Earnings improve at API
MANCHESTER packaging foil business API Group has reported stronger trading in the second half.
Improved earnings in the last six months of the year to March 31 helped the group record a full-year underlying operating profit of £864,000, up from £94,000 a year ago and a loss of £1m six months previously.
But sales were down 12% at £84.6m and API posted a pre-tax loss of £8.2m, compared with a £2.2m profit last time, after taking into account hefty impairments, including a write-down of £5m at a subsidiary in China – a figure shared with API’s joint venture partner.
API said its European businesses traded profitably throughout the year and improved margins, while the US operation returned to profitability in the second half. Full-year losses in Asia narrowed but progress was hampered by tight margins.
API’s chairman Richard Wright said: “Following difficult trading conditions in the first six months, I am pleased to report a much healthier operating performance in the second half of the financial year. Overall, the group has continued to make progress despite the challenging economic environment and, while we have more work to do in China, the performance of our European businesses has been particularly encouraging.
“Overall, results have started to show the benefit of our reduced cost base as volumes have improved and we would expect that trend to continue as markets recover further.”
Net debt increased by £3.8m to £18.5m, mainly due to capital expenditure and trading losses in China and a general increase in working capital. The group said its funding position had been improved with new banking facilities in the UK and the US. There will be no dividend.
