Dublin: Grafton Group, expects its interest bill to rise "very significantly" in coming months as it refinances chunks of debt that fall due this year.

Michael Chadwick, chairman made the comment as the company's annual general meeting yesterday, where the company revealed that turnover for the first four months of this year fell €22m, or 3.5pc year-on-year, to €617m. Shares in the company, rose by up to 7.5% during the day after it said trading in Britain had picked up after bad weather in January caused a slowdown.

Mr Chadwick declined to say how much debt the company was hoping to refinance, but agreed that the amount of additional interest to be paid will have a material impact on the group's results "in time".

Negotiations with lenders have been ongoing, but new arrangements regarding the debt were not expected to come into effect until the third quarter of this year.

Speaking yesterday after the AGM, Mr Chadwick said the refinancing being discussed involves a significant portion of debt repayable this year, and that the talks could include debt falling due later.

Grafton had total net debt of €322m at the end of December, including the equivalent of €113.4m in US dollar loan notes that are due to be re-priced by the end of June, according to its annual report.

They carried a floating interest rate of 1.4% while €39m of US dollar loan notes also due to be re-priced by the end of June carried a 1.13% interest rate. Euro-denominated loans with a 1.22% interest rate amounted to €235m at the end of December, and sterling loans valued at €108m are carrying a 1.44% rate. Both those tranches are also due to be re-priced by the end of June.

"Most of our loans were on floating interest rates," said Mr Chadwick. "We've been able to benefit from very low short-term interest rates. Unfortunately, the margins our bankers are looking for have gone up considerably."

Grafton posted a 26% decline in revenue last year compared to 2008 to €1.98bn, while its pre-tax profit slumped 79% to €13.6m. Its shares closed up 2.9% at €3.54.