Grafton Group has exceeded market expectations with solid revenue growth, driven by robust performances in international markets, while UK demand remained subdued.
The building materials distributor and DIY retailer has reported a strong performance for the first half of 2025 in its latest trading update, with revenue rising 10.1 per cent year-on-year to £1.25 billion (HY1 2024: £1.14 billion), supported by strategic acquisitions and positive trading across several regions.
The group’s average daily like-for-like revenue growth was 2.4 per cent, with trading on the rebound after a slow start, and a slowed momentum in May due to geopolitical uncertainty.
In Ireland, distributor Chadwicks saw a 3.7 per cent increase, despite challenges from Storm Éowyn, buoyed by strong government policy support and a positive outlook for housing completions.
In the UK, however, like-for-like revenue was just 0.2 per cent higher, reflecting weak demand in the repair, maintenance, and improvement market, especially around London. However, the medium-term outlook remains positive, underpinned by plans to boost new housing activity.
Conversely, trading in Spain and the Netherlands showed robust growth, aided by strong project-related sales and “favourable market conditions”.
Meanwhile, in Finland, the group faced a 4.2 per cent decline, largely driven by weaker performance in the latter half of the period, prompting leadership changes at its IKH business.
Despite macroeconomic pressures and geopolitical uncertainty, the firm remains optimistic, forecasting medium-term growth driven by housing demand and ongoing government support for construction across its markets.
The group’s acquisition of HSS Hire Ireland and continued integration of Salvador Escoda in Spain are expected to further strengthen its position.
Eric Born, chief executive officer at Grafton said: “Though we remain cautious about the timing of a broader recovery, particularly in the UK and Finland where markets remain challenging, we remain very well positioned to capitalise on our market leading positions as the cycle turns,” he said.
“We continue to actively evaluate growth opportunities in all our markets and to strengthen our position both organically and, where appropriate, by acquisition using the strength of our free cash flow conversion and balance sheet.”
Its HY1 2025 results will be released in September.
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