New products boost API profits

IMPROVED margins took pre-tax profits at API, the film and paper manufacturer, to pounds 3m in the six months to 2 April - 54 per cent higher than the same period last year. Turnover at the packaging group was 14 per cent up at pounds 37.4m.

Operating margins improved from 6.4 per cent to 7.3 per cent.

Michael Smith, chief executive, said improving logistics had reduced stock levels and lead times, and allowed the group to use its purchasing power more effectively. API had also developed closer links with customers on inventory tracking and product specification.

More than half of the sales increase came from new customers and products. Innovations included a protective coating for film used in a laser x-ray process developed by Polaroid.

API's foils and laminates division enjoyed strong volume growth during the first half, with turnover 20 per cent higher at pounds 24m. Sales by the coatings and office-products division rose 9 per cent to pounds 12m, although its profits were hit by a pounds 230,000 currency translation loss.

With pounds 4.2m net cash at the beginning of April, the group said it was seeking acquisitions.

Henry Cooke, Lumsden, API's broker, forecast full-year pre-tax profits of pounds 6.5m.

The shares were unchanged at 392p.