Qualceram profits go down the toilet

One More Thing:That flushing noise you hear is Qualceram Shires's profits disappearing down the toilet. The Arklow-based bathroom group issued a profit warning yesterday, saying its revenues for the year to the end of December would be 8 to 9 per cent below expectations.

Pretax profits of €2.4 million are now expected for the year, well below the €4.5 million that Davy had originally forecast and the €3.9 million estimate from Goodbody Stockbrokers. This year's sharp decline in housebuilding in the Republic and competitive pressures in the UK have made for stinking profits.

This was the company's third profit warning since late 2004. The business has been in almost constant flux since its takeover in 2000 of Shires in the UK.

That deal was supposed to transform the business. Instead, it has proved a millstone around its neck.

A series of factory closures, hundreds of redundancies and outsourcing deals to agents in China and elsewhere have failed to stop the rot. All this against a backdrop of a booming Irish property market and record sales of toilets and baths.

Qualceram's market cap is now just €22 million. It is worth less than Datalex, Donegal Creameries and Zamano - those giants of the Irish Stock Exchange.

The only silver lining is the impending €31 million fire sale of its property in Arklow.

Chief executive John O'Loughlin owns 13.5 per cent of the business and the board controls about 40 per cent.

Logic might suggest they take it private, but that seems unlikely. With the number of housing units being built in the Republic set to decline to about 55,000 in 2008, trading could get a lot worse.