The sanitary ware manufacturer, Qualceram, the sanitary ware manufacturer which gained a share quotation in Dublin and London last April, has recorded an 8 per cent rise in pre-tax profit to £823,000, in the six months to June 30th, 1997. Growth is expected to accelerate in the second half.
Although sales rose by 17.9 per cent from £3,705,000 to £4,368,000 in the first six months, the cost of sales grew at the faster rate of 20.8 per cent from £2,376,000 to £2,871,000, reflecting investment in new plants, the establishment of depots in Yorkshire and Lyons, and the launch of a new Galway suite which has received a positive reaction. These costs led to a contraction in the pre-tax profit margin from 20.5 per cent to 18.8 per cent. Managing director Mr John O'Loughlin said the benefits from these investments should come through in the second six months. Qualceram is looking at the possibility of setting up a depot in Dublin. Describing the interim results as "in line with our expectations", he said the focus now was to "build on our product range". The group strategy is to "develop our sales on the products inside the bathroom door". Development could include greenfield or bolt-on businesses and "we are not adverse to takeovers if the right target presented itself to us". Group earnings per share rose from 5.23p to 5.63p. Shareholders will receive an interim dividend of 1p per share. The dividend is covered 1.9 times by available earnings.
A breakdown of sales shows growth in all main geographical areas. Ireland remains the most important with £2,319,000, up from £1,974,000. Sales in Britain increased from £1,684,000 to £1,965,000 and Mr O'Loughlin said there would be an increased focus on this area. Sales in mainland Europe grew from £20,000 to £70,000. A breakdown of sales by product show a rise in manufactured products from £2,041,000 to £2,676,000. The next most important area, bought in accessories, increased from £675,000 to £938,000.
Qualceram, which sells most of its products for refurbishment purposes, is heading for full-year pre-tax profits of around £1.8 million, representing a 20 per cent growth on the level in 1996.
