Fulmar has announced the sale of its loss-making packaging pre-press arm along with a set of "creditable" interim results.

Tamworth-based The Box Room made losses of 280,000 on sales of 2.5m in the year to 31 December 2000. And it had become "more and more difficult [for it] to get the margins" in the last six months, said Fulmar chief executive Mike Taylor.

In addition, its diversification into software development had taken it further away from Fulmar's core businesses of commercial and book printing, he said.

Directors Neil and Carole Gleghorn have incorporated two businesses, Keelex and Kallik, to acquire the origination and software arms of The Box Room for a consideration
of 575,740 and 17,000 respectively.

The deal is subject to shareholder approval, but Taylor, who is the majority shareholder, did not anticipate any resistance.

Fulmar helped form The Box Room in 1992, initially taking a 10% stake. It upped its stake to 50% in 1995, and acquired the remaining shares in 1996.

In the six months to 30 June 2001 Fulmar group reported sales up 4.3% at 21m, but operating profits dropped 8.7% to 2.34m, giving a margin of 11.1%.

Taylor said commercial print had put in a "creditable" performance in a tough market, and books, via subsidiaries Bookmarque and White Quill, had shown improvement. But financial print was "very, very slow".

While the group is in a period of "very restricted capital expenditure", Taylor was in Germany this week looking at a 12-colour Heidelberg Speedmaster and a 74 with double coater, which he is considering for book jacket arm White Quill. "But neither are imminent purchases," he said.