Building materials group Grafton has said it faced the most challenging trading conditions in decades in the first four months of 2009.
In a trading statement ahead of its AGM in Dublin today, Grafton said the reduced availability of credit had led to 'significantly' lower investment and spending on housing and residential repair, maintenance and improvement.
'The trading environment so far this year was very much weaker than the group experienced in the first four months of 2008,' the statement said.
'As expected housing starts and completions have fallen and combined with lower RMI spending, have significantly impacted the group's merchanting and manufacturing business,' it added.
Sales were also affected by the poor weather in the early part of the year and the 15% decline in the value of sterling against the euro.
Grafton said group turnover for the first quarter of 2009 was down 32% on the same time last year to €470m, a fall of €220m.
The company's merchanting business, which accounted for 85% of group turnover, experienced a 25% decline in the first three months of the year.
Its retailing business held up slightly better than expected while consumer spending slowed from the high levels of recent years. The division's turnover declined by 17% in the period.
Grafton's manufacturing activities, accounting for less than 3% of group turnover, suffered the most because of its high exposure to new house building activities and high level of fixed costs. Turnover slumped 50%.
The company said the results for 2009 will reflect the challenging trading environment faced by the group. However, it added that it expects to benefit from the seasonally stronger trading period in the second half. Its reduced cost base is also on target to yield savings of up to €55m in 2009.
Shares in Grafton dropped nine cent to end at €2.54 in Dublin.
