Qualceram Shires, the quoted bathroom suite manufacturer, plunged to a €4.5 million loss in the first half.

The group attributed the decline to a combination of price competition, weakening housing markets and restructuring costs.

Operating profits before the restructuring costs were €2.9 million compared with €3.6 million last time. This was transformed into an aftertax loss of €3.6 million by dividend payments and a €6 million exceptional charge related to the restructuring of a plant at Longton in Britain.

Turnover fell from €52.9 million to €49.7 million in the six months to the end of June. While sales in the Republic were down marginally from €22.2 million to €21.8 million, turnover at the group's UK operations was down from €27.8 million to €25.1 million "largely as a result of intense price competition", according to the group.

The company warned that it expected house building activity to decline in the Republic over the second half, although it expected to benefit from the maturing of the Special Savings Incentive Accounts next year, as some of this money will find its way into housing refurbishment.

Trading conditions in Britain will remain difficult in the second half of the year, warned the group. The restructuring of the Longton plant will "help counter this" but there will be no benefit until 2006 from outsourcing arrangements put in place. Rising energy costs will also push up manufacturing and distribution costs in the second half.

The chief executive of the group, John O'Loughlin, said that despite the challenges the group remained on a strong footing thanks to its strong balance sheet and the highly cash generative nature of the business.

Earnings per share fell from 17.75 cent to 10.73 cent. An interim dividend of 2.1 cent was declared, an increase on last year's interim dividend of 2 cent.