LONDON (ShareCast) - (Sharecast News) - Builders' merchant Grafton Group said on Tuesday that it will close all of its UK distribution branches and manufacturing plants for the next three weeks as it warned that the outbreak of the coronavirus will dent revenue and profit, withdrew guidance and suspended its dividend.
The company said trading in the year to date has been broadly in line with its expectations and branches have generally operated at normal levels of activity, with limited impact on the supply chain due to virus. There was some evidence over the last week of stronger demand in a number of its distribution businesses and in the Woodie's DIY, home and garden business in Ireland due to forward buying.

However, the outbreak will "inevitably" lead to a "material" decline in revenue and profitability over the coming months, it said.

"There is no previous experience of a similar pandemic and its likely extent and duration is unclear at this stage. In view of this uncertainty, it is no longer possible to provide financial guidance for the remainder of the current financial year ending 31 December 2020."

Grafton said its UK business expects to avail of the Governments Job Retention Scheme, while its cashflow will also benefit from other government measures.

The company said it was "well placed" to withstand a period of uncertainty and will be implementing a range of precautionary measures to preserve its liquidity, including the suspension of its second interim dividend for 2019. This will preserve ?30m of cash in the business.

Chief executive Gavin Slark said: "Grafton is in a strong financial position with excellent liquidity and I am confident that the group will emerge from this period of uncertainty in a position of strength."

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