Readymix, the Dublin-based building materials group, saw profits fall in 2002 as a slowdown in construction and restructuring costs hit the bottom line.

Operations in the Republic suffered particularly as pre-tax profits fell 16 per cent to €21.6 million on a 4 per cent fall in turnover to €212 million. Earnings per share fell 17.5 per cent to 16.14 cents.

The company described 2002 as "a challenging year" but said it had managed to cut debt levels despite lower sales and profits.

Borrowings fell to €28.8 million from €38.3 a year earlier, bringing gearing down 10 percentage points to 24 per cent.

Commercial and industrial markets were especially weak in the Republic, with only the residential market offering any relief, Readymix said.

The company took a €1 million charge to implement a restructuring programme in the Republic after a poor first-half performance. It entailed redundancies and the closure of several regional offices.

The company expects these measures to produce benefits in the current financial year.

An earlier restructuring in Northern Ireland is almost complete and the company says it is already reaping the benefits of the reorganisation.

Results in Northern Ireland were up on the previous year, while Isle of Man operations were steady.

Lower turnover in these markets was offset by greater efficiencies and market penetration.

The group was cautious on the outlook for 2003, pointing to continuing soft demand in the Republic and a more stable environment in the North.

The results were broadly in line with analysts' expectations and brokers said the company's balance sheet remained fundamentally sound.

NCB stockbroker's Mr John Sheehan said it was looking for a 10 per cent recovery in earnings this year. "Rationalisation should produce further benefits in 2003 as well as the non-recurrence of one-off costs," he said.

Despite the difficult conditions, the company is increasing the final dividend to 6.7 cent per share, a rise of 10 per cent.