Sales at Grafton Group's retail operations fell 12.4% to €98.2m in the first half of the year. Operating loss at the Irish DIY and kitchens businesses soared from €0.4m to €3.5m.

Grafton, which runs 40 stores - primarily Woodie's DIY - blamed "the combined effects of a decline in household spending and heavy rainfall in April and June which significantly reduced demand for gardening and seasonal products".

It added that retail spending in Ireland continued to decline "due to the weak labour market, downward pressure on incomes, public sector cutbacks and higher taxes."

However, Grafton noted that consumer confidence rose over the first half in response to signs of stabilisation in the wider economy.

Woodie's saw a 10% fall in transactions and a 2.4% drop in value per transaction. Wet weather in Q2 led to an 18% decline in sales with gardening the worst hit area. In H2, new ranges of power and hand tools, timber flooring, floor tiles and lighting introduced last year performed well and product ranges were broadened in a number of categories.

During the period, the Glasnevin, North Dublin City, and Blanchardstown, West Dublin, stores were extended and refitted. In June an examiner was appointed to Atlantic Home Care which operates 13 stores as part of the Grafton's DIY division, in order to allow a restructuring and survival of the business which has traded at a loss since 2007.

The examiner recently indicated that he expects to seek Court approval for a scheme of arrangement on or prior to 14 September 2012 which will include two stores closures. Since the period end, agreement has been reached with all but one of the continuing landlords to reduce store rents to current open market levels.

Revenues were marginally down in the eight store In-House kitchens operation. The business expects to benefit from the installation of kitchen display areas in the newly extended Glasnevin and Blanchardstown Woodie's.

Grafton Group, which includes its massive UK and Irish builders merchants operations, made an underlying pre-tax profit (before exceptional items and amortisation) of €23.8m (up 18.1%) on the back of turnover ahead 4.6% to €1.05bn.

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