Qualceram first-half profits down on last year

BATHROOM FITTINGS company Qualceram warned yesterday that first-half profits would be 30 per cent less than the €1.6 million it reported last year.

In a statement issued to the stock exchange, Qualceram said that the building slowdown in Ireland and Britain and sterling's decline against the euro had cut 30 per cent off its turnover in the first three months of the year.

The company said that falling sales were having an "associated impact" on its trading results.

"Current trading has followed the pattern of the first quarter to 31st March 2008," Qualceram said in its statement.

"Accordingly, the group expects group turnover for the half-year to 30th June 2008 to decline by approximately 30 percentage points compared to the first half of 2007."

Irish-based and Dublin-listed Qualceram has businesses in Ireland and Britain, where it owns Shires, the bathroom and toilet fittings manufacturer.

Much of the company's sales depend on supplying builders of new homes, so turnover is suffering as a result of the downturn in residential construction.

Qualceram said that market conditions in both countries remained challenging.

"In particular, a significantly lower level of housing starts, in Ireland and the UK, together with the weaker economic climate driven by an uncertain European interest rate environment and difficulties in the financial markets, has materially impacted on sales of the group's bathroom products."

The company said that it was trying to combat this by expanding its business into markets where it has not had a significant presence up to now.

"During the second half of 2008 the group expects to develop business in the DIY sector and other retail areas," the statement said.

"In addition, new designs and an efficient cost base allows it to compete strongly for existing business."

Qualceram's statement also confirmed that it had received an "unsolicited approach" last March. "Since that time the board, in conjunction with its corporate advisers, have undertaken a process to evaluate that initial approach. This process is ongoing," the statement concluded.

The company did not name its potential suitor, but it is understood to be a potential trade buyer from outside Ireland.