Bathroom products manufacturer Qualceram Shires has reported profits of €1.362m for the year ending December 2007, down from the figure of €2.654m the previous year and lower than company expectations.
Revenues for last year fell by nearly 12% to €90m from €102m in 2006, although the firm said it made a profit of over €16m on the sale of its 13 acre property in Arklow, Co Wicklow. Earnings per share fell to 6.14 cent from 15.72 cent,
In a separate announcement this morning, the company said that it had received an unsolicited preliminary expression of interest from a third party to acquire the firm.
It emphasised that the discussions are at a very early stage and that there is no certainty that they will lead to an offer.
Qualceram Shires said that 2007 proved to be a challenging year for the group, as predicted at the publication of its interim results and later repeated in a trading update in October.
'Our main markets have been affected to a greater degree than expected by economic factors outside the control of the group,' Qualceram Shires said.
'In both the UK and Ireland, the slowdown in their respective economies, the increase in interest rates and the marked fall in new housing starts, particularly in the last quarter of the year, have contributed to the fall in sales of the group's bathroom products resulting in lower than expected profits for the year, it added.
Qualceram Shires said that over recent years, its industry has faced an increasingly challenging environment, intensive competition from Asia, direct outsourcing by a number of major merchants and ever increasing energy costs.
'These are further compounded by markets that have deteriorated during 2007,' it adds.
It predicts that 2008 will be another challenging year for the group and says its board has already taken decisive action to reduce costs further in order to counteract the downdown in house building and worsening markets.
'With a stronger balance sheet following the disposal of the Arklow property and continuous improvement of its cost base, the board is confident that the group will emerge from the downturn leaner and fitter, which will serve as a platform for future growth,' commented company Chairman Peter Addison.
Shares in the company closed up two cent at €1 in Dublin.
