Executive Chairman Michael Chadwick

Building materials group Grafton today has reported a 73% fall in pre-tax profit to €64m in 2008.

Adjusted earnings per share declined 62% at 32.2 cent.

Overall the group's revenues fell by more than 16.5% to €2.67 billion. Turnover in Ireland fell by 20% to €986m last year, with DIY store sales down 11%. UK sales dropped by just 1% to €1.34 billion.

UK profits more than halved to €68m, while Irish profits dropped by 73% to €33.5m.

In the year, 63% of turnover was generated in the UK and 37% in Ireland.

The company was affected by both the economic downturn and by sterling's weakness against the euro. However, the company reduced its net debt by more than €100m to €436m, helped by sterling's weakness.

Michael Chadwick, Executive Chairman said:“ We are operating in difficult economic circumstances and management is continually reassessing its response to changing conditions. We are taking actions proportionate to the challenges faced in the UK and Irish markets. In the current year, we will maintain our focus on cost control, operational efficiencies and cash generation and implement deeper cuts to overheads where demand continues to contract.

Trading in January and February continued to decline, made worse by the heavy snowfall. We expect to continue generating strong cash flow, retain good liquidity and maintain our secure funding position.

The Group will also benefit from ongoing working capital management and a lower interest rate environment. We have the benefit of a strong balance sheet and moderate gearing.

Grafton’s businesses have strong market positions and brands in the UK and Ireland and expect to emerge from the current market downturn as more efficient enterprises well placed to take advantage of growth opportunities. While conditions in the financial and credit markets make the timing and nature of any recovery uncertain, both economies have been resilient to past economic shocks and will eventually recover from the current downturn.”

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