Grafton Group, owner of brands such as Woodies and Chadwicks, revealed that despite a 28% fall in profits in 2023, the company outperformed predictions. Amid consumers’ hesitance towards pricey home enhancements and challenges related to housing affordability, the DIY supplier made an adjusted operational yield of £205.5 million (€240 million). This compares to £285.9 million the previous year as reported in a company announcement. Grafton saw a slight growth of 0.8% in revenue, totalling £2.32 billion.
Chief Executive Eric Born stated an anticipation for tough commercial conditions to continue, yet asserted that the ongoing lack of new homes and need for older property improvement, including energy-saving measures, supported demand fundamentals. Born suggested that Grafton was particularly well-situated to prosper as an increasingly favourable financial climate emerges, alongside the stabilisation of markets and a boost in consumer optimism.
The company attributed the decline in profits to elevated cost-of-living stresses induced by high inflation and interest rate hikes, leading households to reduce their spending on home enhancements. Additionally, this caused a slump in the demand for new homes, resulting in decreased volumes within Grafton’s main distribution operation. However, it was highlighted that expenses for construction materials began to decrease late in the year.
Grafton’s Woodie’s business in Ireland succeeded in elevating its revenue despite what the company termed as the most severe financial conditions experienced by customers for a while, although there was a small dip in profitability.
Adjusted operating margins dropped by 2.5 percentage points. Nonetheless, the company declared an increment of 9.1% in its dividend, raising it to 36 pence per share.
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