Trading profits dropped by 23 per cent at Readymix over the first half of the year as price competition and higher costs ate into margins. Una McCaffrey reports.
The decline, from €9.8 million to €7.6 million, was however offset by a €20 million exceptional windfall from the sale of one of the company's properties in Co Antrim. The company's disused quarry at Aughrim was sold in June, thus lifting pretax profits after exceptionals to €27.6 million, up from €10.9 million in the first half of 2004.
Readymix managing director, Joe Doyle, said the Aughrim sale was consistent with the firm's commitment to "unlock value from its asset base". He confirmed that the company is examining each of its 70 sites around the country to see how best they can be used. In May, Readymix applied for permission to build 130 apartments at its site in Dublin's East Wall. The Aughrim disposal came as Readymix continued to face significant pressures in the Republic, its main market. Despite recording higher sales volumes in the Republic over the first half, Readymix's trading profits were flat.
In the North, profits were slightly lower, mainly due to a decline in volumes and weaker profits from concrete products.
Isle of Man profits were sharply lower, although this was linked to a delay in infrastructural projects which are now underway. Readymix group turnover was up by 3 per cent at €125.3 million. Mr Doyle said the overall outlook for the company appeared to be stabilising.
He acknowledged that progress had been slow on an internal restructuring designed to take costs out of the business, but said that the board is happy that the right course has been taken. Readymix declared a dividend of 1.65 cent per share. The company also said yesterday that its finance director, Frank Lynch, would resign at the end of August after 22 years with the company.
He will be replaced by Roger Gonzalez (38), who was previously with Cemex, the Mexican company that took over UK firm RMC in March. RMC has a 63 per cent shareholding in Readymix. Before joining Cemex in 1996, Mr Gonzalez worked for Shell Oil in Central America and the Nicaraguan Central Bank.
He holds a BSc in Business and Information Systems and an MBA from Dallas University. Shares in Readymix rose by four cent to €2.19 yesterday.
