Interim Management Statement

    RNS Number : 1569I
  Qualceram Shires PLC
  14 November 2008
   

    Qualceram Shires plc
    Interim Management Statement

    Dublin, London 14 November 2008: Qualceram Shires plc ("Qualceram Shires" or the "Group"), a manufacturer and distributor of a wide
range of bathroom products today issues its Interim Management Statement for the period from 1 July 2008 to the date of this statement in
accordance with the reporting requirements of the Transparency Regulations 2007.

    Operational Update and Financial Position
    As previously outlined by the Chairman in the Interim Results Statement issued on 29 August 2008, the Group's trading performance has
been adversely affected by the unprecedented slow-down in the property market and the deepening economic downturn in Ireland and in the UK.
Ongoing negative consumer sentiment and the lack of availability of mortgage finance continues to impact unfavourably on the Group's markets
and financial performance.

    Turnover in the first six months of the year was 28% behind the corresponding period in 2007. Since the interim results market
conditions have continued to deteriorate in both of the Group's main markets with turnover for the four months ended 30 October 2008 33%
behind the corresponding period in 2007. Turnover for the year to the end of October 2008 is 30% behind the same period for 2007. 

    The Group continues to reduce its cost base at every opportunity with a view to resizing its overhead base to match current market
conditions. Where possible, output from the Group's manufacturing plants is being reduced to match current demand. This has resulted in a
reduction in headcount of 33 people since 30 June 2008. 

    The Group has agreed heads of terms on the disposal of its interest in the Longton facility and discussions are ongoing with the
landlord to progress this transaction. Negotiations are also continuing with the Group's landlords to progress the waiving of our breach of
covenants whereby the landlord can call the letter of credit which is in place and seek to have a second letter of credit in their favour. 


    Outlook 
    Economic conditions in the Group's main markets continue to be challenging and trading in November to date has shown no sign of
improvement. This is exacerbated by the tightening of the availability of credit. The Board is of the view that we will not see a recovery
in the Irish and UK housing markets in 2009. Whilst we welcome the interest rate reductions announced last week in our key markets, and are
hopeful that if these are passed on to consumers it will help to stabalise the market, the Group expects to report a loss for 2008.
Increased mortgage availability and a return of customer confidence remain the key requirements for a sustained market recovery.

    The Board is committed to continuing to examine ways to improve the Group's competitiveness and rationalise the business so as to
position the Group for the return of more favourable market conditions. 

    In the short term, our operational focus remains on cash management and cost efficiencies. We continue to believe that both the Irish
and the UK housing markets remain attractive in the medium and long term due to the positive demographic trends in both markets and the
ability, in an improved market, for the Group to increase volumes profitably given the Group's more efficient cost base.





    Peter Addison                                               John O'Loughlin
    Chairman                                                      Chief Executive


    14 November 2008.


    Notes to Editors



    Qualceram Shires plc is a leading manufacturer, marketer and distributor of a wide range of bathroom suites through five principal
brands, namely Qualceram, Shires, Shaws of Darwen, Selecta and Trent. The Qualceram brand offers a diverse and comprehensive range of
traditional and contemporary bathroom products. Shires has been one of the leading brands in the United Kingdom and Ireland for over half a
century. The Group's Selecta brand is regarded for its range of showering products, most notably for its high standards of quality and
choice. Established in 1897, Shaws of Darwen produces a unique product set of handmade fireclay sinks, and over 100 years old, the Trent
brand maintains bathroom suite designs of every era, from early Victorian times through to today. With leading market positions in Ireland
and the UK, coupled with increasing access to other international markets the Group's strategy is to increase market share in the luxury end
of the bathroom products sector by offering a complete package of branded products, supported by superior customer service.



    www.qualceram-shires.com 



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