Buyers line up for API Group

STOCKPORT packaging firm API Group has received a number of offers since it was put on the market in September.

In its interim figures the group said: “The company and its advisers are in discussions with a number of parties.”

It added: “Due diligence information and management presentations are being provided with a view to securing revised proposals for the board’s further consideration.”

The business, which has manufacturing sites in Salford and Scotland, was put under pressure to sell by New York-based investors Steel Partners and Wynnefield Capital which own 32.3% and 29.6% respectively.

In the six months to September 30 revenues were static at £58.8m while pre-tax profits climbed 29% to £3.7m.

The group said sales were up 6.1% on the preceding six months and underlying sales volumes were up 3.9%, although movements in exchange rates had an impact on revenues. Margins grew across the business due to lower raw material costs.

At divisional level, three of the group’s four business units contributed higher profits. Laminates increased operating profits by £1.3m despite delays in the start-up of its major new supply contract.

Both API’s foils businesses made “encouraging progress”, with Americas profits higher by £300,000 and Europe by £400,000. Volumes at holographics – which helps companies tackle fraud and counterfeiting by developing holographic logos on packaging – suffered from the completion of a large joint project with the laminates arm.

Chief executive Andrew Turner said: “Whilst growth in the period was modest compared to the last two years, it is encouraging that underlying demand for API products remains robust and the group has been able to deliver another substantial improvement in profitability.

“Despite challenging economic conditions, the board’s expectations for the full year remain substantially unchanged, with management’s primary focus on the conversion of a number of specific sales opportunities, as well as the successful execution of key capital expenditure projects designed to enhance our product and service offering to customers.”