Builders Merchants Grafton Group have announced a sales figure of €944m for its UK and Irish operations.

The figure, which reflects an 8% fall compared with the ‘strong performance’ for the same period in 2007 was attributed to the adverse translation impact of a twelve per cent decline in sterling against the euro, the Group said.

Grafton, who also operates in the DIY market, attributed falling sales for their Retailing business to the subdued retail environment and poor weather conditions experienced in the first months of 2008.

The new store in Carrick-on-Shannon which opened in March traded ahead of expectations.

In the UK market, the residential repair, maintenance and improvement (RMI) sector demonstrated resilience despite lower investment and spending on housing due to tightening in the availability of finance secured on property.

The Group's UK Merchanting business experienced positive trading conditions in the first quarter with low single digit growth in like for like sales.

Growth in the UK economy is expected to moderate and the RMI market is likely to become more challenging as the year develops.

"Contributions from acquisitions and scale related sourcing and cost synergies should help limit the impact on profit of market weakness.

 In Ireland low growth in the economy is forecast due largely to the downturn in the residential construction market and slowdown in the international economy.

A programme to achieve scale related synergies and bring costs more into line with lower volumes without compromising the market positions and medium term prospects of the Group's businesses is ongoing.

The Group's strong financial position and cash flow leave it well placed to cope with these more challenging markets," Grafton said.