Readymix posts loss of €3.9m for first quarter

BUILDING MATERIALS group Readymix estimates it lost €3.9 million during the first three months of the year.

According to a statement issued by chairman Adrian Auer, ahead of its annual general meeting in Dublin yesterday, demand for its products has fallen as a result of the decline in building activity and the "challenging" trading conditions experienced in 2007 that have continued into 2008.

"The slowdown is having an impact on the group's profit before tax, with the board expecting a €3.9 million loss for the first quarter of 2008," Mr Auer said. "Included in this is a €1.8 million loss from the sale of plant and machinery associated with the closure of the pipes and tiles business unit."

The company closed the pipes and tiles business in Naas, Co Kildare with the loss of 50 jobs as demand for its products fell last year. It announced its plans to shut the operation late in 2007.

Mr Auer added that volumes during the three-month period were hit by a combination of the continued weakness in house building and a fall in the number of working days that resulted from the Easter holidays.

However, he pointed out that the group has a strong balance sheet and a healthy cash position, which can be turned to its advantage in slowing markets.

Mr Auer said it had achieved a number of goals in repositioning Readymix for growth in the future.

During the first three months of the year, it bought "aggregates reserves" (quarries) in Co Offaly for €12.75 million in cash. It also integrated Denis Tarrant Sons, a business it bought in November 2007, into the group.

It is building three technologically advanced ready-mixed concrete plants in the Republic. Mr Auer said these would improve Readymix's ability to serve big infrastructure projects and to cut operating costs.

"Tough trading conditions are expected to remain throughout 2008, resulting in a continued downward pressure on margins," he said. "New infrastructure projects have not commenced as quickly as had been expected and demand in the housing sector continues to decline. Against this challenging background, the priorities for the board are cost management and to focus its investment programme on projects to deliver efficiency savings and improved products."