Shares in Qualceram Shires gained another 7.14 per cent to close yesterday at €1.50 after the bathroom manufacturer reversed half-year losses to turn an operating profit of €2.2 million in the six months to June.
The group said the improving trend had continued into the first two months of the second half of the year. The share price rise yesterday followed a 9 per cent increase on Monday, after the company declared that it agreed to acquire the freehold interest to all of its property in Arklow, opening the possibility of windfall profits from the sale and redevelopment of the site.
The zoning on the 11-acre site at South Quay in Arklow provides for mixed-use developments such as hotel, recreation or residential projects.
Turnover in the first half grew to €52.1 million from €49.7 million while gross profit rose to €16.4 million from €16.3 million.
After pretax losses of €3.38 million in the same period last year - and annual losses of €5.14 million - Qualceram reported a pretax profit in the first half this year of €1.99 million.
As a result, basic earnings per share rose to 7.93 cent from a loss of 16.61 cent per share in the first half last year. The total deficit for 2005 equated with a loss of 24.30 cent per share.
"Despite tough market conditions and high energy prices, we have achieved an improved and satisfactory performance," said chief executive John O'Loughlin.
"The group has increased its gross margins from 29 per cent to 32 per cent and has increased investment in marketing and product development in the period."
However, the group said further increases in energy and raw materials costs in its own factories "somewhat mitigated the benefits achieved through outsourcing".
While Qualceram attributed the uplift in margins to a change in supply from in-house production to outsourced production, increased marketing and product development pushed expenses to €14.3 million from €13.5 million.
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