API Group reviews future of Chinese operation

May 7, 2010 Comments Off on API Group reviews future of Chinese operation Print Print

Laminate and film supplier API Group has said it will rethink the future of its loss-making Chinese operation as it indicated a drop in turnover for

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In a trading update this morning that revealed an improvement in second-half sales, the group said that it had begun a strategic review of its Chinese subsidiary after “limited progress” was made in reducing losses in the business.

API owns 51% of the business in Shanghai, which produces foil at a newly-built facility. However, the group reported a £1.2m operating loss from the business in the first half of the 2009/10 financial year and a £2.6m loss in the previous full year.

The statement said that API expected to take a £2.6m charge on its Chinese business in the coming year.

Elsewhere, sales improved in the second half with, API said, a 10% improvement in sales compared to the first half’s figure of £40.3m.

That would suggest full-year turnover somewhere around £84m, compared to £93.5m in the 2008/09 financial year.

Profitability in Europe also “recovered strongly” in the second half, the group said.

In the statement, API said: “After a difficult first half, the Group’s performance in the second six months of the financial year was ahead of expectations and the Board now expects to report a positive result, at operating profit level, for the year as a whole.”

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