Building materials and DIY group Grafton has posted a 30 per cent jump in pre-tax profits for the first half and told investors to expect a similar performance for the full year.
The growth, which was drawn in large part from Grafton's expanding UK operations, lifted pre-tax profits to €54.3 million.
This came as turnover rose by 29 per cent to €911.4 million and operating profits increased by 31 per cent to €69.9 million.
With three quarters of Grafton's turnover and profits drawn from the UK over the first half, executive chairman Mr Michael Chadwick said the results endorsed the firm's strategy of development in that market.
Grafton is confident, Mr Chadwick said, of its prospects for the rest of the year. He highlighted the firm's strong cashflow over the first half, pointing to a "healthy pipeline of bolt-on acquisitions".
Mr Chadwick declined to comment in detail on Grafton's €336 million takeover move on smaller rival Heiton, but he confirmed that other, smaller acquisitions were likely before the end of the year.
The UK market is again the main target on this front, with Grafton having spent €32.4 million on six small acquisitions outside the Republic over the first half.
Acquisitions made in 2003, including the €131 million purchase of Jackson's, helped to push UK operating profits ahead by 41 per cent to €14.6 million in the six months to the end of June.
"We see ourselves growing very strongly in that market," Mr Chadwick said. Grafton's UK business is driven mainly by housing repairs and maintenance, which has in turn been fuelled by a rash of television series on the topic.
Profits in Grafton's Irish operations grew by 10.7 per cent to €19.7 million, although the performance was tempered by a weakening in margins from 9.7 to 8.9 per cent.
Mr Chadwick attributed this in part to the impact of higher oil prices on the firm's plastics manufacturing business and intense competition in the concrete market. The cost of opening two new Woodie's stores also made a dent in margins, he said, predicting that the fall would be recovered in the traditionally stronger second half.
Mr Chadwick said the firm was "happy" about the prospects for the Irish economy, although he acknowledged that housing construction may moderate over the next few years.
Grafton is expected to compensate for this by increasing its Irish DIY and repair sales over the longer term.
The firm's Irish merchanting arm, Chadwick's, grew sales by 22 per cent to €138.8 million in the six months to June, boosted by the late-2003 acquisition of Telford's in the midlands.
Shares in Grafton, having gained almost 10 per cent since mid-August, closed 15 cents weaker at €7.20 last night.
The firm will not pay an interim dividend but it will redeem one redeemable share per each Grafton share (the group issued 10 redeemable shares for each share in 2002) for six cents per share.
This represents a 33 per cent increase on last year's first-half payment.
