"We’ve definitely turned a corner and all the blood sweat and tears of the past seven months have started to unravel all the bad work that was done before. It shows the market that our plan is starting to work; we’re paying down debt and the business is turning around," said Paperlinx executive director Andrew Price.

According to the merchanting group’s figures, profits across its operations in Asia, Australia, Canada, and New Zealand grew by more than a third, however the company continued to be hamstrung by its European operations, which account for just over 70% of its revenue.

To the year ending 30 June 2013, sales at the firm’s European operations dipped by 16% to A$1.9bn, compared with A$2.3bn in the previous year, which the company blamed on declining demand. However, European losses ballooned from A$23.6m to A$34.3m.

In the UK, which accounts for around 30% of Paperlinx’s global revenues, Price said the recovery was "full steam ahead".

"We’re bringing back some serious volume. Margin is key though and we’ve got to do some work on that – that’s going to be our focus going forward," added Price.

The company did manage to reduce its debt level from A$147.8m to A$122.7m, largely thanks to the sale of some of its European operations. It also confirmed that it had extended some of its "key lending arrangements" including "amended facilities" in the UK, which it said would give it greater flexibility.

"We’ve got plenty of cash for the first time through our debt facilities, so we’ve got enough to do what we need to do and we’ve got a plan," said Price.

In a statement, the chief executive Dave Allen said that Paperlinx’s ongoing restructuring, which has been largely focused on its European operations and cost A$26m in the past year, was expected to deliver A$35m-A$40m of savings annually from next year. He added that the Australian group was confident that the business would be "marginally profitable" in its 2014 full-year results.

"The big stuff is done now, but restructuring the business has to be ongoing, it has to be part of our DNA so there are a few more things to do, but not on the same scale," said Price.

Overall sales from for the global merchanting group’s continuing operations dipped by almost 15%, from A$3.2bn in its previous financial year to A$2.8bn in 2012/2013. Underlying losses, which factor in restructuring costs, and the write-downs of the group’s European operations (A$25.1m in 2012/2013 and A$119.3m in 2011/2012) fell year-on-year from A$54.4m to A$39m.

In its results statement, the company also revealed that it had entered into preliminary discussions with the hybrid shareowners to simplify its capital structure and in essence explore a deal to swap the hybrid shares for ordinary shares.

Paperlinx chairman Robert Kaye said: "The Board believes that the simplification of the capital structure is fundamental to unlocking value for both Paperlinx ordinary shareholders and hybrid security holders."