Agfa has issued a profits warning, despite a 9% increase in sales in the second quarter of the year, due to the lacklustre state of the US economy and higher production costs.


The company said its earlier economic forecast, which predicted a 10% rise in net profit, was too ambitious for the current economic climate and that it would actually record a decline in net profit for 2001.


Agfa Graphic Systems UK director Laurence Roberts said the UK market was buoyant and that sales of consumables were particularly healthy.


However, he added: "The second-quarter results are better, but probably not enough to catch up on the deficit in quarter one. Europe and the UK are on target for the year, but the US market is struggling and we have about a fifth of our business there."


Roberts said sales from Agfas graphic arts interests had not been adversely affected, but that the retail side of the business had suffered.


Agfa chief executive Ludo Verhoeven will unveil the firms Horizon plan, which aims to improve efficiency and cost-effectiveness across the group, at the end of September (PrintWeek, 29 June).


"Horizon is looking at all ways we can shore-up profitability," said Roberts. "Well take the necessary action and hope that the US market gets better.


"There wont be immediate results, but we should show improvement by early next year. A company is a little bit like a super-tanker in that respect."


Agfa plans to grow through acquisition as well as research and development, particularly in the digital sectors. The company employs 22,000 worldwide and last year achieved a turnover of 3.3bn.


Story by John Davies