Readymix plc, the building materials company, issued its first Interim Management Statement today which the Chairman, Adrian Auer presented at its Annual General Meeting in Dublin. The company expects to report a loss  €3.9 million for the first quarter of 2008 because of the construction sector downturn.

Readymix says that as a consequence of the sharp deceleration of activity within the construction sector, demand for its products has reduced and the challenging trading conditions experienced in the latter half of 2007 have continued into 2008. This slowdown is having an impact on the Profit Before Tax, with the firm expecting a €3.9 million loss for the first quarter of 2008. Included in this estimate is a €1.8 million loss from the sale of plant and machinery associated with the closure of the pipes and tiles business unit. Volumes during the quarter have been affected by a combination of the continued weakness in the residential sector and a reduction in operational days due to the earlier Easter holidays.

As a result of recent market developments, the company has completed an optimisation programme which included the rationalisation of assets to improve efficiency, lower operational overheads and reduce personnel costs.

Readymix says that it has a strong balance sheet and a healthy cash position and in slowing markets, this financial strength can be used to advantage.

"Following a period of consolidation and strategic acquisitions, the management team has achieved major goals in repositioning the Group for long term growth. During the first quarter, the Group acquired aggregates reserves in Co Offaly, for €12.75 million in cash. The integration of Denis Tarrant & Sons, purchased in November 2007 is now complete and providing cost synergies to our southern region. In November 2007, the Group acquired a modern ready-mixed concrete plant in Co. Tyrone, which has enhanced our presence in the North West whilst delivering operational cost reductions to that region. In the Republic of Ireland, three new technologically advanced ready-mixed concrete plants are currently under construction. They will improve our ability to serve large infrastructure projects whilst reducing operational overheads,"the statement said.

Tough trading conditions are expected to remain throughout 2008, resulting in a continued downward pressure on margins. New infrastructure projects have not commenced as quickly as had been expected and demand in the housing sector continues to decline. Against this challenging background, the priorities for the company are cost management and to focus it’s investment programme on projects to deliver efficiency savings and improved products.