Selco owner Grafton Group Plc (LON:GFTU) highlighted a positive start to the year through January and February, whilst noting weaker trading in March as a result of the extreme weather caused by the ‘Beast from the East’.
The adverse weather conditions and unseasonably low temperatures through March and into early April had a significant impact, the builders’ merchant said.
It reduced the rate of growth in average daily like-for-like revenue to 1.3 per cent, Grafton added.
Overall, in the four months to the end of April, the group said revenue increased by 7% to £907mln.
Grafton said its outlook remains positive and its full year expectations remain intact.
“We should continue to benefit from exposure to strong growth markets in Ireland and the Netherlands and, consistent with our view coming into the year, expect underlying demand in the UK RMI market to remain subdued but house building to perform strongly," said Gavin Slark, Grafton chief executive.
Liberum sees shares fairly valued
Liberum Capital analyst Charlie Campbell noted two negative comments in the trading updates - regarding high competitiveness in the UK, and, Selco’s slower like-for-likes.
“Two negative statements may have caught the eye of the market, on UK competitiveness and slower like-for-likes in Selco,” Campbell said.
“But in context, UK competitiveness is often cited, and the raised level may prove short lived, while Selco cannibalisation is in a sense deliberate as new branches add density to existing locations.
Campbell added: “We continue to see the shares fairly valued and leave estimates unchanged.”
** UPDATED to include analyst comments