Builders merchant and DIY retailer Grafton Group has reported a record £2.2 billion in revenue for last year, up 6% on 2014.
Grafton, which is headquartered in Ireland but listed on the London Stock Exchange, posted a pre-tax profit of £118.9m, up 17% on the previous year.
The company said its UK merchanting business, which represents three quarters of Grafton's revenue, reported 9% growth in revenue driven by increased building and residential repairs and maintenance.
Grafton also owns Woodies, the largest DIY retail chain in Ireland. Woodies returned to growth last year posting a 4% rise in like-for-like sales and delivering a 46% improvement in operating profit.
It noted that the Irish retailing business was boosted by an acceleration in consumer spending which extended into the DIY sector.
The company said its Irish merchanting business saw a significant improvement on the back of improving economic and construction trends.
Grafton said it was proposing a dividend for the year of 12.50 pence, up 16% on the dividend of 10.75 pence for 2014.
It said the increase is in line with its policy of increasing dividends as earnings increase and reflects both the strong cashflow from operations and relatively low level of net debt by the end of the year.
The company's chief executive Gavin Slark said that Grafton made continuing progress in 2015 producing record revenue and solid growth in operating profit.
Mr Slark said the company continued to invest in organic growth initiatives and selective acquisitions, most notably Isero in the Netherlands.
"We are confident about the overall prospects for the group and expect to deliver organic growth in the year ahead and to also benefit from recent development activity as well as exposure to the strengthening economies in Ireland and the Netherlands," he added.
Grafton said that revenues from its group merchanting division - which makes up 91% of group revenue - rose by 7.3% to £2.01 billion. Operating profits, before exceptional items, increased by 12.9% to £124.2m.
Its UK merchanting revenue grew by 8.9% to £1.66 billion while operating profits were up 13.8% to £105.58m on the back of increased activity in the residential repair and maintenance markets and new build markets.
But its Irish merchanting division reported marginally lower revenues of £257.32m compared to £257.55m in 2015. Operating profits rose by 13.2% to £18.58m as residential property deals continued to increase during the year.
Grafton said that property deals were equivalent to 2.2% of the housing stock, but noted that this was half the level of deals expected in a "normalised market". The company also saw a modest increase in house building as completions increased to about 12,000 units from 11,000 units in 2014.
"This was less than half the level of estimated output required to meet demand on the basis of demographic trends. Forward looking indicators point to growth in house building but the level of supply is likely to continue to lag growth in household formation for some time," the company stated.
Grafton said that revenues in its retail division - which makes up 7% of group revenue - fell by 6.1% to £148.56m, while operating profits increased to £3.48m from £2.38m in 2014.
It said it saw a marked improvement in consumer sentiment in Ireland as employment growth, rising earnings and reduced taxes - during a period of very low inflation - translated into growth of 5% in retail sales.
It noted however, that the pace and stage of recovery was more advanced in the greater Dublin area than the rest of the country.
"Despite the strong economic recovery, consumers remain cautious and discounting was a feature of the retail sales environment during the year," the company added.
