For the 12 months to 30 June 2003 sales in its paper merchanting division rose 34% to 1.2bn (A$2.9bn), while its pre-tax profits reached 38m, up 65%.

Sales volumes also increased by 36% to 1.5m tonnes.

In the UK, PaperCo (formerly Bunzl Fine Paper) reported pre-tax earnings up 55% to 15m, with the UK market performing better than continental Europe.

PaperlinX is looking to further increase its presence in the European paper merchanting sector with its 520m bid for Buhrmanns paper merchanting division.

PaperlinX said due diligence and legal documentation for the bid was well advanced, and it expected to complete the deal during the third quarter.

Sales for the PaperlinX group rose 22% to 1.4bn, with profits before tax, amortisation and depreciation up 10% to 129m.

Despite challenging economic and global market conditions, the group said its paper merchanting division was well placed to benefit from any improvement in demand.

PaperlinX has merchanting operations in Australia, New Zealand, the USA, Canada, Singapore, Hong Kong, Malaysia, the UK and Ireland.

By Andy Scott