A squeeze on margins and the euro's strength against sterling kept first-half pre-tax profits flat at building materials group, Readymix.

The group yesterday reported that turnover for the six months to June 30th this year increased by 12 per cent year-on-year to €115.8 million, from €102.8 million at the end of the same period in 2002.

However, pre-tax profits barely budged, coming in at €12.06 million this year compared with €12 million in 2002. Earnings per share increased by just under 0.5 cent to 9.01 cents. The company declared a dividend of €1.65 per share, the same figure as last year.

In a statement, Readymix blamed a number of factors for its lacklustre profits. The company said the euro's strong performance against sterling reduced earnings from its Northern Ireland and Isle of Man businesses. Average sterling translation rates were €1.46 during the period, compared to €1.61 last year. Both these markets remained flat, but margins were stable.

At the same time, while sales in the Republic increased by 21 per cent, intensive competition cut margins. Readymix also paid out €300,000 in redundancy costs following the rationalisation of its operations in the Republic.

Buoyant house building was the main driver of sales growth, the company said. Progress in National Development Plan projects also contributed to increased turnover. However, activity in the industrial, office and agricultural sectors slowed during the first half.

Last March, Readymix bought Northern Ireland-based Breton Roecrete from CRH for £4.75 million (€6.7 million). The group said yesterday that Breton had been fully integrated into its Finlay flooring business.

The group's balance sheet remained strong. Its debt to asset ratio was 28 per cent, while shareholders' funds stood at €125.8 million.