Chief executive Alan Walker said the change in the companys fortunes had taken a lot of hard work. A lot of people will be saying at long last in respect to our turnaround, but now its a case of more of the same.

Despite this conditions still remain challenging, he added.

The group turned last years 12m interim pre-tax loss, which was mainly due to the closure of operations, into a 1.6m profit for the first six months of 2003. Sales rose 6% to 21.9m.

Walker said Inveresk planned to relaunch its flagship paper and board brand, Gemini.

Group borrowings are under control with a flexible long-term facility being provided by the Bank of Scotland.

Inveresk wants to expand its presence in the US and Canada after putting new marketing initiatives in place.

The groups operations now comprise speciality paper mills at St Cuthberts in Somerset and Carrongrove at Denny, Stirlingshire.