Builders merchanting and DIY group Grafton has reported favourable trading conditions for the first half of the year on the back of a steady recovery in the Irish and UK economies.

In a trading update issued on Thursday, Grafton said group revenues for the six months to the end of June rose by 11.3 per cent to £1.01 billion. This compares to revenues of £912 million for the same period a year earlier.

Grafton, which has operations in Britain, Ireland and Belgium and owns the Woodie’s DIY retail chain, said the group’s first-half financial performance is expected to show a significant improvement on last year “reflecting the strong flow through benefit to the operating profit margin of revenue growth in the UK and Irish merchanting businesses”.

"Our UK and Irish merchanting businesses have benefited from an improved market backdrop which, combined with our organic growth plans, means the group is well placed to build on its strong first half performance," said Grafton chief executive Gavin Slark.

Grafton’s DIY retailing business in Ireland benefitted from the early stages of a recovery in construction from “historically low levels of activity”, the group said. Its Woodie’s chain, which makes up 8 per cent of group revenue, “had benefitted from improving trends for retail sales” .

In the second quarter, like-for-like Irish merchanting sales rose by 18.6 per cent, compared to a 7.4 per cent rise in the first three months of the year.

Trading in the UK merchanting business, which accounted for three quarters of group revenue, was influenced by better weather conditions together with solid volume growth in the residential repair, maintenance and improvement market.

The overall economic and market backdrop in Belgium remained subdued with the acquisition in February of Mpro, a six branch builders merchanting business based in Brussels, accounting for most of the growth in total revenue, Grafton said.

Grafton’s interim results will be announced on August 27th.