The Sheffield-based firm said that public sector building projects and environmental building regulations helped to boost sales despite a slow down in the construction industry.

Group sales for the six months ended June 30 were £1.4m - an increase of 9.3 per cent on the first half of 2007.

Like-for-like sales growth was achieved in all countries with the exception of Ireland, with sales of insulation and related products performing particularly well in the UK thanks to higher thermal performance standards required by new building regulations and the introduction of the Carbon Emissions Reduction Target (CERT) programme.

The group, which has completed 24 acquisitions in the first half resulting in the addition of 61 new trading sites, reported a slight fall in profit before tax from £56.1m for the same period 2007 to £55.7m.

Basic earnings per share was 29.2p - a drop of 5.8 per cent. However, the like-for-like interim dividend increased to 8.3p from 8.0p.

Chairman Les Tench said: "This is a solid performance from the group against a background of some challenging conditions. Around two thirds of the group's sales are made into the non-residential building and industrial (non-construction) sectors, which include both public and private long-term projects. Demand from these sectors has remained robust in all countries in which SIG trades and has helped offset reduced construction activity in residential markets."

He added: "SIG has been through periods of reduced demand in various markets many times in the past. As well as the resilience provided by its exposure to a broad range of market sectors and countries it has the proven management expertise and the experience to enable it to outperform in challenging market conditions, and remains confident of further progress"

Mr Tench said the group was mindful of the likelihood that trading in some of its markets may become more challenging over the coming months and it has been actively taking steps to realign its cost base in those markets where medium term demand is expected to remain subdued.

He added the UK non-residential construction market was holding up much better than residential, especially public funded works related to hospitals, schools and infrastructure, and leading contractors continue to report solid order books through 2008 and 2009.

Additionally, demand for insulation products continues to perform better than other building materials due to a combination of regulatory, environmental and economic drivers throughout all regions in which SIG trades, he said.

He added the group's approach to acquisitions would be 'cautious and highly selective' in the current market environment.