Builders' Supplier Grafton 2006 EPS Up 15%

Irish building supplies firm Grafton Group posted a slightly better-than-expected 15% rise in 2006 earnings on Thursday and said it was confident about the future after a satisfactory start to 2007.

Earnings per share (EPS) rose to 78.0 euro cents ($1.03) once adjusted to exclude amortisation and property profits which compared with 67.8 cents the year before and the 76.0 cent average forecast in a Reuters survey of six analysts.

Grafton had said in December that it expected 2006 earnings to meet market forecasts, due to continued strong trading in Ireland and improvements in Britain in the second half where Grafton generates more than half its revenues.

The owner of builders and plumbers merchants on both sides of the Irish Sea, which also makes mortar in the UK and runs DIY stores in Ireland, said the start to 2007 had been "satisfactory" and that it was confident about the future.

In Ireland, Grafton said it expected stable demand from the residential construction market as house building softens from current record levels but that an upbeat Irish consumer should ensure growth in the repair and home improvement market.

"High levels of consumer spending and a slowdown in new capacity in the Irish DIY market should enable the Woodie's DIY and Atlantic Homecare businesses to make further progress and also to benefit from last years store openings," the company said.

In the United Kingdom, Grafton said a steady economy meant it expected the improvement seen in the repair, maintenance and home improvement (RMI) market in the second half of 2006 to continue.

"The level of mortgage approvals and housing transactions ... is also encouraging," the company said, adding that employment growth and a confident British consumer should also help.

"These factors should sustain good levels of RMI activity although the recent round of interest rate increases may lead to some moderation in demand."