Builders merchanting and DIY group Grafton Group has reported big jumps in both profits and revenues for 2021 as it saw a record contribution from its businesses in Ireland.
Revenue for the year to the end of December jumped by 25.6% to £2.110 billion from £1.679 billion the previous year, while adjusted profit before tax soared by 83.5% to £268.6m from £146.4m in 2020.
Grafton said the results were slightly ahead of expectations after it saw "very strong" performance across all businesses, with record contributions from its Woodie's DIY chain in Ireland and its Selco business in the UK.
It said the Woodies chain was boosted by the "exceptional" level of demand in the first half which eased following the reopening of non-essential retail during the Covid crisis.
The Woodies business made exceptional gains in the four months to the middle of April with revenue soaring by 69.7% on the same time in 2019.
Grafton noted that demand was very strong across all categories including core products and fast moving lines.
The rate of revenue growth at Woodies then eased very marginally over the remainder of the first half after the full reopening of non-essential retail and other elements of the economy in May, it added.
Demand remained strong through the second half of 2021 although the rate of growth moderated as expected from the post lockdown highs of 2020.
"While market conditions continued to normalise, Woodie's maintained a step change in performance with exceptional revenue growth of 21.7 per cent compared to the second half of 2019," the company added.
Meanwhile Grafton's Chadwicks business here operated at lower levels of activity from early January to mid-April as a phased re-opening of the construction sector including house building got underway.
But May and June saw a spike in demand in the residential RMI and house building markets significantly boosting profitability in the first half, it added.
It noted that Chadwicks saw the highest levels of activity since 2008 on the back of an increase in confidence among households leading to increased spending on home maintenance and improvement projects and the reopening of house building sites.
The company has proposed a final dividend for 2021 of 22 pence per share, which gives a total dividend for the year of 30.5 pence per share.
During the year, the company sold its Traditional Merchanting Business in the UK for £520m, which it said provides it with further investment capacity for growth.
It also bought the IKH business in Finland for €200m which will provide it with a new growth platform in the Nordics.
Grafton also noted that supply chain disruption resulted in shortages of core building materials, longer lead times, managed allocation for selected products and a sharp increase in product price inflation across a range of categories in the distribution businesses in the UK and Ireland.
It noted that the overall rate of building materials price inflation appears to be moderating but there is a carryover effect from price increases in the second half of last year.
The pricing of certain key products, such as timber and steel, may prove volatile in 2022, it added.
Grafton's chief executive Gavin Slark said that 2021 saw record profits, a step change to higher returning businesses following the divestment of its Traditional Merchanting business, exposure to a new growth platform in the Nordics and increased focus on digital and sustainability opportunities.
"Our people have been a key differentiator in delivering safe and superior customer outcomes throughout the pandemic and in mitigating supply chain challenges at a time of resilient demand in the broader repair, maintenance and improvement and DIY segments in our markets," Gavin Slark said.
"Trading year to date has been encouraging and the outlook for 2022 is positive, supported by strong housing and RMI markets, the inherent strength of our businesses, our strong balance sheet and future investment opportunities," he added.
Grafton said that the recent wave of the Covid-19 pandemic has been less severe than previous waves and the restrictions now in place in the four countries where it operates have either been reduced significantly or reducing.
"The business is performing in line with management expectations at this early stage of the financial year and we look to the future with confidence given the strength of our businesses, strong balance sheet and future investment opportunities," it added.
