The Group's revenue rose by 3% to €2.05 billion, generating an underlying growth in profit before taxation by 3% to €42.3 million.
Chief executive officer Gavin Slark commented: “The turnaround in performance that commenced in 2010 continued in 2011 in challenging markets with savings realised from cost reduction programmes. The Group is well positioned to make further progress in what we believe will be subdued markets in 2012. We will continue to focus on margin enhancement, cost management and cash generation and evaluate value adding expansion opportunities.”
Grafton reported a 3% rise in underlying pre-tax profits on turnover up 3% to €2.05bn for last year and operating profit was up 13% to €54.7m. There were exceptional costs of just over €32m, linked to restructuring costs and what Grafton called "onerous leases" - mainly in Ireland - which brought pre-tax profits down to €10.3m.
It remained weak, however, because of a fall in disposable incomes and weak consumer confidence, which contributed to lower spending on housing repair, maintenance and improvement projects. Grafton has increased its dividend to 4.75 cent, giving a total of 7.5 cent for the year, up 7.1% on 2010. In Grafton's UK merchanting business, profits before restructuring costs rose 3.5% to €59.9m on 4% higher turnover of €1.46 billion. UK trading was affected by weak economic growth and subdued consumer confidence. In the Irish merchanting business, profits increased by 12.5% to €4.1m, despite a 6.4% fall in turnover to €306.8m. Grafton said this was due to a "significant" reduction in costs, including job losses.
Turnover in the retail business fell 4.7% to €219.7m and profits dropped more than 12% to €2.1m. Grafton said the Woodie's business had a strong start to the year, helped by better weather conditions in the first four months that brought forward sales of gardening and seasonal products. But these early gains were more than offset by tougher trading conditions in the important months of May and June. Turnover in Grafton's manufacturing business rose almost 10% to €47.5m, reducing losses to €540,000 from €3.5m in 2010.