API on track after year of progress says boss

API Group, the manufacturer of specialist foils and packaging materials, has reported a dip in annual profits, but confirmed its faith in the future by reinstating an annual dividend after a 10-year gap.

The Cheshire-based group, with operations in Europe and North America, said although demand in some markets was “patchy” it is confident of a better year as it sees the benefits of investment and restructuring implemented this year.

Despite revenue growth of 2% ito £114.7m n the year to March 31 pre-exceptional operating profits were down by 4.8% at £7.4m

The group, which has manufacturing operations in Poynton and Salford and employs around 200 people there, said margins had been affected by several factors including less favourable exchange rates and higher levels of production scrap in its laminates division.

After a disappointing first half chief executive Andrew Turner was pleased with the overall performance in the latter part of the year.

“In spite of a slightly weaker profit performance, these results demonstrate further strengthening of the group’s financial position, combined with continued substantial investment in the operating assets of the business.  The year-end net cash balance and the re-introduction of a dividend after a break of more than 10 years, represent important milestones in the rehabilitation of the group.”

Looking ahead, he added: “Operational improvement and investment initiatives already completed, as well as further projects planned for the new financial year, are expected to strengthen API’s position in its key markets and enhance prospects for future sales and profit growth.”

API ended the year with a net cash position of £200,000 compared with £2.6m of debt in 2013.

It is paying  a final dividend of 1.3p per share, taking the total for the year to 2p.
The accounts reveal it has recently refinanced with HSBC in the UK and Wells Fargo in the US.