Grafton reported sales of more than €1.4 billion in the first half of this year, ahead of the year-earlier period, and said earnings were in line with market expectations.

However, comments within yesterday's trading update highlighting the Irish DIY market's slow start to the year and a softness in the UK arena caused some concern in the market and helped to push the stock down more than 4 per cent on what was already a weak day.

Despite the guarded comments about the start of the year, the building materials group said that recent trading in the Irish DIY market had been stronger and that business was also being helped by the addition of two new stores, which were both performing in line with expectations.

On the whole Grafton said the trading environment in Ireland was favourable and was helping to compensate for the softer conditions in the UK. In Ireland the group benefited from increased sales at its merchanting business, as both its Chadwicks and Heiton Buckley divisions performed well.

It also saw the first full six-month contributions from Davies and Garvey's, the two Irish merchanting groups it bought in December.

Revenue from the UK business was more than €800 million in the first half, slightly down on the year-earlier period on a like-for-like basis, Grafton said.

Analysts welcomed the statement, saying the details were pretty much as expected and that they would be leaving forecasts for the year unchanged. Most shrugged off the share decline, attributing it to generally poor market sentiment. The shares closed down 45 cent at €10.10.

As usual, growth was a key feature of the period for Grafton, with the opening of 10 new outlets, including eight merchanting branches in the UK.

The company spent €35 million on seven acquisitions in the period, including Fleming Holdings, the leading independent Scottish builders and timber merchant. It also made more than €25 million on property disposals.