Builders merchant and DIY chain Grafton Group has released its trading update for the six months to June 30, and, as expected, the news isn't good.
The update opens with the news that "as previously announced...the group continues to experience the most challenging trading conditions in decades...the group's profitability has been impacted severely."

In fact, turnover for the six month period was down 31% to €990m compared witth the same period in 2008. However, the DIY retail arm of the business (Woodies DIY and Atlantic Homecare in the Republic of Ireland) has performed more strongly than the merchanting business, seeing falls of 18% compared with 24%. It is the company's manufacturing activities that have been hardest hit with revenues dropping 49%.

A cost cutting drive is likely to result in an overhead reduction of €70m rather than the previous estimate of €55m and all acquisition activity has been halted.

There may however, be a glimmer of hope on the horizon with a recent recovery in exchange rates and the news that mortgage approvals appear to be in the increase. The group's statement said: "The group has now entered the seasonally stronger trading period of the second half of the year during which it expects to return to modest levels of profitable trading across the group."