Readymix has posted profit growth of 4 per cent for 2003, but has disappointed the market with some slippage in margins.

The building materials group said yesterday that it made pre-tax profits of €22.5 million for the year ending on December 31st, up from €21.6 million in the previous 12 months when results were hit by restructuring costs.

Profits at the operating level were more or less flat at €23.9 million, but came in behind analysts' forecasts. Operating margins of 10.3 per cent compared with 11.3 per cent in the previous year

Describing 2003 as "a challenging" period, Readymix said intense competition had held profit growth back while sales had advanced by 10 per cent to €231.5 million.

It said the increase in profitability was "credible" against the market backdrop.

Shares in the company fell by 15 cents to €1.90 on relatively low volume after the numbers were released.

A surge in housing construction in 2003 helped to offset weakness in commercial and industrial business in the Republic, where Readymix is most active.

Sales in the Republic were up 17 per cent at €140 million but the company said profits were just "marginally ahead". It highlighted construction under the National Development Plan, saying this weakened in the second half of the year.

The firm's sterling operations in the North and the Isle of Man posted a 1.3 per cent rise in sales to €91.1 million. Profit growth was hit however by a €700,000 currency impact when translated into euros.

Readymix pointed to a "successful" trading period in the North, but said a one-off disposal gain of €700,000 had compensated for a fall in growth on the Isle of Man.

Readymix is reorganising itself as an "all-Ireland" business, which should help to eliminate operational distinctions between the North and South.

The company has raised its final dividend by almost 7 per cent, giving a full-year payment of 7.05 cents, up 5 per cent on 2002.

Strong cashflow saw Readymix cut debt by €1.5 million to €27 million over the year.

The company has spent €15 million on acquisitions over the past 14 months and is seen as having significant capacity on its balance sheet to manage further purchases.

Readymix managing director Mr Joe Doyle said the company wanted to invest heavily in new product development and would seek to do this through acquisition and internal expansion.