API Group Declares First Final Dividend In Over A Decade

LONDON (Alliance News) - Foil and packaging manufacturer API Group PLC Wednesday said it will pay its first final dividend in more than a decade after ending its last financial year in a net cash position for the first time in 15 years.

API said it will pay a 1.3 pence final dividend, adding to its 0.7 pence interim dividend, after ending the year with GBP200,000 in net cash, compared with GBP2.6 million in net debt a year earlier. The return to a net cash position comes as API reported a GBP400,000 increase in operational cash flow, to GBP9.0 million, and a net cash inflow of GBP2.8 million.

API said pretax profit was flat at GBP5.6 million in the year ended March 31, even though revenue increased by GBP2.3 million to GBP114.7 million. It said its margin was hit by a proportional increase in sales of less profitable products and by unfavourable exchange rates. It also blamed higher levels of wastage in its laminates manufacturing division. Gross profit therefore fell to GBP28.1 million, from GBP28.2 million.

Administrative expenses increased by GBP520,000 to GBP16.7 million. Charges for the reorganisation of its European foils business and its holographics and laminates businesses, fell to GBP705,000, from GBP1.0 millit's a year earlier. Excluding these charges, pretax profit fell to GBP6.3 million, from GBP6.6 million.

"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 ten years, represent important milestones in the rehabilitation of the group," Chief Executive Andrew Turner said in a statement.

API said profit rose at its laminates and European foils business thanks to higher volumes, while the holographics unit broke even in the final quarter after a round of cost cuts. However, losses in the holographics business increased by GBP400,000 over the year, due to lower external sales.

API said its American foils business maintained its operating margin despite weaker sales in the second half. However, the unit's profit declined by GBP200,000 due to lower activity in the final quarter.

"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," Turner said.

API shares were Wednesday quoted at 72.85 pence, up 5.6%.

By Samuel Agini; samagini@alliancenews.com; @samuelagini

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