PROFITS: Qualceram Shires has reported a sharp rise in profits, boosted by last year's acquisition of British group Shires.

The bathroom products manufacturer said pre-tax profits rose by 51 per cent to €2.3 million from €1.5 million a year earlier while operating profits were up 77 per cent at €9.4 million. Turnover from continuing activities jumped by 138 per cent to €99.2 million while the group announced a final dividend of 3.5 cent per share, up from 3.34 cent last year.

Chief executive Mr John O'Loughlin said the company, which issued a profit warning last November in the wake of the September 11th attacks, was happy with trading to date this year.

"Overall, we are optimistic and comfortable with the figures being put out there," he said, referring to analysts' forecasts of 10 per cent growth this year.

The weaker parts of Shires had been stripped out following its takeover last August, Qualceram said.

Significant progress had been made on the industrial relations front, in particular. A new agreement with workers has been put into place, which should secure industrial peace.

"We are now in a position where all divisions are profitable and all barriers to growth have been eliminated," Mr O'Loughlin said. "We are on a strong footing to push the business forward."

The figures included an exceptional cost of €1.8 million, which was mostly related to redundancies that saw the numbers employed by the group drop from 1,200 to 900.

At €53 million, year-end debt was high but the group said it hoped to reduce this to around €45 million by the end of this year.

It plans to use the proceeds from a number of property disposals, which are expected to yield up to €4 million, to partly pay down the debt.