Builders merchant and DIY group Grafton said turnover and operating profit rose in the first half of the year, but conditions remained difficult.

The latest figures showed group turnover gained 3 per cent to just over €1 billion, while operating profit before restructuring costs and amortisation was 40 per cent higher at €26.2 million for the period.

Group profit before taxation, amortisation and restructuring costs increased by 16 per cent to €20.2 million

Restructuring cost the company, which owns the Woodie's and Atlantic Homecare chains, some €4 million, compared to last year's figure of €2.9 million.

The group's merchanting unit saw business rise 4 per cent to €872.9 million, and operating profit was 22 per cent higher at €33.4 million, before restructuring costs. In the UK, turnover rose by 5 per cent to €712.7 million, and operating profit climbed 14.1 per cent to €31.9 million.

Cost cutting measures helped improve the performance of the group's Irish merchanting and DIY retailing businesses, against a backdrop of continued weakness in the market. Turnover fell by 7.2 per cent to €149.4 million, but operating profit before restructuring costs rose to €1 million, from €500,000 a year earlier.

Grafton's UK business increased operating profit against the backdrop of a market that experienced a small contraction in volumes.

"The group is well placed to deal with the continued difficult trading conditions in our core markets," said chief executive Gavin Slark.  "A number of self help initiatives have been identified that will enable us to improve our performance in margins, costs control and cash generation. This leaves us in a strong position to take advantage of any economic upturn or expansion opportunities."

Grafton shares gained 0.3 per cent to €2.71 this afternoon in Dublin.