Construction supplies company Readymix saw operating profits in its core unit drop by 4.3 per cent to €13.23 million last year, despite the building boom.
It was mainly with the help of a round of property disposals that the Mexican-controlled company managed to increase overall operating profits by 127 per cent to €33.4 million and increase pretax profits by 148 per cent to €32.3 million.
With turnover increasing only marginally to €248.1 million from €247.5 million, the company blamed "competitive pressures" and the rise in energy, transport and raw material for a slowdown in margin growth. However, the company said the combination of its €26.8 million proceeds from property disposals and in net cash flow enabled it to reduce its net debt to €9.2 million from €40 million and reduce its gearing to 6 per cent from 31 per cent. The lower gearing reduced financing costs to €1.4 million from €1.9 million in 2004. Readymix is 76 per cent owned by RMC Group, a division of the Mexican concrete products firm and third-largest global producer Cemex. The company installed Roger Gonzalez last month as managing director.
"Despite the substantial progress that has been made in fundamentally reshaping the business, operating results for 2005 were below expectations," the company said in a statement.
After redundancy costs of €3.29 million and the closure of its road-surfacing business, Readymix said progress on improving its financial performance was ongoing and said the underlying trend was steadily improving.
Readymix shares closed 5 cent stronger at €2.30 yesterday. The company declared a 5.4 cent per share final dividend, on top of an interim dividend of 1.65 cent.
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