Trading Update

Grafton Group PLC
14 July 2006


                               Grafton Group plc

              Trading Update for the Six Months Ended 30 June 2006


Group turnover for the first six months of 2006 exceeded €1.4 billion and Group
earnings continue to be in line with market expectations.

As expected, the favourable trading environment in Ireland continued to
compensate for the softer trading conditions experienced by the Group in the UK.
Increased like for like sales in the Irish merchanting business were driven by
good growth in both Chadwicks and Heiton Buckley. Davies and Garvey's, the two
Irish merchanting businesses acquired in December 2005, showed positive growth
in their first full six months trading under Group ownership. The Group
experienced a slower start to the retail season in its Irish DIY businesses but
recent trading has been stronger. New DIY stores opened in Castlebar and Navan
during the period are performing in line with Group expectations.

Group turnover in the UK was over €800 million for the six months. However, as
previously indicated, like for like sales were modestly down on the
comparatively strong first six months of 2005. UK macro economic indicators have
been positive for the RMI sector for some time and UK merchanting sales were
relatively stronger in the second quarter compared to the first quarter. The UK
mortar market continues to grow although it remains very competitive.

The Group continued to grow organically in the first half, opening ten outlets -
two Irish DIY stores and eight merchanting branches in the UK.

Seven acquisitions were completed in the UK during the six month period for a
total consideration of €35 million. These added 16 branches, expanding the
Group's branch network to over 500 trading locations. The businesses acquired
included Fleming Holdings Limited, the leading independent Scottish Builders and
Timber Merchant with eight branches.

The Group has continued its property disposal programme and expects to report
profits on disposals, including the Atlantic Stillorgan property, in excess of
€25 million for the period.

The Irish merchanting and DIY markets remain strong. Recent trends in UK
merchanting suggest an improvement in trading during the second half. The Group
remains confident of continued growth in profits and earnings per share in 2006
and is well placed to participate in further consolidation of the Irish and UK
merchanting markets and to take advantage of organic growth opportunities.

                                                                14th July 2006

Enquiries:
Michael Chadwick                       Joe Murray
Executive Chairman                     Murray Consultants
Grafton Group plc                      Telephone:(++353) [phone]
Telephone: (++353) [phone]

Colm O Nuallain                        Ginny Pulbrook
Finance Director                       Citigate Dewe Rogerson
Grafton Group plc                      Telephone: (++44) [phone]
Telephone: (++353) [phone]




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