Scapa in the red

TECHNICAL tape manufacturer Scapa has posted a first half loss of £3.1m, blaming complications with the closure of its French plant and falling sales across all sectors.

The Ashton-based company saw turnover fall 5.8% to £86.7m in the half year to t he end of September 2009, compared with £92.1m a year earlier. Pre-tax loss stood at £3.1m compared with a profit of £2.7m a year earlier.

The company said the closure of its Bellegarde facility in France in July was “not without complication”, including “unhelpful” industrial actions by the workforce – senior staff were “boss-napped” for 24 hours by militant French workers, after the closure was announced in April.

It added that supply issues for automotive tape following the closure, coupled with a spiked demand from some customers, resulted in higher than normal overtime and express freight costs, which meant an additional £1m was spent on transferring production to Italy.

Sales in Europe fell across all sectors during the period to £49m and although automotive improved on the second half of last year it still finished 27% down on the comparable period.

Meanwhile, the company said the North American trading environment continued to be very challenging, and the market saw reduced sales across all sectors, ranging from 7% down in medical to 60% down in construction.

US sales of £31.2m fell by 1.2% but fell a further 17.5% when adjusted for foreign currency movements.

In Asia, however, things look brighter with sales of £5.6m showing a 19% increase on the same time a year earlier. Sales into the electronics and regional infrastructure markets have again been the mainstays of performance, the company said.

Net cash balances at the half year were £2.9m (March 31, 2009: £6.8m).

James Wallace, chairman, said: “Our healthy balance sheet and cash position mean Scapa is well placed to benefit as order books recover.”

The company will not pay an interim dividend.