Grafton Group, which has operations in the UK, Ireland and the Netherlands, and includes brands such as Selco, Buildbase and Leyland SDM, generated £810.9 million revenue from continuing operations in the five months to 31 May, 2020, down from £1.09 billion in the same period last year.
The decline was attributed wholly to the COVID-19 pandemic and the lockdown that it led to.
Up until the middle of March, Grafton was having a ‘solid start’ to the year. However, by the end of March, first quarter revenues were down 2%.
As national shutdown measures took hold, the company’s group revenue was down 80% in April.
As trading restrictions began to ease during May, most stores and depots reopened, or at least partially. Revenue in May was down 38% on 2019.
Grafton said that stores that have reopened have seen ‘encouraging’ levels of business but recognised that this may be more due to pent-up demand, rather than an accurate reflection of actual ongoing activity levels.
UK distribution
Selco reopened 42 branches initially on 6 May for Click & Collect and Click & Deliver trading only, whilst the remaining 26 reopened on 18 May. In a gradual return to a more normal operating environment, trading in the first 42 branches that reopened was extended to a full in-branch self-select service by the month end. The rest of the stores will be fully operational by 22 June.
The traditional UK merchanting businesses supported customers with branch collections and on-site deliveries of materials used mainly for outdoor residential RMI projects. The return of housebuilders to construction sites and the re-starting of commercial projects has been slower, Grafton said, so this segment of the market has seen a more gradual increase in activity.
Both Selco and Buildbase were able to process an increase in online orders, having upgraded their websites – Selco in February and Buildbase during lockdown.
Both Leyland SDM, the specialist decorators’ merchant in London and TG Lynes, a distributor of commercial pipes and fittings in London, remained open and traded well during the lockdown, Grafton said.
Irish market
Half of the Chadwicks distribution branch network in Ireland remained open during the lockdown for essential deliveries, only typically to support health and public sector projects and to provide emergency supplies to businesses and homes.
The business fully reopened on 18 May in the first phase of the Irish government’s roadmap for reopening the country and operated at two thirds of prior year revenue for the month. Demand has been largely driven by residential RMI projects with new home build activity expected to remain subdued.
Gavin Slark, chief executive of Grafton Group, said: “The restrictions introduced to contain the spread of COVID-19 had a significant effect on trading since the second half of March, and while there are many challenges to be overcome in the months ahead, we are encouraged by the early trading indications following the reopening of our businesses in the UK and Ireland.
“Grafton is in a strong financial position and, with a resilient portfolio of businesses, will emerge from this crisis well positioned for future growth.”
