API Group has reported a dramatic slump in interim pre-tax earnings from a 5.5m profit last year to a loss of 25.5m after exceptional items.


And chairman Moger Woolley said the outlook for the rest of the year "remains difficult to predict, with margins likely to remain under pressure".


Earlier in the year the group issued a profits warning for the six months to 31 March due to the economic slowdown in North America (PrintWeek, 16 February).


The results come as the group undergoes major restructuring, resulting in related costs of 10.6m. This has added to the woes of new chief executive Derek Ashley, who is undertaking a strategic review of the groups options (PrintWeek, 5 January).


Operating profits excluding exceptionals and goodwill fell 99% to 300,000, while sales, at 91.3m, were down 2% from last year, adjusting for the effects of acquisitions.


Exceptional costs rose from 700,000 to 24.1m, which included a goodwill write-off of nearly 13m for the Foils business in the US.


Woolley said changes were also being made to management structure, with a "divisional management layer being removed".


API has closed its metallised paper site in Macclesfield, with equipment moving to Caerphilly.


The metallised laminates site in Rochdale will close at the end of this month, with equipment transferring to Poynton and full production scheduled for September.


The group expects to achieve 6m of savings and productivity benefits next year as a result of the reorganisation. APIs share price fell by 12.7% to 123p on the news.


Story by Andy Scott