Building materials group Heiton has said its €4 million cost-reduction programme instigated last year has begun to realise planned annual savings of €3 million, but that its outlook for the group is still uncertain.
The general slowdown in construction is continuing to weigh heavily on the company as are "depressed" conditions in the DIY market, which accounts for 40 per cent of its business. However, the new housing market, which makes up 39 per cent of the group's revenue, is proving to be more robust.
The company's pre-tax profits fell by 10 per cent last year to €19.9 million due to a combination of slower economic growth and higher insurance and labour costs. But while its cost base has now been trimmed, chairman Mr Richard Keatinge told the company's annual meeting yesterday that the first half of the year had proven difficult.
He said the slowdown in the construction industry in Ireland, where the company derives most of its profits, had continued since the start of its financial year in May and had been compounded by poor weather.
"Given the general level of uncertainty about the outlook for the economy this year, it is more difficult than ever to make clear predictions about the year as a whole," he said.
The company remains positive about its half-year performance and believes it is in a strong position to benefit from "any resumption of growth in the industry", he said.
Chief executive Mr Leo Martin said after the meeting the outlook was unpredictable because of "general consumer uncertainty" and question marks hanging over Government spending in the months ahead. He said the DIY market was "depressed in the last few months but hasn't fallen off a cliff".
"We are reasonably confident of a good \ outcome but this year is probably the most difficult to predict in the last five years or so," he said. "Having said that, we have seen some good numbers coming through on the housing side... it has certainly been better than last year."
In general contracting there had been a fall-off in activity but public infrastructure spending should be higher next year, he added.
