Readymix losses approach €7m as construction slump deepens in first half

LOSSES AT building materials group Readymix came close to €7 million as the construction slump worsened through the first six months of the year.

The company reported yesterday that demand for its products continued to fall in the first half of 2009 as a result of “exceptional weakness” in the housing and commercial building sectors.

Its statement noted that among the measures being considered is the sale of non-core businesses, but only if such a move can add value for shareholders.

Sales during the six-month period slumped to €41.6 million from €75.2 million during the same six months in 2008.

The group said hoped for results from cost-cutting measures failed to keep pace with slippage in sales. Consequently, the company was left with a loss before once-off items of €7.1 million, which translated into a €6.9 million loss before tax.

This was 30 per cent less than the €9.6 million loss recorded in the first half of last year.

However, exceptionals contributed €3.1 million to last year’s deficit, while they reduced losses slightly in the first half of 2009.

The company’s losses per share were down 23 per cent at 5.63 cent. Readymix said that the poor outlook for the rest of the year prompted directors to decide not to pay a dividend for the six-month period.

Last year the company returned 1.65 cent per share to shareholders after end of the first half.

Readymix said that it had reduced its workforce by 10 per cent since the start of this year. Between March 2008 and last March, it laid off 178 people. Management and non-executive directors have also taken a pay cut.

Readymix is supplying a number of ongoing projects, including the Titanic Quarter redevelopment in Belfast. The company is not contemplating any significant capital expenditure this year.

The firm believes ongoing weakness in the general construction market and a delay in the start of new infrastructure projects mean that trading conditions will be tough for the rest of this year and into 2010.

“Against this background, the priorities for management are continued cost-reductions and focusing on projects to deliver efficiency savings,” its statement noted.

Mexican giant Cemex owns the majority of the company’s shares.