Ahead of its AGM in Dublin later today, Readymix issued a gloomy trading statement this morning
It says that because of the sharp slowdown in the level of activity in the building sector, demand for its products has reduced. It adds that the challenging conditions experienced last year have continued into 2008.
The slowdown is having an impact on the group's pre-tax profits and Readymix says it now expects to report a €3.9m loss for the first quarter of this year. Included in this estimate is a €1.8m loss from the sale of plant and machinery associated with the closure of the pipes and tiles business unit.
'Volumes during the year have been affected by a combination of the continued weakness in the residential sector and a reduction in operational days due to the earlier Easter holidays,' the company states.
It says that as a result of recent market developments, Readymix said it had completed an 'optimisation programme', which included the rationalisation of assets to improve efficiency, lower operational overheads and reduce personnel costs.
But the group says it has a strong balance sheet and a healthy cash position. It adds that in slowing markets, this financial strength can be used to advantage.
Readymix says that tough trading conditions are expected to continue for the rest of 2008, resulting in downward pressure on margins. It says that new infrastructure projects have not started as quickly as had been expected and demand in the housing sector continues to decline.
'Against this challenging background, the priorities for the board are cost management and to focus its investment programme on projects to deliver efficiency savings and improved products,' the trading update concludes.
