Building materials group Heiton plans to open new Atlantic Homecare stores around the State in a bid to address "very strong" competition in the DIY market.
The company has also begun to move the Atlantic brand towards homeware, partly in reaction to the impact of DIY giant B&Q, which opened in the Republic last year.
Opportunities for store openings exist in parts of the greater Dublin area as well as in regional towns, Heiton chief executive Mr Leo Martin said yesterday.
Pre-tax profits at Heiton grew by 12.5 per cent to €11.6 million over the first half of this year, with strong growth in merchanting and better-than-expected contributions from new domestic acquisitions helping to cancel out underperformance in Atlantic and elsewhere.
Analysts welcomed the overall results, which came in slightly ahead of expectations.
Mr John Sheehan of NCB said the company had seen the benefits of last year's €4 million cost-reduction programme and was well-positioned for future growth, particularly in the Republic.
Mr Sheehan was cautious about company plans for expansion in the UK, however, noting that a pick-up in existing UK operations would be more beneficial. Turnover at Heiton's UK business contracted by 2.5 per cent in the first half, falling to €43.3 million.
Heiton continues to draw the bulk of its business from the Republic, where turnover grew by 12.1 per cent to €202.1 million in the period under review. When contributions from newly acquired Cork Building Providers and Wright Window Systems are stripped out, like-for-like turnover was 2.4 per cent lower than last year.
Mr Martin described 2002 as "the quietest and toughest construction market for many years".
Sales at Atlantic fell 9 per cent on a like-for-like basis in the six months to end-October, as the arrival of B&Q combined with poor summer weather and a lull in commercial activity during the World Cup.
Mr Martin said sales at Atlantic had recovered in the second half.
Turnover at builders' merchant, Heiton Buckley, which accounts for half of the group's business, was up 17.5 per cent at €23 million on a year-on-year basis, but like-for-like growth was negative.
The company foresees flat volumes across most divisions in 2003, forecasting a "sustainable level of housing activity" and a possible pick-up in National Development Plan works.
Heiton will award an interim dividend of 6.2 cents per share, a 7 per cent rise on the same period last year. Its shares closed down one cent at €2.17 last night, having lost a morning gain of almost 8 per cent.
Mr Martin admitted yesterday that the board was unhappy with its recent share price history, adding that efforts were being made to address it.
Evidence of this came last night when Heiton informed the Irish Stock Exchange that three directors - Mr Richard Keatinge, Mr Philip Lynch and Mr John Bourke - had purchased a total of 51,000 shares in the company at €2.35.
