API Group's annual profits rise by 35 per cent

5th Jun 2013 07:56

API Group's annual profits grew by 35 per cent as the company kept a tight rein on costs and improved operational efficiencies. The manufacturer and distributor of holograms, foils, leaf, film and laminates for security and authentication posted a pre-tax profit of £6.8m for the year to March 31st 2013, up from £5.1m in 2012.Chief Executive Officer, Andrew Turner, said the biggest contributor to profits were a fixed margin on operating costs, an improved sales mix and rise in raw material prices.However, a slump in the company's Holographics division saw revenues fall marginally lower to £112.4m from £113.9m. Holographs suffered a loss of £0.3m, compared to £1.6m last year due to lower sales and volumes.Turner said the group is investing £3.5m in an effort to turn the business around.Nevertheless, the company achieved an overall strong performance supported by its Laminates and Foils businesses which delivered a combined profit improvement of 43% or £3.1m."We were able to make strong progress despite the setback of Holographics," Turner told Sharecast.Diluted earnings per share jumped 36% to 8.7p from 6.4p. Cash generated from operations fell to £9.2m from £10.4m while net debt reduced to £2.6m from £3.6m.Turner said in the year ahead, the group will focus on investing in projects to bolster growth.API decided to withhold this year's dividends and use cash proceeds to fund such projects and expects a "more resilient performance" over the medium term as investments strengthen its position in security and authentication market. Shares rose 5.19% to 71p at 12:13 Wednesday.