The group behind DIY brands Woodies and Chadwicks has reported a drop of 19.4% in group revenue for the first six months of the year to £1.06 billion due to the impact of the Covid-19 pandemic.
But in a trading update, Grafton said trading in June was more resilient than expected with group revenue in continuing operations of £247.8m.
Grafton said this was 11.4% ahead of this time last year due to the benefit of two additional trading days in the distribution and manufacturing businesses and revenue from the acquisition of Polvo in July 2019.
The company said that strong demand in Ireland and the Netherlands was partly offset by a slower pace of recovery in the traditional distribution and manufacturing businesses in the UK.
Grafton said its Chadwicks business, which fully reopened on May 18, recorded growth of 7.3% in average daily like-for-like revenue in June. This growth was mainly driven by strong demand in the repair, maintenance and improvement segment of the housing market.
It said its Woodie's DIY, Home and Garden business in Ireland also fully reopened on May 18 to a surge in demand that continued at a moderating pace. This resulted in a new record for monthly revenue in June due to exceptional sales of seasonal products.
By the end of June, Grafton said that almost all its trading locations were open for business and the vast majority of colleagues had returned to work.
Grafton said that director salaries, fees and pension arrangements which were temporarily reduced in April in response to the impact of Covid-19 on the business were restored with effect from July 1 following the successful reopening of the business in June.
But as previously announced, the annual bonus scheme for 2020 has been suspended.
Grafton said that while it has made further progress in June following the reopening of its businesses in Ireland and the UK in May, its financial guidance for 20202 remains suspended at this stage given the continuing uncertainty in its main markets.
"While we face many challenges in the months ahead, we are encouraged by the group's trading and financial performance in the month of June which represented an important milestone on the road to recovery," the company's chief executive Gavin Slark said.
"Grafton is in a strong financial position and our resilient portfolio of market leading businesses is emerging stronger from this crisis and remains well positioned for future growth," he added.
Davy Stockbrokers said that while Grafton's half year revenues may have fallen 19% year-on-year, the stockbrokers said they believe this represents a "very resilient performance in extraordinary circumstances".
The stockbrokers said today's update confirms evidence elsewhere that trading in the construction sector picked up in June.
"Given the huge disruption and challenges caused by Covid-19, we believe Grafton has done as well as could have been expected," they said.
"We will review our forecasts and, given the recent trend, the outlook for this year appears more positive than what our estimates would indicate," Davy added.
