Qualceram shares decline 15% to £1.35 sterling on profit warning

Shares in Qualceram Shires, the bathroom products manufacturer, fell 15 per cent in London yesterday following a profits warning. The shares closed at £1.35 sterling (€2.21), down from £1.59, their lowest level since August last year.

Qualceram now expects turnover in the €100-€110 million (£78.76-£86.63) range to the end of the year, compared with broker forecasts of €115 million .

Qualceram said group sales for September were disappointing, blaming a drop in consumer confidence following the attacks on the World Trade Centre.

It said weakness in October had continued and is unlikely to improve significantly this month.

The company said that its operating profit would be in the range of €10-€11 million. Its own broker, Davy Stockbrokers, had been forecasting operating profits of around €17.4 million .

This year's results will include a full year's contribution from the British Shires business which it bought in September last year.

The shares did not trade in Dublin yesterday and volumes in London were relatively small. Although unexpected, one broker said that Qualceram's statement was "not a massive surprise given the current circumstances".

Mr John O'Loughlin, group chief executive, said the company had devoted considerable resources to tackling its cost base since the Shires acquisition. "Much progress has been made and, while there has been a cost of implementation in the current year, the benefits will be significant going forward."

He added that the economic commentators' consensus "at this point in time, would indicate that it is prudent to take the view that revenue growth in 2002 could be a single digit percentage".

Mr O'Loughlin said, despite the change in market conditions, the group was on a sound footing.

At the group's annual general meeting earlier this year, shareholders were told to expect a year of consolidation after the Shires acquisition with the company working towards efficiencies.

At that stage it was happy it would meet analysts' expectations.

However, in keeping with many other companies, recent events have caused these expectations to be revised.