The company recorded a £1.4m pre-tax profit, up more than 16% on the same period last year, when it posted a profit of £1.2m. First half turnover was also up marginally at £43.9m (H1 2010: £43.5m).

According to chairman Mark Cropper, the improvement has been especially helped by a turnaround in subsidiary James Cropper Speciality Papers (JCSP).

He said: "The recovery of JCSP is encouraging, illustrating the strength of our balanced portfolio of businesses.

"However, I am mindful that in past years, sales into the Eurozone by speciality papers have accounted for 30% of this subsidiary's turnover and that in recent months its orders from European customers have been running below this level.

"The performance of speciality papers in the second half is therefore not immune to the unfolding economic events in the Eurozone."

The results include major revenue and capital projects designed to "improve efficiencies, increase capability and strengthen infrastructure" across its three subsidiaries – JCSP, James Cropper Converting (JCC) and Technical Fibre Products (TFP).

James Cropper said that it had been hit by a number of price increases over the period, with energy costs rising 22% over the same period last year.

The price of pulp also went up, with Northern Bleached Softwood Kraft opening at US$965 (£610) and peaking at US$1,020/tonne in July, representing an increase of 60% since July 2009.