It has also made changes to its board and is proposing to change its name to Grovebirch.

The sale comprises the groups UK label plants in Leeds and Lewes, plus its Leeds headquarters building and its French and Dutch label companies. The group will be left with just seven full- and part-time staff.

Jarvis Porter said it had achieved a considerable recovery in its labels business, but that it would have needed major capital investment and a North American manufacturing alliance due to consolidation among its customers. It said CCL was a logical partner and that the possibility of a sale had emerged from initial talks about a partnership.

The labels operation worked primarily in the healthcare and consumer sectors. In the year to 28 February 2001 it made a loss of 2.9m on sales of 23.3m. The total loss on its disposal will be 4m including goodwill previously written off.

The sale has led to the departure from the board of Gary Kenning, who the group said was responsible for turning around the performance of the labels division, and Mike Dane.

Christopher Mills, a director of JO Hambro, joins the board to assist it in considering new investments. Funds managed by JO Hambro own 16.7% of the groups share capital. Michael Maher remains as executive chairman.

Jarvis Porter said it would seek to retain its AIM quotation and target acquisitions in sectors where the board had previous experience.

Story by Gordon Carson