, which accounts for 6% of it’s the group’s total turnover, posted the positive results in its trading update today. Revenue for the 10 months ended October 31 increased 7.1%. The figures continue the upward trend seen in the first half of the year, when like-for-like revenue at Woodies was up 6.6%.
The group said spending in Woodie’s stores has “increased strongly, as customers responded positively to the store upgrades”. The chain has been steadily upgrading the stores in its estate, with a further four revamps completed in the first half of this year, taking the total number to 16. Four more are scheduled for completion before the year end. Woodie’s garden centres, which are an integral part of each store, are also being upgraded with eight completed in the half year.
A continued rise in employment and incomes in Ireland has also helped the chain’s performance, said the group.
The business is now said to be focused on the typically higher-volume final two months of the year, when Christmas is expected to be a key driver of demand.
Meanwhile, the group’s merchanting division, which accounts for 92% of Grafton’s total revenue was influenced by a weak third quarter comparator in 2016. The group said that “demand softened in October and volumes were broadly flat measured against an improving trend in the fourth quarter of last year.” Pricing for the sector is also likely to remain competitive going into the year-end.
Meanwhile, expansion is still on track at Grafton’s Selco chain, which is on course to open its target of 12 new branches this year. A new branch was opened in Hemel Hempstead in September and the planned opening of branches in Hayes and Solihull before the year-end will increase the branch network to 59.
The pace of growth in the Irish merchanting business moderated a little during the 10-month period, as anticipated, although the prospects for sustained growth are positive, said the group.
The recovery in house building in the Irish market gathered momentum from a low base but Grafton expects that it will require several years for supply to meet ongoing demand. Non-residential construction is in the early stages of a recovery that is expected to remain on a firm growth path.
Group revenue for the 10 months was £2.30billion, an increase of 9.1% on revenue of £2.11 billion in the corresponding period in 2016. The increase in constant currency terms was 6.9 per cent.
Grafton Group CEO Gavin Slark commented on the results: "We are pleased with the performance of the Group during the period and our expectations for the full year remain unchanged. We anticipate that current trading conditions in the UK merchanting business are likely to continue over the remainder of the year while the Irish and Netherlands businesses should benefit from favourable trading conditions and strong market positions.”