Bathroom products maker Qualceram Shires warned this afternoon that weakness in the UK housing market and pricing pressure has had an impact on its margins. The UK market accounts for some 54% of group turnover.
Record energy costs, combined with higher utility prices in the second half of the year, have also led to an increase in manufacturing and transport costs, a trading statement from the company said.
'We have not been able to pass these costs on in selling prices and expect the impact to be around €1.25m in a full year,' the statement said.
Qualceram said that imports from the Far East and the weak market in the UK have also resulted in a very competitive marketplace, and the company has had to respond to this by reducing selling prices.
However, against the background of these factors, the company said its overall performance has been 'satisfactory' and is comfortably ahead of last year.
Qualceram Shires says it expects the sale of its 14.5 acre site in Hanley to be complete by the end of the year and will make about €4m. Coupled with operational cash flow, this should have a significant positive impact on gearing by the year-end, it said.
'Despite these negative factors which are outside of our control, the group's overall position is much stronger than a year ago and we remain optimistic for the future,' the company's chief executive John O'Loughlin said.
Qualceram Shire shares plunged this evening after the trading statement. They closed 27 cent lower at €1.75 - a fall of over 13%.
