Final Results

API Group PLC
05 December 2006



                                                                 6 December 2006


                                 API GROUP PLC

            Preliminary Results for the year ended 30 September 2006



  • Refocusing of Group is yet to be reflected in results.

  • Sales from foils businesses rose by 5% on a worldwide basis, but European
    foils and laminates businesses performed poorly, adversely impacting Group
    results.

  • Geographically, US and Asia Pacific regions performed strongly while
    European business faced reduced demand and competitive pressures.

  • Group sales reduced by 3.4% to £102.0m and operating profit before
    goodwill and exceptional items reduced to £1.0m (2005: £3.6m).

  • After charging exceptional items and interest, loss before tax from
    continuing operations was £1.8m (2005: profit £1.6m)

  • Basic loss per share of 10.1p (2005: 28.7p loss).

  • Net borrowings increased by £8.8m to £15.5m, in part reflecting increased
    capital expenditure which related primarily to the construction of a major
    new facility in China.

  • Further progress is expected in the current year as a result of expansion
    in China, which is expected to begin delivering benefits in 2007,
    strengthening position of US business and steps taken to improve European
    performance.



Commenting Richard Wright, Chairman of API, said:

'Whilst these results are broadly in line with our comments in July, they are
nevertheless disappointing at a financial level. However, operationally, good
progress has been made and strategic objectives met. The business is better
focused, has a good presence in the US and Asia Pacific and is addressing the
demand and competitive pressures in Europe. We are also making good progress in
the development of our new foils facility in China, which we expect to see
coming on stream in 2007. These all provide good opportunities for the future
development of the Group.'



Enquiries:

API Group plc                                        01625 858 700

David Walton, Chief Executive


Financial Dynamics                                   020 7831 3113

Tim Spratt/Nicola Biles



Extracts from Chairman's Statement

After several years of restructuring, API has successfully repositioned itself
as a focussed provider of specialised foil and laminate products for use in the
packaging and labelling of luxury and premium-branded consumer goods. As one of
only three truly global providers of such products, API is well placed to take
advantage of the increasing demand for luxury and premium-branded goods
worldwide.

The Group is pursuing a business strategy which will deliver sustainable
competitive advantages in each of its markets. Sales coverage in key
geographical territories and market sectors is being expanded, product ranges
around the world are being improved and rationalised and manufacturing is being
concentrated in centres of excellence in lower cost economies. In support of
this strategy, we have completed the acquisition of a distributor in Germany and
committed to a major expansion of our already market-leading Chinese foils
business. In 2007, the foils business will expand into Italy and the laminates
business will continue to pursue new business opportunities in Eastern Europe.



Operating Results

Although good progress has been made with strategic objectives, this has yet to
be reflected in the financial performance of the Group, which continued to be
disappointing due to mixed trading conditions.

Sales from continuing operations declined 3.4% to £102.0m during the current
year, while operating profit from continuing operations before exceptional items
reduced to £1.0m (£3.6m), reflecting the deterioration that occurred in the
Group's European businesses. After charging exceptional items of £0.9m and
interest of £1.9m, the loss before tax from continuing operations was £1.8m
(profit £1.6m).

The US and Asia-Pacific regions both performed strongly. However, weak demand
and intensifying competitive pressures impacted performance in certain
businesses in Europe. In response, a number of improvement initiatives have been
launched which we are confident will yield benefits during the current year.

Net borrowings increased by £8.8m during the period to £15.5m and represented
gearing of 66% at 30 September 2006. While the increase was partly attributable
to the poor trading performance, it also reflected the significant capital
expenditure incurred in connection with the new facility in China.



Dividend

In view of the increase in gearing during the year and the disappointing
financial performance, the Board is not recommending the payment of a dividend.
Cash generated from operations will be reinvested in the business.



Board Changes

Following the retirement of David Hudd at the Annual General Meeting held on 1
February 2006, I was elected as Non-Executive Chairman and Andrew Walker, who
has been a Non-Executive Director of the Group since 2003, assumed the
responsibilities of Senior Independent Director and Chairman of the Remuneration
Committee. On the same date, Brian Birkenhead joined the Board as an Independent
Non-Executive Director and was appointed Chairman of the Audit Committee. Brian
brings a wealth of experience and knowledge having previously been Finance
Director of National Power and Johnson Matthey plc.

The Board was further strengthened later in the year by the appointment of
Martin O'Connell and Luke Wiseman. Martin O'Connell joined the Board on 1 May
2006 shortly after his retirement from Field Packaging, one of API's largest
customers. Luke Wiseman was appointed on 1 September 2006 as a representative of
Steel Partners II LLP, the Group's largest shareholder with a beneficial
interest of 29.5%. Both are regarded as non-independent for the purposes of
compliance with the Combined Code by virtue of their current or former executive
roles.



Accounting Reference Date

After due consideration, including consultation with major shareholders, the
Board has decided to change the Group's accounting reference date to 31 March.
The Group's financial performance is generally highly dependant on trading in
the summer months and the change in accounting reference date is intended to
facilitate the continued provision to shareholders of timely and accurate
guidance on likely outcome for the year. The change in accounting reference date
will be achieved by the adoption of an eighteen month transitional accounting
period commencing on 1 October 2006 and ending on 31 March 2008.



Extracts from Chief Executive's Review and Business Review

This has been another challenging year for the Group, with several of our
businesses experiencing tough market conditions. Despite this, the upward trend
in performance in the US operations was maintained and the businesses in the
Asia-Pacific region, including the Chinese joint venture, continued to perform
strongly. In contrast, the performance of the European business was
disappointing. Whilst holographic foils performed well, the general foils
business struggled in the face of tough competition and the laminates business
experienced weak underlying demand resulting in a significant reversal in
fortunes compared with the previous year.

On a worldwide basis, the Group's foil activities increased their sales by 5%.
The strategically important US and Chinese foils businesses both performed well,
as did the European holographic foil business. In contrast, the European foils
business performed poorly and the situation was worse in Laminates, where sales
fell by 15%.

Operating margins and profitability improved in the US and Chinese foils
business and in the European holographic foils business, while the general foils
and laminates businesses in Europe both experienced a sharp decline in
profitability due to lower sales.

Each of our businesses experienced upward pressure on raw materials and utility
prices during the period. Whilst the impact of raw material price movements was
mitigated by more effective purchasing and reductions in avoidable waste, it
proved more challenging to offset the impact of increases in utility prices,
which were particularly severe in the US. As a major user of both electricity
and gas, reducing overall consumption is an area on which we intend to focus
much more actively in future.

Some time ago, the Board recognised that changes in customer behaviour and
purchasing preferences were beginning to adversely impact the performance of the
foils business in the US and Europe. As in most industries, customers are
demanding higher quality, increased versatility, lower cost and improved
service. Competition amongst leading western manufacturers has intensified and
in recent years, significant improvements in quality and consistency have lead
to greater acceptance of lower-cost foils from the Far East, particularly in the
European market.

As one of only three large, international manufacturers of foil products, API is
well-placed to respond to these challenges. To achieve success in such dynamic
markets, we believe that the foils business needs to continually evolve, invest
for the future and pursue distinct strategies in its sales and distribution,
manufacturing and holographic activities.

In sales and distribution, we are working hard to become a more responsive and
customer focused organisation and will achieve this through improved sales
coverage and better service delivered through a broader base of distribution
capabilities located in key markets. During 2006, we strengthened our sales
force in both the US and Europe, commenced the reorganisation of our UK
distribution operations and successfully integrated a distributor that we
acquired in Germany. During 2007, we will complete the reorganisation in the UK
and establish a sales and distribution operation in the large, strategically
important Italian market.

To compete successfully in challenging and increasingly international markets,
the foils business needs a product range that delivers enhanced performance and
functionality at ever reducing cost. This is being achieved through continuous
development and rationalisation of our existing product ranges, improvement in
productivity in our US and European operations and the migration of
manufacturing to modern, efficient facilities in low-cost locations such as the
US mid-West and China.

During 2006, we introduced a range of versatile general purpose foils
manufactured exclusively in China that has been very well received in western
markets. We also began construction of a new 300,000 square foot foil
manufacturing facility in China. Scheduled for completion in mid-2007, this will
house our existing Chinese business and will become our main world-wide
production centre for mainstream, high-volume products. As output from China
increases, manufacturing facilities in the US and Europe will be progressively
refocused on production of more specialised and more technically demanding
products where fast moving niche markets require responsive local supply.

Our European holographic foils business continues to strengthen its position as
a leading supplier of high-quality holographic foils and embossable base
materials for both security and decorative applications. During 2006, we
invested in additional capacity, all of which was fully utilised by the end of
the year. In 2007, we will further increase capacity and will also bring to the
market new developments in UV embossing technology. API is now firmly
established as a leader in its chosen markets and we are evaluating options for
continued development and expansion in this attractive and exciting sector.

API's laminates business has enjoyed a market leading position in Europe for
many years. However, it currently faces a number of strategic challenges, the
most significant of which are its dependence on a small number of large
customers and the emergence of a high-quality printing and converting industry
in Eastern Europe. Increasingly, large customers are looking to lower cost
producers to source packaging currently manufactured in the UK, France, Italy or
Germany. Whilst those producers are currently content to source their raw
materials from premier western manufacturers, such as API, it is inevitable that
in time local sources will be sought.

We are working hard to defend our position through improving manufacturing
efficiency and reducing production costs in our UK facility and are also
actively evaluating opportunities in Eastern Europe to address the cost
challenges we face from existing customers and to target emerging local markets.



Americas

The US foils business continued to focus on improving productivity, efficiency
and customer service levels and was able to maintain the steady upward trend in
performance that has been evident since 2004. Sales increased by over 15% in the
current year and operating margins improved dramatically. There was continued
strong demand for products in the metallic-ink and greetings cards sectors and
increasing penetration of the general label and carton markets.

In recent months, as the US foils business has grown, it has effectively become
capacity constrained. We have successfully introduced products that are
part-manufactured in China and these have been well received by customers.
However, there are limits on the volumes that can be obtained in this way in
advance of the completion of the new Chinese manufacturing facility.
Consequently, we are evaluating options for expanding capacity in the relatively
near future in the US to enable us to more aggressively target new sectors in
which the business currently has a relatively limited presence.

During 2006, as part of our continuing commitment to minimise the impact of our
manufacturing processes on the environment, we invested heavily in upgrading the
emissions management systems in each of our US facilities. This involved the
full enclosure of most solvent using equipment, together with the installation
of state-of-the-art regenerative thermal oxidation equipment to achieve clean
emissions. We also invested in a new, large-format metalliser to both improve
productivity and provide a degree of back-up in the event of equipment failure
in one or other of our manufacturing facilities.



Asia-Pacific

In the Asia-Pacific region, sales increased by 4% following a recovery in the
demand for holographic products in the tobacco sector and strong growth in sales
of new products in the Chinese domestic market. Exports also grew as a
proportion of total sales, with an increase in the value of products sold to
other API Group companies and particularly strong growth in India and Russia.
The increase in sales would have been greater, but for teething problems
encountered during the summer months in the manufacture of a new range of
high-performance, general purpose foils for the European market.

The construction of the new factory near Shanghai is progressing well. Following
completion of the land purchase earlier in the year, construction began in
earnest during June. Erection of the main factory building is now well advanced.
Orders have already been placed for new coating and metallising equipment and we
are optimistic that the new factory could be operational and in production as
early as the middle of 2007.



Europe



Foils

In the European foils business, sales declined slightly despite the successful
introduction of a number of new products and the extension of our sales and
distribution capabilities into the strategically important German market through
the acquisition of MEPA. Whilst the holographic foils business continued to
perform well, growing sales and maintaining margins, the general foils business
suffered as tough competition resulted in an underlying deterioration in sales
and margin erosion.

The difficulties of the European foils business were compounded by constraints
on the availability of product from China. The current Chinese factory is
operating under government imposed limits on solvent emissions which restrict
output until such time as the relocation to the new facility is complete. The
position was further exacerbated over the summer months by unforeseen technical
problems caused by the unusual heat and humidity experienced in Shanghai. This
resulted in a supply interruption for several months, the destruction of
significant quantities of inventory and the requirement to manufacture at
additional cost in facilities in the UK and US to maintain supply to customers.
Problems of this nature have been addressed in the design of the new Chinese
factory.

In contrast to the above, the holographic foils business performed well
achieving record levels of profitability on sharply increased sales.
Improvements in the performance of key products and investment in additional
manufacturing capacity enabled the business to consolidate its position as a
leading supplier to the European security industry and a number of major new
contracts were won. We continue to invest in both people and technology and are
confident that further profitable growth will occur.


Laminates

The Laminates business had a very difficult year as a number of major customers
reduced expenditure on laminated board products, either due to reductions in
their own promotional budgets or, in a small number of cases, the decision to
switch away from laminates for cost or other strategic reasons. Sales reduced by
15%, and in a business with high operational gearing and a relatively small
number of alternative sources of revenue, this inevitably resulted in a steep
decline in profitability.

In response to the decline in sales during the first half, the workforce was
reduced and a number of other cost reduction and performance improvement
measures were initiated. The actions taken during the summer months have
resulted in an improvement in the performance and the business has traded
profitably in recent months. We were also successful in winning a number of
significant pieces of new business during the second half and volumes under
these contracts are ramping up satisfactorily.

The business remains under pressure as customers evaluate the merits of less
expensive, although less visually attractive, alternatives to laminated board
and as the migration of large-scale carton production to Eastern Europe
continues. Both of these factors contribute to intense pressure on margins and
we continue to constantly review the actions that can be taken to improve
productivity and reduce production costs.



Prospects

The Group is committed to a number of strategic initiatives which we believe
will significantly enhance its competitive position over time. The relocation
and expansion of our operations in China and the strengthening position of our
US business, together with the steps we have taken to improve performance in
Europe, provide exciting opportunities for the future development of the Group.

Despite the temporary difficulties experienced in certain of our European
businesses, the Board continues to believe that the Group is well positioned to
take advantage of the growth that is occurring in each of its core markets. We
continue to see strong performance from our businesses in the US and
Asia-Pacific and are confident that the action taken in our European businesses
will deliver improvement during the current year. We remain confident that the
initiatives outlined above will deliver appropriate returns to our shareholders
in due course.




Group Income Statement
for the year ended 30 September 2006

                                                                          2006           2005
                                                                         £'000          £'000

Continuing operations
Revenue                                                                101,979        105,570
Cost of sales                                                         (80,656)       (82,767)
Gross profit                                                            21,323         22,803

Other operating costs                                                 (20,329)       (19,241)


Operating profit before exceptional items                                  994          3,562

Exceptional items:
Restructuring                                                            (863)          (226)
Professional expenses incurred in respect of takeover                        
approach                                                                     -          (204)

Operating profit from continuing operations                                131          3,132

Finance revenue                                                             85            117
Finance costs                                                          (1,698)        (1,524)
Other finance expense - pensions                                         (311)          (142)
                                                                       (1,924)        (1,549)

(Loss) / profit on continuing activities before taxation               (1,793)          1,583
Tax expense  - UK                                                        (122)            (3)
             - Overseas                                                  (613)          (501)
(Loss) / profit from continuing operations                             (2,528)          1,079

Discontinued operations
Loss from discontinued operations                                        (230)       (10,149)

Loss for the period                                                    (2,758)        (9,070)

Attributable to:
Profit attributable to minority equity interest                            695            574
Loss attributable to equity holders of the parent                      (3,453)        (9,644)
Total loss for the period                                              (2,758)        (9,070)


Earnings per share (pence)
Basic (loss) / earnings per share from continuing                
operations                                                               (9.4)            1.5
Diluted (loss) / earnings per share from continuing                   
operations                                                               (9.1)            1.4
Basic loss per share on loss for the period                             (10.1)         (28.7)
Diluted loss per share on loss for the period                            (9.8)         (27.6)



Group Statement of Recognised Income and Expense
for the year ended 30 September 2006

                                                                         2006            2005
                                                                        £'000           £'000


Exchange differences on retranslation of foreign operations             (972)             604
Actuarial (losses) / gains on defined benefit pension plans           (1,311)           1,920
Tax on items taken directly to or transferred from equity                 393           (708)

Net (expense) / income recognised directly in equity                  (1,890)           1,816
Loss for the period                                                   (2,758)         (9,070)

Total recognised income and expense for the year                      (4,648)         (7,254)

Attributable to:

Equity holders of the parent                                          (5,176)         (7,993)
Minority equity interests                                                 528             739
                                                                      (4,648)         (7,254)



Group Balance Sheet

at 30 September 2006


                                                                         2006            2005
                                                                        £'000           £'000
Assets
Non-current assets
Property, plant and equipment                                          30,500          28,692
Intangible assets                                                       6,480           6,480
Deferred tax asset on defined benefit pension plan                      3,263           3,151
Other receivables                                                           -           2,000
                                                                       40,243          40,323
Current assets
Trade and other receivables                                            20,112          17,824
Inventories                                                            13,195          12,614
Cash                                                                    4,909          10,396
                                                                       38,216          40,834


Total assets                                                           78,459          81,157

Liabilities
Current liabilities
Trade and other payables                                               22,306          23,306
Financial liabilities                                                   1,758           2,102
Income tax payable                                                        379             327
Provisions                                                                306             593
                                                                       24,749          26,328
Non-current liabilities
Financial liabilities                                                  18,674          14,980
Deferred tax liabilities                                                  659             818
Provisions                                                                 93             109
Defined benefit pension plan deficit                                   10,879          10,503
                                                                       30,305          26,410

Total liabilities                                                      55,054          52,738

Net assets                                                             23,405          28,419

Equity
Called up share capital                                                 8,612           8,592
Share premium                                                             244             211
Capital redemption reserve                                                549             549
ESOP reserve                                                            (251)           (251)
Foreign exchange reserve                                                (366)             439
Retained earnings                                                       9,179          13,419

API Group shareholders' equity                                         17,967          22,959

Minority interest                                                       5,438           5,460

Total equity                                                           23,405          28,419





Group Cash Flow Statement
for the year ended 30 September 2006


                                                                         2006            2005
                                                                        £'000           £'000


Operating activities
Group operating profit                                                    131           3,132
Adjustments to reconcile group operating profit to

net cash flows from operating activities
Operating loss from discontinued operations                             (230)         (1,974)
Depreciation and impairment of property, plant and                  
equipment                                                               3,457           4,412
(Profit) / loss on disposal of property, plant and                       
equipment                                                                (22)             149
Share-based payments                                                      131              87
Difference between pension contributions paid and amounts             
recognised in the income statement                                      (835)            (378)
Decrease in inventories                                                 (870)            (892)
(Increase) / decrease in trade and other receivables                    (523)            6,043
Decrease in trade and other payables                                  (1,120)          (6,424)
Movement in provisions                                                  (293)            (590)

Cash (used in) / generated from operations                              (174)            3,565
Income taxes paid                                                       (656)            (563)
Net cash flow from operating activities                                 (830)            3,002

Investing activities

Interest received                                                          85              117
Purchase of property, plant and equipment                             (6,140)          (4,806)
Sale of property, plant and equipment                                     244               50
Purchase of subsidiary undertakings                                         -          (1,069)
Sale of subsidiary undertakings                                             -            8,033

Net cash flow from investing activities                               (5,811)            2,325


Financing activities

Interest paid                                                         (2,047)          (1,483)
Dividends paid to minority interests                                    (487)            (788)
Proceeds from share issues                                                 53              340
Cash received from exercise of share options                                -              347
New borrowings                                                          1,956                -
Repayment of borrowings                                                     -          (5,310)

Net cash flow from financing activities                                 (525)          (6,894)
Decrease in cash and cash equivalents                                 (7,166)          (1,567)
Effect of exchange rates on cash and cash equivalents                     116              244
Cash and cash equivalents at the beginning of the period               10,396           11,719

Cash and cash equivalents at the end of the period                      3,346           10,396




Notes


Segmental analysis

The primary segment reporting format is determined to be geographical.  At 30
September 2006, the Group is organised into three distinct independently managed
geographic segments, Europe, North America and Asia Pacific.  Secondary segment
information is reported by business segment.



Primary reporting format
                                          2006           2006       2006         2005           2005       2005
                                         £'000          £'000      £'000        £'000          £'000      £'000
By Geographical segment             Continuing   Discontinued      Total   Continuing   Discontinued      Total
Total revenue by origin
Europe                                  74,845              -     74,845       79,220         13,278     92,498
North America                           25,958            129     26,087       22,806            181     22,987
Asia Pacific                            13,035              -     13,035       12,614              6     12,620
                                       113,838            129    113,967      114,640         13,465    128,105
Inter-segmental sales
Europe                                   9,593              -      9,593        7,007            647      7,654
North America                              494              -        494          933             38        971
Asia Pacific                             1,772              -      1,772        1,130              -      1,130
                                        11,859              -     11,859        9,070            685      9,755
External sales by origin
Europe                                  65,252              -     65,252       72,213         12,631     84,844
North America                           25,464            129     25,593       21,873            143     22,016
Asia Pacific                            11,263              -     11,263       11,484              6     11,490
                                       101,979            129    102,108      105,570         12,780    118,350
External sales by destination
UK                                      34,398             14     34,412       40,460          6,024     46,484
Continental Europe                      25,467              -     25,467       26,516          5,474     31,990
Americas                                25,769            106     25,875       22,205            181     22,386
Asia Pacific                            12,681              9     12,690       12,498          1,053     13,551
Rest of World                            3,664              -      3,664        3,891             48      3,939
                                       101,979            129    102,108      105,570         12,780    118,350
Segment Result
Operating profit / (loss)
Europe
before exceptional items                   205              -        205        4,290        (1,213)      3,077
exceptional items                        (597)              -      (597)            -             46         46
                                         (392)              -      (392)        4,290        (1,167)      3,123
North America
before exceptional items                 1,521           (53)      1,468          425          (307)        118
exceptional items                        (242)          (177)      (419)            -          (500)      (500)
                                         1,279          (230)      1,049          425          (807)      (382)
Asia Pacific
before exceptional items                 1,276              -      1,276        1,066              -      1,066
exceptional items                            -              -          -         (36)              -       (36)
                                         1,276              -      1,276        1,030              -      1,030
Central costs
before exceptional items               (2,008)              -    (2,008)      (2,219)              -    (2,219)
exceptional items                         (24)              -       (24)        (394)              -      (394)
                                       (2,032)              -    (2,032)      (2,613)              -    (2,613)
Total operating profit / (loss)            994           (53)        941        3,562        (1,520)      2,042
before exceptional items
Total operating profit / (loss)            131          (230)       (99)        3,132        (1,974)      1,158
Share of operating loss in joint        
venture                                      -              -          -            -           (55)       (55)
                                           131          (230)       (99)        3,132        (2,029)      1,103
Loss on disposal of discontinued         
operations                                   -              -          -            -        (8,120)    (8,120)
Profit / (loss) on ordinary        
operations before interest and
taxation                                   131          (230)       (99)        3,132       (10,149)    (7,017)
Net finance costs                      (1,613)              -    (1,613)      (1,407)              -    (1,407)
Other finance expense - pensions         (311)              -      (311)        (142)              -      (142)
Profit / (loss) before taxation        (1,793)          (230)    (2,023)        1,583       (10,149)    (8,566)
Income tax                               (735)              -      (735)        (504)              -      (504)
Net profit / (loss) for the year       (2,528)          (230)    (2,758)        1,079       (10,149)    (9,070)



Notes (continued)



Segmental analysis (continued)



Primary reporting format
                                          2006           2006       2006         2005           2005       2005
                                         £'000          £'000      £'000        £'000          £'000      £'000
Assets and liabilities              Continuing   Discontinued      Total   Continuing   Discontinued      Total
Segment assets
Europe                                  50,885              -     50,885       53,110              -     53,110
North America                           14,726             22     14,748       14,637             45     14,682
Asia Pacific                            12,826              -     12,826       13,365              -     13,365
Total assets                            78,437             22     78,459       81,112             45     81,157
Segment liabilities
Europe                                  49,428              -     49,428       47,399              -     47,399
North America                            3,914              -      3,914        3,693              7      3,700
Asia Pacific                             1,712              -      1,712        1,639              -      1,639
Total Liabilities                       55,054              -     55,054       52,731              7     52,738
Other segment information
Capital expenditure
Europe                                   2,280              -      2,280        2,910            435      3,345
North America                            1,468              -      1,468        1,160              9      1,169
Asia Pacific                             2,392              -      2,392          292              -        292
                                         6,140              -      6,140        4,362            444      4,806
Depreciation
Europe                                   2,413              -      2,413        2,737            449      3,186
North America                              617             41        658          795             60        855
Asia Pacific                               386              -        386          371              -        371
                                         3,416             41      3,457        3,903            509      4,412
Impairment
Europe                                       -              -          -            -            190        190
North America                                -              -          -            -            212        212
Asia Pacific                                 -              -          -            -              -          -
                                             -              -          -            -            402        402

Secondary reporting format

By business segment
Total sales
Foils                                   76,584              -     76,584       71,012              -     71,012
Laminates                               37,254              -     37,254       43,628              -     43,628
Metallised Paper                             -              -          -            -          3,351      3,351
Converted Products                           -              -          -            -          9,933      9,933
Chromagem                                    -            129        129            -            181        181
                                       113,838            129    113,967      114,640         13,465    128,105
Inter-segmental sales
Foils                                   11,859              -     11,859        9,070              -      9,070
Laminates                                    -              -          -            -              -          -
Metallised Paper                             -              -          -            -             11         11
Converted Products                           -              -          -            -            636        636
Chromagem                                    -              -          -            -             38         38
                                        11,859              -     11,859        9,070            685      9,755
External sales
Foils                                   64,725              -     64,725       61,942              -     61,942
Laminates                               37,254              -     37,254       43,628              -     43,628
Metallised Paper                             -              -          -            -          3,340      3,340
Converted Products                           -              -          -            -          9,297      9,297
Chromagem                                    -            129        129            -            143        143
                                       101,979            129    102,108      105,570         12,780    118,350
Other segment information
Segment assets
Foils                                   48,725              -     48,725       49,370              -     49,370
Laminates                               15,172              -     15,172       13,751              -     13,751
Head Office                             14,540              -     14,540       17,991              -     17,991
Chromagem                                    -             22         22            -             45         45
Total assets                            78,437             22     78,459       81,112             45     81,157
Capital expenditure
Foils                                    4,720              -      4,720        1,953              -      1,953
Laminates                                  806              -        806          376              -        376
Head Office                                614              -        614        2,034              -      2,034
Metallised Paper                             -              -          -            -            372        372
Converted Products                           -              -          -            -             62         62
Chromagem                                    -              -          -            -              9          9
Total capital expenditure                6,140              -      6,140        4,363            443      4,806



Notes (continued)



Operating profit
                                                                        2006             2005
                                                                       £'000            £'000
Exceptional items charged against operating profit from continuing
operations comprise:
Restructuring of operating businesses                                    651              390
Charlotte facility closure costs                                         242                -
London office closure costs                                                7               82
Release of provision for vacant property                                (37)                -
Release of provision for legal claims                                      -            (246)
Professional expenses incurred in respect of takeover approach             -              204
                                                                         863              430



Exceptional items are material items which derive from events or transactions
that fall within the ordinary activities of the group and which need to be
disclosed by virtue of their size or incidence.



Earnings per share
                                                                        2006             2005
                                                                       £'000            £'000
Continuing operations
Net (loss) / profit attributable to equity holders of the parent     (3,223)              505
Exceptional items after tax attributable to equity holders of the 
parent                                                                   863              430
Net  (loss) / profit from continuing operations before exceptional 
items                                                                (2,360)              935
attributable to equity holders of the parent
Discontinued operations
Net loss attributable to equity holders of the parent                  (230)         (10,149)
Loss on disposal of discontinued operations attributable to equity         -            8,120
holders of the parent
Exceptional items attributable to equity holders of the parent           177              454
Net loss from discontinued operations before exceptional items       
attributable to equity holders of the parent                            (53)          (1,575)



                                                                        2006             2005
                                                                       pence            pence
Continuing operations
Basic (loss) / earnings per share                                      (9.4)              1.5
Diluted loss per share                                                 (9.1)              1.4

Discontinued operations
Basic loss per share                                                   (0.7)           (30.2)
Diluted loss per share                                                 (0.7)           (29.0)

Total
Basic loss per share                                                  (10.1)           (28.7)
Diluted loss per share                                                 (9.8)           (27.6)





Notes (continued)

Discontinued operations


Discontinued operations for the year represent the results of Chromagem, a
subsidiary which ceased trading during March 2006.  Discontinued operations in
prior year include the results of the Metallised Paper division and the
Converted Products division together with the loss incurred on disposal.  These
divisions were sold on 8 December 2004 and 20 January 2005 respectively.



                                                                        2006            2005
                                                                       £'000           £'000

Revenue                                                                  129          12,780
Expenses                                                                (359)       (14,754)
Operating loss and loss after tax for the period for discontinued    
operations                                                              (230)        (1,974)
Share of post tax loss in joint venture                                     -           (55)
Total operating loss: group and share of joint venture                  (230)        (2,029)
Loss on disposal of discontinued operations                                 -        (8,120)
Loss for the period from discontinued operations                        (230)       (10,149)



Basis of preparation

This is the first year in which the group has prepared its consolidated
financial statements under International Financial Reporting Standards ('IFRS').
The date of transition to IFRS was 1 October 2004.  The group has applied
optional exemptions available to it under IFRS 1. Comparative information at 30
September 2005 and for the year then ended has been restated from UK Generally
Accepted Accounting Practice (UK GAAP) to comply with IFRS.  The optional
exemptions applied in respect of IFRS 1 are set out in the group's interim
report for the six months ended 31 March 2006. Also included in the interim
report are the group's accounting policies and reconciliations to IFRS from the
previously published UK GAAP financial statements.

The accounts have been prepared using the accounting policies referred to above
and these policies have been consistently applied to all years presented.



Publication of abridged accounts

The preliminary announcement figures for the year ended 30 September 2006 and
the comparative figures for the year ended 30 September 2005 are an abridged
version of the Group's statutory accounts which carry an unqualified audit
report and do not contain a statement under S237 (2) or (3) of the Companies Act
1985.  The Group's audited statutory accounts for the year ended 30 September
2006 will be filed in due course with the Registrar of Companies.  The Group's
audited statutory accounts for the year ended 30 September 2005 have been filed
with the Registrar of Companies.

The Annual Report and Accounts for the year ended 30 September 2006 will be
posted to shareholders by 12 January 2007 prior to the Annual General Meeting on
30 March 2007.  Copies of the Annual Report and Accounts will be available to
members of the public from 15 January 2007 at the Group's registered office at
Second Avenue, Poynton Industrial Estate, Poynton, Cheshire SK12 1ND.


Contingent liabilities

The consideration for the sale of the Converted Products Division, which was
sold in January 2005, includes a deferred element totalling £2.0 million. It is
payable in January 2007 and, should the purchaser default, it is guaranteed by
an independent insurance company. A potential claim has been received from the
purchasers of the Converted Products Division, Tri-Q Limited which may affect
the recoverability of £750,000 of the deferred consideration. The Directors
consider that any claim will be unsuccessful and will robustly defend any legal
action. Legal advice obtained indicates that a successful outcome is probable
and consequently, no provision against the recoverability of the deferred
consideration has been made in the accounts.


End.





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