Grafton Group, the owner of Woodies DIY and Chadwicks brands, experienced a 5% decrease in revenue in the early stages of 2024. This decline was attributed to a combination of negative factors: adverse weather conditions, macroeconomic uncertainties and price deflation, which placed pressure on the building materials firm. Between the start of the year and 24th April, the Group’s revenue totalled £669.2 million (€782 million), marking a 5% drop compared to the same period the previous year, with alike-for-alike revenue decreasing by 4.5%.
The Group largely attributed the downturn in demand to unusually heavy rain in UK and Ireland. Even though conditions remained less than ideal in their various businesses, Woodies DIY managed to post an encouraging growth in revenue amidst this challenging environment.
Despite grappling with an about 6% material price deflation, Chadwicks managed to capitalise on a favourable macroeconomic landscape and an uptick in volumes. However, Grafton’s UK sector for renovation, maintenance and improvement marked a slump in demand with a material price deflation of 3.5%, exacerbated by the same adverse weather conditions that led to revenue decline.
Furthermore, the revenues in Grafton’s merchanting businesses across UK, Netherlands and Finland witnessed a drop ranging from 6.2% to 8.5%. The manufacturing division also saw revenue diminish by a significant 17.2%.
On a brighter note, the company successfully completed the fourth instalment of its share buyback programme on April 30th, repurchasing 11.1 million shares at an average cost of £9.02 each. CEO Eric Born acknowledged the hardships faced in terms of trading during this period and the subsequent impact on revenue. Yet, in poised anticipation of a potential hike in profitability in the second part of the year, he emphasized the company’s commitment to being customer favourites, brand investment, stringent cost control, and capitalising on the opportunities presented by their cash-rich business along with a sound balance sheet.