Readymix expects further difficulties this year

BUILDING material group Readymix said trading conditions have deteriorated further this year.

The company said demand for its products continues to decline, with revenue from operations down 24% against the same period last year, resulting in operating losses of €7 million.

Annual revenues in the Republic fell 33% while in Britain, group sales fell 8.5%.

The company expects its future priority will be further cost cuts, while it is also looking at selling off some of its assets. It is anticipating “very demanding” trading conditions to continue into next year.

Davy Stockbrokers said the trading performance in the first half of the year was broadly as expected, so it is not be adjusting its forecasts.

Goodbody analyst Robert Eason said difficult trading is expected to continue because of “continued weakness in residential and commercial markets and uncertainty of timing of new infrastructure projects”.

Readymix reported a pre-tax loss of €20.4m for the first half of 2011. It took exceptional charges of €12.6m.

Impairment costs relate to recent plant closures, future plant closures and the further general deterioration in the aggregates market.

This was partly offset by a €2.9m once-off gain due to the closure of defined benefit pension schemes in Ireland.

In view of the “adverse outlook” for revenues and in order to conserve cash resources the company said it is not recommending a resumption of dividend payment.