Readymix expects fall in profits for 2007

Building materials supplier Readymix expects operating profits for last year to fall below the €19.6 million it reported for 2006.

The group said yesterday that, while 2007 results had not been finalised, "operating profit before non-recurring items for 2007 will be substantially below market expectations and the operating profit achieved in 2006".

Operating profits at Readymix grew 50 per cent in 2006 to €19.6 million, following a 4 per cent fall a year earlier.

Readymix did not give an explanation for the poor performance but it is thought that the construction slowdown, which is hitting the housing market in particular, is too blame.

The company added that it expected to issue a further statement in two weeks' time.

Last year the group took steps to cut its exposure to residential building.

It announced the closure of a manufacturing facility in Naas, Co Kildare, with the loss of up to 50 jobs. The plant was largely focused on producing roof tiles and pipes used in housebuilding.

It also sold its Finlay Breton ready-mixed cement business to Tyrone-based Acheson & Glover for €49 million.

At the time Readymix signalled that it intended switching its focus to meeting demand from big projects such as road and rail building.

The building industry expects this market to remain buoyant as a result of the Government's National Development Plan, which will see more than €180 billion spent on public projects over a six-year period.

Mexican giant Cemex took a majority stake in Readymix in 2005 and restructured the business.

Readymix's share price fell by almost 20 per cent yesterday morning in the wake of the profit warning. It closed down 8 per cent at €1.40.