API upbeat but concerned about demand levels

Specialist foils and packaging materials maker API Group has reassured that interim results will be in line with expectations after an 'encouraging' trading performance in the first six months of the year.

However, the company did not that it was cautious on demand levels in European markets and that its view was "in common with many other companies". However, it said that the outlook for the rest of the year remains positive given specific sales opportunities and improvement initiatives.

Margins in the first half have continued to recover from the raw material cost pressures seen last year and sales are expected to up year-on-year.

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The Laminates division is performing ahead of plan, while Foils Americas and Foils Europe have held on to their profit improvement momentum due to better margins and lower costs, the group said.

However, some weakness has been identified in the Holographics unit with results expected to be lower due to the completion of a significant joint project with Laminates, as well as a slowdown in order from external customers.

The company said: "A capital investment programme is underway to strengthen Holographics' offer to the growing security and authentication market."

API commenced a formal sales process in September after the board decided earlier in the year that it would consider exploring a sale in the third quarter.

"Having consulted with its advisers and given the matter careful consideration, the board has now concluded that such a step would serve shareholder interests and is therefore seeking potential offerors for the company, initiating a formal sale process and putting the company into an offer period with immediate effect," the firm said on September 26th.