THE buoyant construction market has boosted pre-tax profit at Readymix by 85 per cent from £2.1 million to £3.9 million, in the six months ended June 30th 1996. The group had the benefit of a two months profit contribution from the RMC Catherwood businesses which were acquired earlier this year. However, even if this is excluded, the underlying growth still amounted to 48 per cent.

Readymix also benefited from further cost savings, said managing director, Mr John McNerney. "If we get more efficient transport", he stressed, that could boost profitability. The group also had a "favourable mix of work which improved margins".

Sales grew from £19.7 million to £30.2 million. RMC Catherwood contributed £8.9 million. The operating profit margins excluding acquisitions improved from 10.6 per cent to 14.5 per cent.

There was "real buoyancy" in the Republic, according to Mr McNerney. Dublin is by far its biggest market and this was the strongest area. Cork was "disappointing" as there was an 8 per cent drop in volumes of blacktop. The midlands, however, showed an improvement.

Concrete was "marginally" up. Blocks were particularly strong but this product area, said Mr McNerney, was not a big earner.

The latest results show a £0.8 million profit contribution from acquisitions in the first six months. This contributed to a rise in earnings per share from 4.66p to 7.79p. The interim dividend is being raised from 1.20p net per share to 1.30p. Readymix remains in a strong financial position with a gearing of under 15 per cent.

Turnover and profits from Northern Ireland and the Isle of Man for the two months are in line with expectations following the acquisition of the RMC Catherwood businesses. Mr McNerney noted. "It is no secret that the margins in Northern Ireland tend to be lower" in a market which is more difficult than the Republic.

The acquisition of the businesses, said Mr McNerney, gives the group two additional geographical profit centres outside the Republic and enables the group to operate on an all island basis. It also provides it with a further profit centre based in the Isle of Man.

The financing of the £23 million RMC Catherwood acquisition by a mixture of shares and cash, led to a greater free float of shares. This, Readymix said, had already improved the marketability of the shares.

Readymix is looking for further growth in the second six months. Trading in July and August confirms the trend established in the first half. The group is talking to "one or two" small companies in the Republic which are not expected to make a material impact on the group. They will be "add on operations", he said.

The shares unchanged at 123p (12 months high 125p, low 90p) are on a prospective p/e of 9.8, assuming earnings per share rise from 10.4p in 1995 to 12.5p in 1996.