Una McCaffrey

The euro's strength against sterling was the main driver behind a 12 per cent drop in profits at print group Oakhill over the first half.

Operating profits within the company's continuing businesses fell back to €1.5 million from €1.7 million, while sales were 2 per cent lower at €22.9 million.

When currency fluctuations are stripped out, however, turnover within continuing operations was 6 per cent higher, while operating profits were 1 per cent ahead.

Oakhill chairman Mr Martin Delaney said he expected the trading environment to "remain competitive" over the rest of the year.

On a divisional basis, like-for-like sales in Oakhill's managed services business were 12 per cent higher. Operating profit, however, fell by 29 per cent, reflecting a shift towards lower-margin activities in the first half of this year.

Mr Delaney said this move had been expected, and described the overall performance within managed services as "strong".

Speciality print sales were 65 per cent ahead in constant-currency terms, with books and journals key factors within the increase.

Pre-tax profits across the group rose by 42 per cent to €636,000, with much of the jump attributable to the company's emergence from a radical restructuring that saw a number of exceptional charges push down profits in 2002.

The company completed the sale of Meridian Printing in February of this year, using the net proceeds of $5.7 million (€5.05 million) to pay down bank debt.

Net debt fell from €12.6 million to €3.3 million in the year to June 30th. Shares in Oakhill, which was spun off from James Crean in 1999, were unchanged at eight cents last night.