Grafton Group is set to continue cutting jobs this year after profits sank by more than fifth in the first half amid weakness in the UK property market.

The Dublin-headquartered building materials firm posted a 20.9 per cent fall in adjusted operating profits to £83.1million for the six months to 30 June, as revenues fell 4.4 per cent to just over £1.1billion.

FTSE 250-listed Grafton told investors on Thursday the decline was 'reflective of weaker market conditions' outside of its home market in Ireland.

The building materials sector has seen a substantial slowdown in trade as higher interest rates and poor consumer strength has hammered demand for new homes and domestic improvements, with rivals Marshalls, Ibstock and Travis Perkins also reporting a fall in profits.

Grafton said: 'In the UK, our markets remained weak, and repair, maintenance and improvement volumes were under pressure due to lower discretionary spending by households.

'Trading was also adversely affected by wet weather in the important Spring trading months.'

However, the firm said its UK manufacturing business had put in a 'resilient' performance thanks to 'active cost management to partially offset UK housing market volume declines'.

Cost base management has seen job losses, primarily within Grafton's UK distribution business.

Grafton said it would 'continue to' reduce its headcount over the second half of the year.

But while Grafton remains 'cautious' on the UK in the near-term, it said there are 'positive signs emerging of improving consumer confidence due to reductions in inflation and interest rates as well as an expected increase in real disposable income'.

It added: 'In addition, the new UK Government's determination to swiftly implement policies to encourage housebuilding should drive activity and increase construction demand which should improve the outlook for a recovery in volumes across our business.

Boss Eric Born said: 'Whilst uncertainties remain in the short term, our medium-term outlook remains positive, supported by strong demand fundamentals, not least in the demand for new housing as markets normalise and consumer confidence improves.

'At this point in the year, with the important Autumn trading season yet to come, we continue to anticipate delivering adjusted operating profit for 2024 in line with analysts' expectations.'

Grafton shares were up 0.9 per cent to £10.60 in early trading.