Qualceram Shires' earnings increase to €3.8m

Operating profits at listed bathroom suite manufacturer, Qualceram Shires, doubled in the first half of the year to €3.8 million on the back of improved sales in its Irish and UK markets, the company reported yesterday.

Turnover at the Co Wicklow-based group grew 8 per cent in the first six months of the year to €52.9 million from €49.1 million during the same period in 2003.

Operating profit jumped to €3.8 million from €1.9 million. Profit before tax was unchanged at €3 million. However, last year's before tax earnings benefited from a €2.6 million once-off gain from the sale of assets here and in the UK.

Adjusted earnings per share (eps), which took into account goodwill write-offs and exceptional items, were 13.6 cent, compared with just 1 cent at the half-year stage in 2003.

Management yesterday announced that the board was proposing to restore the interim dividend, which the company dropped last year, and would pay 2 cent a-share next February.

Net debt at the end of the period was €20.7 million, which was 66 per cent of the group's net assets of €31.1 million. Finance director, Mr David Swords, said the €4 million proceeds from the imminent sale of the Hanley site in Stoke-on-Trent in the UK would be used to pay down some of the company's debt. It also has a €2 million capital expenditure programme for this year.

Chief executive Mr John O'Loughlin made it clear yesterday that management believed the difficulties dating back to Qualceram's purchase of Shires in the UK were behind the group.

"Shires is well and truly bedded down at this point," he said. "The group is benefiting from the ongoing growth in the Irish economy and the value of product going into new houses is going up year-by-year."

In the UK, which accounts for over half its sales, a key driver of turnover is the renovation market, which is in turn a product of the fact that at 88 per cent, house ownership in Britain is at an all-time high.

Mr O'Loughlin said the group would focus on organic growth in the short term, but would look for acquisitions.