Restructuring strengthens outlook for API Group
for the full financial year, ending 30 September 2002, the group
has returned to an operating profit, after considerable losses in
the previous year.
API, the UK-based packaging materials provider, has announced that for the full financial year, ending 30 September 2002, the group has returned to an operating profit, after considerable losses in the previous year.
The group reported an operating profit before exceptional items and goodwill amortisation of £0.2 million (€3.14m), an improvement of £3.1 million over the previous year. The loss before tax, exceptional items and goodwill amortisation after charging net interest of £1.6 million (£1.6m for the previous year), was £1.4 million (£4.5m) on sales of £180.6 million (£183.4m).
Sales in the UK decreased by £7.0 million (8.5 per cent) due principally to weak demand from the luxury goods and beverages sectors. Sales to Continental Europe increased by £5.2 million (10.3 per cent) due to favourable exchange rates and a return to full production in the Metallised Paper division following completion of the consolidation of our metallising businesses at Caerphilly.
Sales in the US decreased by £1.7 million (5.6 per cent), due mainly to the uncertainty following September 11, the poor performance of Learoyd Packaging and the elimination of low margin turnover. Sales to the rest of the world increased by £0.7m (3.2 per cent).
Commenting on the results and prospects, chairman David Hudd said:"The improvement in operating profit during the year, achieved against a background of tough trading conditions, reduced demand and increased competition serves to illustrate both the benefits of the cost efficiency programmes and the resilience and strength of many of the group's businesses.
Although trading conditions are expected to remain challenging across the group, the board expects that further improvement will be seen in the current year. Opportunities to develop the group's businesses and to maximise returns on the capital investments made in previous years continue to arise. During 2003, margins will continue to improve and the full year benefits of the progress made in 2002 are expected to be realised.
"With the restructuring of the last two years completed, our key objectives were to reduce borrowings and to improve operating performance. I am pleased to be able to report that we have made good progress in both these areas despite tough trading conditions."
The company reported that its Foils and Laminates businesses, which account for some 60 per cent of the group's sales, performed strongly during the year and that its Metallised Paper division returned to full production following completion of the consolidation into its Caerphilly, Wales facility.
In his annual statement Hudd added that the group's strategy continues to be the development of its principal businesses: Foils and Laminates, Metallised Paper and the flexible packaging businesses of the Converted Products division.
