Woodie’s owner to invest in digital as sales surge
GRAFTON Group expects to increase investment in its digital offering following a surge in online customers.
The company’s business here includes the Woodie’s DIY chain and building materials group Chadwicks.
In November last year, 50,000 online transactions were performed on the Woodie’s site – an increase of more than 800pc when compared to the 6,000 sales online in November 2019, according to Gavin Slark, CEO of Grafton Group.
“In terms of Woodie’s, we have very good geographical coverage in Ireland, and where we have seen most growth coming in Woodies’s over the past 12-18 months has been the online business,” Mr Slark told the Irish Independent.
“Probably where we will see some infrastructure and investment going into Woodie’s will be around digital capability and around fulfilment of online [orders] rather than extra stores in the short term,” he added.
Revenue from the Woodie’s arm of Grafton was £246.6m (€283.7m) last year – an increase of 17.5pc on the prior year, despite the chain being closed for 51 days during the first lockdown.
The performance benefitted from the large number of people working from home since the onset of Covid-19, which has seen increased investment in home improvement projects.
The company said 2020 was a year of “exceptional growth” for Woodie’s, that established new records for revenue, operating profit and the operating margin which increased by 600 basis points to 17pc, according to annual results.
Revenue growth was driven by demand for decorative products including paint, woodcare products and accessories.
Overall, revenue from continuing operations at Grafton Group, which also operates in the UK and the Netherlands, was down 6pc to £2.5bn (€2.9bn).
The fall in revenue reflected the impact of first-half branch closures in response to the pandemic, the company said.
Operating profit in continuing operations was down 6pc to £193.3m.
During the year Grafton generated record cash from operations of £377.7m.
Grafton completed three acquisitions in the second half of 2020 and another two so far this year.
Looking forward, Mr Slark said the company has been “very open” about trying to move into new geographic territories, however the curtailment in travel due to the pandemic has meant expansion plans had been paused.
“There were opportunities that we were looking at pre-Covid that went onto the backburner whilst we can’t travel, but as soon as travel becomes available again we will pull some of those opportunities forward and M&A is definitely part of our agenda,” he said.
“Principally around Western European countries, around Scandinavia, there is opportunities there.”
This will be a primary focus for the company “over the next 12-18 months as and when we can travel”.
In the seven weeks to February 21 this year, daily like-forlike group revenue at Grafton reduced by 1pc. In Ireland, there was a 12.7pc fall in revenue from the distribution business, affected by the temporary closure of non-essential construction.
Average daily like-for-like revenue increased by 40.8pc in the retailing business.
Commenting on the results, Davy analyst Flor O’Donoghue said: “Grafton bounced back in spectacular fashion in the second half [of 2020], with the final result comfortably ahead of expectations.”