Bathroom company warns of profit decrease

THE value of bathroom fixtures maker Qualceram Shires plunged by as much as a quarter yesterday after the company warned that profits this year are likely to be nearly 40% lower than in 2006.

In a trading update to shareholders yesterday the company said that the slowdown in housebuilding was impacting on sales and this would cut profits from €3.9 million in 2006 to €2.4m this year.

Shares in the Arklow-based company sank by as much as 23% on foot of the trading update. They recovered to end the day down 19%, or 25%, to close at €1.05.

The company had said at its interim results report in September that sales were slowing down. This trend has continued into October and the trend is likely to continue until the end of the year. As a result, group turnover is expected to be down by 8-9%.

It also said that higher interest rates, in both Ireland and Britain, were having an impact on sales.

“We continue to operate in the very challenging environment of increased competition, energy costs and interest rates, aligned with a noticeable slowdown in the Irish housing market,” chief executive John O’Loughlin said.

“Our focus is on the continued delivery of shareholder value. This is achievable on the basis of further cost improvements and management’s confidence in the group’s market leading brands, supported by an enhanced distribution network. Our balance sheet remains strong and we remain cash generative,” he added.

Qualceram said it was looking to reduce its cost base further, but gave no further details.