Building materials supplier Grafton Group said today it planned to reopen many UK distribution branches on May 4 and was availing of government support for about 80% of its staff in Ireland and the UK.
Grafton continues to grapple with a collapse in volumes due to coronavirus-led lockdowns.
The company, which operates in Ireland, Britain and the Netherlands, said its UK business is currently trading at only about 10% of normal volumes.
This is largely from supply of materials for emergency and essential projects.
Its Irish distribution business is also currently trading from all branches during restricted trading hours and is operating at about 15% of normal volumes though this has been gradually increasing.
In a trading update, today Grafton said that trading in the year to the middle of March was broadly in line with expectations as branches generally operated at close to normal levels of activity.
It said the impact of Covid-19 became visible over the second half of March and intensified following the introduction of government restrictions leading to national lock downs.
Most of its UK distribution branches and manufacturing plants were closed on March 24 and its distribution business in Ireland was significantly scaled down on 28 March.
On the same date, trading in the Woodie's DIY, Home and Garden business was suspended except for on-line transactions.
However, construction activity has largely continued in the Netherlands where its distribution operations have successfully implemented physical distancing measures.
It said it was currently trading at about 90% of anticipated revenue in its Dutch operations.
"We are taking appropriate actions to manage our cost base while protecting jobs and ensuring that our businesses are strongly positioned for a phased return to trading as restrictions in the UK and Ireland are relaxed," Grafton stated.
The company said it continues to be in a strong financial position with excellent liquidity and as at April 24, it had total liquidity of £562m primarily in accessible cash deposits.
Approval has also been received from the Bank of England which permits drawdown under its Covid Corporate Finance Facility providing further financial flexibility.
"Grafton has a strong and geographically diverse portfolio of brands and very experienced management teams who are focused on protecting the group's businesses and the interests of all stakeholders.
"The actions that we are taking are to ensure that we emerge from the crisis as a strong and vibrant business," Gavin Slark, Grafton's chief executive said.
In a note, Davy Stockbrokers said it was confident of Grafton's durability.
"The group is backboned by a solid financial structure and has considerable liquidity. The recent rebound in the share price after a sharp but temporary sell-off level suggests investors are cognisant of this," the stockbrokers added.
