The South African fine paper producer took non-recurring pre-tax charges of 24.1m during the period to the end of December 2003, which included some 7.6m related to staff reduction costs.

A further 8.2m was related to the closure of paper machine PM14 at its Westbrook mill in the US. Chief executive Jonathan Leslie said market conditions for fine paper were different in its two major markets of Europe and the US.

Sales increased 19.4% in Europe to 284m, against tonnage sales of 588,000, a rise of 12% on the same period to the end of 2002.

This was against falls in both North American sales and tonnage figures, where a recovery in coated paper failed to materialise, and its performance overall was disappointing.

The group reported overall sales of 603m, a rise of 9.9% on the previous year, combined with its net loss of 11.5m.

Leslie said world economic conditions were improving, with improved demand being seen in Europe, which he said was expected to continue.

Whilst there were no visible signs of a recovery in its fine paper business in the US, and in the light of no marked changes to its other market sectors, Leslie said the next quarters earnings would be at a similar level to the last quarter.

At the same time he said there was also unlikely to be an improvement in its earnings for the full fiscal year, given the delay in any turnaround in the US market.

by Andy Scott