Shares in Grafton Group, the building products and Woodies DIY company, jumped by €1 to €20.50, adding €16.8 million (£13.2 million) to the value of the company, following better-than-expected interim results. Pre-tax profit grew by 33 per cent to €15.4 million (£12.1 million) in the six months to June 30th, 1999. This is likely to lead to an upgrading of brokers' profit forecasts. Further growth at Grafton, now capitalised at €344 million (£271 million), is anticipated in the second six months, but it may be at a somewhat lower rate.

Executive chairman, Mr Michael Chadwick said he could make no comment on the group's purchase of a 12.1 per cent shareholding in rival building products company, Heiton Holdings. It bought the shares at an average of €2.67 and they are now trading at €3.10 giving it a paper capital profit of some €2.5 million.

He said Grafton was actively seeking "profitable growth across its market". It will continue to make acquisitions and a further takeover is expected before the end of the year. Shareholders are to get a big boost with the interim dividend rising by 40 per cent to 18.7 cents. Earnings per share also grew by 40 per cent to 84.4 cents. Gearing amounts to 54 per cent. Sales grew by 46 per cent to €285 million.

Grafton recorded growth in all its Irish and UK divisions but sales of its businesses in Britain and Northern Ireland have outstripped those in the domestic market for the first time.

Sales in the Republic increased by 14 per cent from €115.3 million to €131.3 million while operating profit rose by 15 per cent from €11.1 million to €12.7 million.

Sales in Britain and Northern Ireland soared by 91 per cent to €153.8 million from €80.6 million, while operating profit trebled from €2.4 million to €7.1 million.

The growth in the Republic, Grafton said, reflected "market leadership positions in a positive construction environment". Margins were maintained at 9.6 per cent.

Like others in the building products business, the results would have been better but for the scaffolders' strike in the second quarter. Irish merchanting and wholesaling turnover increased by 15 per cent to €92.4 million. This division benefited from the opening of Chadwicks branches in Limerick and Walkinstown, Dublin.

CPI, the manufacturing division, had similar sales of €11.8 million but profits increased. While CPI did well in the first quarter, its business was hit in the second quarter by the scaffolders' strike.

Woodies increased its sales by 16 per cent to €27.2 million "with strong performances across all 10 stores". Further sites are being sought to expand the DIY division. The virtual doubling of turnover in Britain and Northern Ireland was attributed to "our aggressive acquisition programme and substantial like-for-like sales growth". The builders merchanting division now spans 49 branches.

In Belfast, builders merchants Macnaughton Blair successfully integrated its 1998 acquisitions in Antrim and Coleraine, Co Derry and recorded increased profits. The three silo mortar plants in Britain "traded strongly during the period with all plants performing profitably".

Grafton spent €47.4 million on acquisitions, investments and capital expenditure. This included the takeover of Niall Bailey Building Suppliers, the investment in Heiton and the development of the EuroMix mortar operations.