Qualceram failed to match dramatically reduced expectations following a difficult year that saw a fall in sales and the decision to close one of its British plants.

The cost of new product launches also ate into operating profits, the bathroom fittings group said yesterday.

But the company said current trading was ahead of the same period last year in all its markets and that it expected improved results and cash-flow in 2003, despite a cautious outlook on turnover.

Chairman Mr John O'Loughlin said the group had improved productivity and reduced costs in a "challenging year".

The bathroom fittings group reported a full-year loss of €11.55 million compared with a profit of €2.3 million in 2001 on turnover that slipped to a fraction above €100 million from €106.1 million a year earlier. Turnover from continuing operations was ahead just 1 per cent and only Ireland showed any noticeable growth.

As expected, the group will pay no final dividend.

Qualceram incurred an exceptional charge of €13.1 million in relation to the closure of the underperforming Hanley plant in Britain. Mr O'Loughlin said the closure, together with the sale and leaseback of six properties approved at an extraordinary general meeting earlier this week, marked the end of the integration of its Shires acquisition.

The sale and leaseback are expected to reduce sharply the group's debt, which last year fell from €53.3 million to €47.3 million. He said it "leaves the group well positioned to face the challenges and opportunities going forward".