The owner of the Woodie's DIY, Home and Garden business said that trading in the two months to the end of December was ahead of expectations with group average daily like-for-like revenue up by 7.2% and total revenue ahead by 10.8% to £439.4m.
In a trading statement, Grafton Group said demand was strongest in the Woodie's and Chadwicks businesses in Ireland and in Selco in the UK.
Grafton said it was boosted by its strategy of investing in higher returning businesses and from households spending a greater proportion of disposable income on their homes.
Group revenue for the year from continuing operations declined by 6.1% to £2.51 billion due to a sharp decline in trading during the second quarter Covid-19 lockdown.
The company said this was significantly offset by a strong recovery in the second half of the year.
Grafton said it now expects it adjusted operating profit for 2020 will be slightly more than 5% ahead of current consensus of £174m as a result of the stronger than expected performance in November and December.
However its overall performance for 2020 will be lower than 2019 due to the significant impact of Covid-19 in the first half of the year, it added.
Gavin Slark, chief executive of Grafton Group, said the company was very encouraged by the strong recovery and performance of the group in the second half of the year.
"Despite the uncertainties related to the pandemic, we believe Grafton is well placed for continuing progress in the year ahead supported by our very strong financial and market positions," the CEO added.
The company said its financial position remains "very strong" with liquidity of about £800m at the end of the year.
Grafton said its Woodie's business here ended the year very strongly. This was despite some moderation in the rate of growth as anticipated from the exceptional levels of demand experienced in the months that followed the lifting of restrictions and reopening of the business.
Its Chadwicks business continued to sustain double digit growth in average daily like-for-like revenue during the second half of 2020 driven by strong demand in the residential repair, maintenance and improvement (RMI) market and growth in house building as transactions recovered.
Meanwhile, its Selco business in the UK continued to perform strongly with growth in average daily like-for-like revenue accelerating to 18.1% in the final two months of the year from 10.8% in the four months to the end of October.
