The money went on overhauling US operations, shutting down the lossmaking non-woven business in Dundee and selling off remaining African interests.
In the first six months of this year overall group margins rose from 8.6 to 9.9 per cent. Despite flat volumes, interim pre-tax profits to 31 May rose by 21 per cent to pounds 14.3m, although pounds 1m stemmed from currency translation.
'Margins across the group are tantalisingly close to 10 per cent,' said Mr Leng. 'The growth is coming from unit-cost efficiency. We have abandoned certain sales where we cannot achieve added value or where we were working too hard to achieve the required return.'
The UK now contributes nearly two-thirds to European profits, which grew by 20 per cent to pounds 13.2m. Packaging profits up by pounds 600,000 at pounds 5m were helped by an eight-week contribution worth pounds 850,000 from Cereal Packaging, acquired in April after a pounds 50.2m rights issue.
That deal, plus the purchase of Carton Systems for pounds 17.35m on 16 June, means Low & Bonar is now the UK's second largest carton manufacturer.
European plastics suffered from severely reduced demand. Profits fell to pounds 1.7m from pounds 2.2m despite a near-doubling of profits from UK operations. In the US, profits and margins in both packaging and plastics improved, with total operating profits up to pounds 3.7m from pounds 2.2m.
First-half borrowings of pounds 18m, down from pounds 37m, were flattered by the balance of the rights issue proceeds. Since then the company has spent the balance on Carton Systems but post-acquisition gearing of 25 per cent is below the 30 per cent figure seen at the year-end.
Earnings of 10.22p were up by 14 per cent and the dividend is increased by 7.4 per cent to 2.9p. Yesterday the shares rose from 338p to 346p.