Builders merchant Grafton Group suffered plummeting revenues during the first three months of the year, which it has attributed to lower spend on housing repairs, poor weather and the falling value of the pound.
The group today said it was facing “the most challenging trading conditions in decades” as it reported a drop in quarter one turnover from about £420 million last year to just £224 million for 2009.
It said: “The reduced availability of credit which has become apparent over the last two years has led to significantly lower investment and spending on housing and residential repair, maintenance and improvement.
“The trading environment so far this year was very much weaker than the group experienced in the first four months of 2008. As expected housing starts and completions have fallen and, combined with lower RMI spending, have significantly impacted the Group’s merchanting and manufacturing businesses.
“Sales have also been affected by the poor weather in the early part of the year and the 15 per cent decline in the average value of sterling against the euro in the period.“
Despite posting grim trading results, Grafton – prior to its annual general meeting today – forecast an improvement in the latter part of the year.
It said the seasonally strong trading period coupled with a reduced cost base could allow it to achieve savings of almost £50 million over the year.
The group has also announced former non-executive chairman of Mowlem and director of Travis Perkins Charles Fisher as a non-executive director, starting next month.
He replaces Peter Wood, who has resigned for “important personal and family reasons”.