Ceramics firm shares plunge by 5%

QUALCERAM SHIRES saw 5% wiped off its share price yesterday after the struggling bathroom ceramics manufacturer reported gloomy first-half results.

The Arklow-based company delivered pre-tax losses of €3.4 million for the six months to June, down from profits of €3.6 million in the same period last year. Once-off charges of 6 million that related to restructuring and redundancy costs were largely to blame for the poorer bottom line.

The company shed 220 staff earlier this year with the closure of a plant in Stoke-on-Trent in England.

But there was also disappointing news on the company’s operating performance, as operating profits slipped from €3.6 million to €2.9 million. Turnover was 6% lower at €49.7 million thanks to a struggle to maintain market share in the face of stiff competition in Britain.

Chief executive John O’Loughlin said the first half had been challenging and blamed the bad news on “intense” competition and weaker housing and home improvement markets in Britain and Ireland.

But he was upbeat on the company’s future prospects. “Despite current challenges, many of which are outside the group’s control, we are confident, with the backing of a strong balance sheet and a highly cash generative business, of adapting to current and anticipated market forces to ensure the group remains on a strong footing,” he said. He added that the benefits of this year’s restructuring would not kick in until next year.

Chairman Peter Addison said the group was likely to benefit when the Government’s SSIA scheme began to deliver windfalls to savers from next year, allowing them to spend more on home improvements.

But rising energy prices would push up manufacturing and distribution costs, he said. There was also a need to take action to deal with the increasing competitive threat posed by imports from low-cost economies in eastern Europe and China. “The group has anticipated these changes and implemented an action plan which is near completion,” he said.