Finance director John Denman said that while the Kendal-based groups sales in China had been hit by SARS, its performance in the US had benefited from the appointment of a new agent.

The firm aims to grow export sales to the regions by 3,000 tonnes a year over the next three to four years to 50,000 tonnes a year.

The group reported an operating loss of 95,000 for the half-year to 27 September 2003, compared to a profit of 614,000 for the same period last year.

Pre-tax profits slumped from 1.1m to 95,000, primarily due to the difficulties faced by its paper division, but sales rose slightly to 27.5m.

Story by Andy Scott