'Challenging year' hurts Qualceram

BATHROOM products manufacturer Qualceram Shires plunged into losses last year following very difficult conditions in the British market.

As a result net losses, after restructuring costs of over €6 million, hit €5.1m for the year ending December 2005 in what the group described as "another challenging year".

That figure rises to €6.6m when the dividend payment of over €1.2m is taken into account and compares with profits retained in the last financial year of €3.8m.

Group turnover was down 2.4% at €95.8m, which the company said was mainly due to competitive pricing, especially in the British market.

Turnover in Ireland rose to €42.6m from €41.7m. In Britain turnover fell from €51.2m to €47.5m.

In its statement with the results the group said the restructuring at its Longton plant in Britain resulted in an exceptional charge of €6.1m which did most of the damage to the bottom line for 2005.

Operating profits before expenses and the exceptional charges came in at €1.4m, compared with €4.76m in 2004.

Despite the subdued housing market in Britain, group sales in then first quarter of 2006 are ahead of the corresponding period in 2005, the company said.

Looking ahead the group said it is still "cash generative and the balance sheet remains strong. The board is confident that the measures now in place will deliver improved results in 2006".

Shares in the group fell by over 2.3% to €1.25, a dip of 3 cents on the day, suggesting the market expects the turnaround to be somewhat slow in the current year, despite the healthier indications in the early months of the current year.