The Kendal-based papermaker told its AGM that higher National Insurance contributions and effluent treatment costs means that its full-year would be much lower than last year and below market expectations.

Export sales to China had doubled over the past three years, while US sales were at "an encouraging level" following the appointment of a new agent, said finance director John Denman.

Last month the group said its paper divisions turnover had fallen 1% to 37.6m for the year to 29 March, although its cost of sales also dropped due to lower energy costs and better efficiencies, such as in raw materials (PrintWeek, 26 June).