Grafton Group Plc (LON: GFTU) have issued a statement warning shareholders that profits may be significantly lower than expected.
Grafton Group plc is an international distributor of building materials to trade customers and has leading regional or national positions in the merchanting markets in the UK, Ireland and the Netherlands.
In this mornings press release, Grafton announced they would miss annual profit expectations as the UK construction sector comes to grips with Brexit uncertainties.
The report from Grafton follows a similar line from others in the industry.
Last week, SIG plc (LON: SHI) a smaller operator said profit targets would be missed, as a battle of weak demand and weak economic outlook troubles the industry.
Shares of Grafton have been trading have dropped 9.75%, trading at 784.2p per share. Additionally, market competitors such as Travis Perkins Plc (LON: TPK), Howden Joinery Group Plc (LON: HWDN) and Kingfisher Plc (LON: KGF) all saw their shares slide.
The Irish company added that trading had been slow despite a good performance in the home market.
Gavin Slark, CEO of Grafton Group Plc commented “Recent trading conditions are more reflective of market sentiment than business fundamentals. Grafton remains well placed to continue to benefit from our strong market positions in Ireland and the Netherlands and from a recovery in the UK merchanting market. The Group continues to focus on optimising trading opportunities in its markets, on cost control and cash generation and has a strong balance sheet to support value enhancing acquisition opportunities.”
Additionally, Grafton said that demand for materials has been hit by legislation in the Netherlands, with limits Nitrogen emissions. This has delayed the granting of permits for new construction periods.
Grafton operate across the the merchanting, retailing and manufacturing sectors have speculated full year profits of £193.5 million, significantly lower than expected.
The FTSE250 company concluded, that there was signs of recovery with an encouraging start, but trading towards the end of the quarter had been impacted by sombre activity.
In other shares news, updates have been provided for Moneysupermarket.com Group Plc (LON: MONY), Serabi Gold Plc (LON: SRB) and Blue Star Capital PLC (LON: BLU).