Chairman Anthony Hichens said market conditions had remained hard for the first-half of the year, with margins in the groups paper business affected by the continuing cyclical downturn in the paper market.

The packaging-manufacturing group saw pre-tax profits fall 12% to 39.3m for the six-month period to 31 October 2003. Turnover was up slightly to 745m.

Despite the market, the groups UK paper business St Regis raised its production levels, holding its strength in the domestic market.

Sales in the paper and corrugated packaging sector of the business fell marginally to 376m, while operating profit was down to 28m, a fall of 12%.