API hit by sluggish US market
STOCKPORT and Salford packaging firm API Group has warned its half and full-year figures will be down on last year after experiencing a drop in demand in the US.
The group which specialises in laminated board and paper packaging for consumer goods, such as boxes for bottles of whisky, said its Foils Americas arm suffered a sustained fall in orders from the metallic pigment sector and will post a “small loss” for the year.
“The duration and severity of the down-turn has been greater than expected, albeit a recovery is now getting under way,” said API in a trading statement.
The performance of API’s Salford-based Holographics business, which helps companies tackle fraud and counterfeiting by developing holographic logos on packaging, continued to improve and it is expected to return to profitability. But its gains have not been enough to compensate for the US losses. Elsewhere, the European laminates and foils businesses are trading broadly in line with last year.
The company said: “Overall, the elimination of last year’s losses in Holographics is proving insufficient to compensate for the significant profit shortfall at Foils Americas. As a consequence, group expectations are being downgraded, with both first half and full year results behind those reported last year.
“Beyond the current financial year, group results should benefit from a recovery in sales revenues at both Foils Americas and Holographics, as well as the realisation of growth and profit improvement opportunities associated with the ongoing capital investment programme.”