Interim results for the six months ended 30 June showed adjusted profit before tax up by 9% to £17.4m, while adjusted earnings per share were up 11% to 46.82p.
Although sales were down to £265.8m, from £281.1m, profits from operations were £1m higher than H1 2014.
John Langlands, BPI chief executive, told Packaging News sales were down due to a surge in raw material costs in the second quarter, combined with the weak Euro.
Despite this, profits volumes moved ahead and the European business reaped the benefits of increased sales capacity following equipment installation in 2014.
“Margins were squeezed due to raw material prices. It really came as a surprise when prices increased significantly in Q2,” said Langlands.
In the UK, profits were marginally ahead at £7.5m, despite margin pressure in the retail-facing sector.
Part of the business sells to the retail sector – volumes and margins were difficult in the supermarket sector.
Volumes in the UK business’ plain films sector increased but margins suffered from the polymer price increases.
BPI continued its capital investment programme this year, with £9.1m invested in the first half of 2015.
It has continued to upgrade the extrusion lines at its Bromborough site, with three new lines fully operational.
An additional five layer coextrusion line has been ordered for delivery in early 2016.
Langlands said the Bromborough upgrade was carried out to cater for business from the food sector.
He added that there was a similar investment in Scotland.
Profits from BPI’s European business rose by 6.5% to €13.1m with a 7% increase in sales volumes over all three sites. But due to the weak Euro, on translation into Sterling, European profits fell by 5% to £9.6 million.
Additionally, the North American business in agricultural films was transformed from loss-making to profit after full operation of a new line.
The company said it experienced an unusual season for sales of silage stretch-wrap, where overall market demand has been affected by a cool first half in Northern Britain and Ireland, and almost drought conditions in most of Central Europe.
“Despite the less than ideal conditions for growing grass, we have successfully managed to increase the sales of silage stretch-wrap for the first six months. This is mainly due to increased sales of our premium products that demonstrate excellent performance in the field, and offer significant benefits to our customers over standard silage stretch-wrap,” read a company statement.
Raw material costs fell during the first few months of the year, but accelerated to an all-time high during the second quarter.
Senior managers said the first six months were “the most difficult period of raw material price movements that they have ever encountered in their careers in the polythene film industry”.
Langlands added: “We continue with our investment programme for benefits in efficiency, quality and reduced energy costs.”
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