Although, the company managed to pass on the increased costs by upping prices, trading conditions have deteriorated sharply and sales volumes for aggregate and value added products have fallen. No improvement is expected in 2008.
“Previously forecast volumes are expected to decline and the overall UK order book is expected to reduce sustainability,” the update added.
However, the company’s Scottish operation, Ennstone Thistle, which has a greater exposure to public spending, and its Polish business are performing well.
The Polish business is expected to perform ahead of management expectations for 2008 due to the introduction of two new quarries, which will significantly increase aggregate production.
The company is also benefiting from substantial and growing mineral reserves and Ennstone aims to covert 50m tonnes of unconsented reserves to consented reserves over the next two and a half years.
Ennstone said it was reviewing ways to reduce its cost base and is scrutinising all forms of capital expenditure carefully.
Ennstone’s shareprice at 2.30pm was down 30% on last night’s close to 14.90p on the London Stock Exchange.