The South African 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 the PM14 paper machine 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 stronger demand being seen in Europe, which he said was expected to continue.

Story by Andy Scott