23rd Sep 2005 07:01
API Group PLC23 September 2005 23 September 2005 API GROUP PLC TRADING UPDATE API Group plc is making the following trading announcement in the light ofrecent events and the recent performance of its European foils and laminatesbusiness. On 21 September 2005, API received notification from PriceWaterhouseCoopers thatthey had been appointed as administrators of Boxstar Limited, one of the Group'smajor customers in the United Kingdom. Following initial inquiries made with theadministrators, it is now clear that there is considerable uncertaintysurrounding the recoverability of amounts due from Boxstar Limited. API indicated in its interim results announcement in June that the Group hadbeen experiencing challenging trading conditions in certain of its markets, butwas optimistic of some recovery in the second half. Since the interim resultswere announced, our US foils and European security products businesses haveexperienced increased demand and have performed strongly. However, demand forpremium-packaging products in Europe has continued to be relatively sluggishthroughout the summer affecting both the European foils and laminatesbusinesses. The performance of our Chinese foils business continues to beaffected by the restructuring of the Chinese tobacco industry. As a result of the above, and in particular due to the uncertainty surroundingthe recoverability of amounts due from Boxstar Limited, the Group's operatingprofit for the year ending 30 September 2005, although showing a goodimprovement over the previous year, is now anticipated to be in the region of£1.8 million. The Board considers that there will be improvement in the short to medium termin the European foils and laminates businesses, through a combination ofimproving market conditions, recently launched new products and action taken toimprove effectiveness and efficiency. The Board is also confident that therecent improvement in profitability in the US and security foils businesses willbe sustained and there is already some evidence of improvement in the Chinesefoils market. We are therefore confident of further improvement in the Group'sresults in 2006. ENDS For further information, contact: David Walton, Chief Executive, API Group plc 020 7653 3300 Tim Spratt/Caroline Wells, Financial Dynamics 020 7831 3113 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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