API Group (LON:API), the up-for-sale manufacturer of specialist foils and packaging materials, remains on the recovery trail though it is travelling at a slower pace.
Profit before tax in the six months to the end of September rose 29% to £3.7mln from £2.9mln at the interim stage last year.
Revenue held steady at £58.8mln versus £58.5mln the year before. Underlying volumes grew 3.9% year-on-year and by 10.0% from the preceding six month period, but unhelpful exchange rate movements - with the wilting euro the main culprit - kept top line growth in check.
The group focuses on three areas: laminates, foils and holographics.
The laminates division had a storming first half to the financial year, with revenue growth of 9.6% year-on-year. This is despite a long-running saga involving delays to a major new supply contract.
The delayed project is not now expected to contribute incremental revenues until late in the final quarter of the financial year, which runs to March.
The delays have been caused by the exacting technical demands of the customer. "We have learnt a lot," chief executive Andrew Turner said in an interview with Proactive Investors, taking some consolation from the hurdles the group has had to overcome. "If we've had these sorts of problems then I think it is fair to say there is a fairly high barrier to entry for potential competitors," Turner added.
The group's foils division held its end up but the previously high-performing holographics arm has swung back to a little above break-even, with an operating profit of £90,000 versus £948,000 the year before.
To some extent, this fall-off was expected, after the holographics element of a large laminates order fell through, but the situation has been compounded by anticipated orders from security customers failing to materialise due to delays in converting pipeline opportunities.
The management still has faith in the division and is keen to beef up its presence in what is a high value added market.
"We do the whole range of services, but we've tended to work with partners in the past, who handled the sales side. We now want a greater piece of the action, as it were," said finance director Chris Smith.
"The market for security and authentication is growing, but it is fragmented. We think we will be winners in the consolidation process," Turner asserted.