As soon as the UK stock market opened on Friday morning 24th June, home improvement company stocks took a beating as the implications of Brexit began to sink in. The historic referendum resulted in 52% voting for the UK to leave the EU, whilst 48% voted to stay. The results sparked a dramatic overnight fall in the value of the pound, dropping as low as $1.32 against the US dollar – the lowest since the 1980s.
Although it remains to be seen what the full impact on Irish business will be, the Grafton Group dropped 19.5% in the UK along with Travis Perkins at almost 14% and Kingfisher by 8% by midday on Friday. We asked a number of HAI members and non-members what their reaction was to the news which did come as a surprise:
Ann Morgan, MD of Murdock Builders Merchants based in Newry said:
“We anticipate no significant effect on our Group other than a bit of currency fluctuation which we believe will bed down in the short term. Exports from our NI Company to our ROI Company in the past 3 years have been minimal and largely hedged naturally with supplier payables anyhow. Time will tell whether the vote generally will have an impact on construction / house building, but our view is that people will adjust and move on.”
Leonard Hamilton, MD of Décor Ireland, based in Lisburn and Dublin:
“I guess my immediate concern is how the question of border controls will be handled, particularly from the point of view of shipping goods from Northern Ireland to the Republic of Ireland. As we endeavour to keep our delivery times as short as possible anything that would extend shipping times would be detrimental to the service we offer. Obviously currency instability is also a concern, particularly when considering GBP/USD. This will affect prices of products imported from the US and Far East and will have to be kept under close review.”
For the retail sector, people from the Republic could start coming back to seek out bargains in Northern Ireland, taking advantage of the pound’s weakness.