Executive chairman Ken Minton told the Scottish papermakers AGM that its operating profit for December 2001 and January 2002 was "below break-even" due to low demand and machine shutdowns.

The Alloa-based firm exploited the traditionally slower winter months to press on with health and safety improvements, particularly at its manufacturing facilities at St Cuthberts and Westfield mills, as well as essential maintenance throughout the group.

"Health and safety improvements included a lot of guarding to take it up to standard. Were finishing off that programme," said group finance director David Harrison.

Around 140 of the 170 redundancies announced by Inveresk last autumn will be made by the end of March, with the rest going in the coming months.

Harrison said costs of the redundancy programme had been offset by the firms 2.1m sale of its Kilbagie Mills site to Leicester Paper Company Group subsidiary Kilbagie Recycled Fibres (PrintWeek, 8 March). The two papermaking machines at Kilbagie will be relocated elsewhere in the group.

Harrison said the groups level of debt remained below 20m and that efforts would be made to reduce this over the year.

Last year Inveresk recorded sales of 106.4m, 9% lower than in 2000. But it made a pre-tax profit of 200,000 before exceptional costs, compared with a loss of 6.2m in 2000.

Story by John Davies