Engineering and plastics company Barlo Group plc has said while it is trading ahead of plan in the year to date, conditions in the second half look "difficult and unpredictable", particularly for its continental European operations.

The company said that as its order book covered only a six-week period, it was difficult to predict the outlook beyond then.

However, in the difficult German market, where it has substantial operations, last year's poor trading environment has worsened in the current year, affecting its radiator business.

Chairman Mr Niall Carroll told the company's annual meeting yesterday that for the remainder of the first half of the company's financial year, it expected to continue trading ahead of expectations.

"However, economic and market conditions remain difficult and unpredictable throughout Europe," he said. "There is a particular lack of visibility on sales trends and profit performance for the second half of the year, when the group has set itself more ambitious targets."

In plastics, he said Barlo was beginning to see the benefits of its restructuring programme and sales volumes in the current year were ahead of plan despite depressed market conditions. But higher raw material costs would have to be passed on to customers.

But the firm's radiators division was worst hit by last year's economic downturn and has continued to feel the pressure this year. The continental European market has been very depressed but demand in the Republic and Britain has remained more robust. Overall, the radiators division is well behind plan.

Managing director Mr Tony Mullins said the German market was a cause of concern for Barlo's radiator unit. In the year to March 31st, Barlo experienced difficult trading conditions and saw its share price tumble after several profit warnings. The company reported a loss of €10.6 million after tax, compared with a €19.6 million profit the previous year.