Athlone Extrusions' operating profits for the year to September 30th have remained flat at €5,543,000 (£4.37 million). The company's turnover was down slightly at €36,714,000 (£28.9 million) compared to €37,608 million for the 12 months to September 30th last year.

The Westmeath-based plastics manufacturer issued a profit warning last March, just a year after its shares were listed, blaming a decline in its British business. As a result its pre-tax profits and turnover were down by 9 per cent at the interim stage.

Yesterday, Athlone's group managing director Mr James McGee said the company had made a good recovery in the second half of the year. He said the company had managed to offset its poor UK business by increasing business in EU and non-EU countries. The company's operating profits were up 14 per cent in the second half of the year.

The British market has shown recovery signs, but Mr McGee said the company was treating it cautiously. It planned to have not more than 50 per cent of its business dependent on that market.

The company's finance director Mr Enda Cunningham said the company continued to enjoy high margins of 14-15 per cent on its products and would be able to achieve this through being an efficient low-cost producer.

"We are quite pleased to have come out with these results," he said, "but we would not be happy with the first year's trading. We have shown that we can replace the UK business with other business in Europe," he said.

The company, which now employs 179 people, added two new lines to its business last year. It manufactures materials used in a range of items - including in commercial vehicles, shower units and other sanitary ware. The company's retained profits for the year are €3.3 million, compared to €2.42 million last year. It is increasing the dividend from €3 (£2.36) to €3.3 (£2.60)

Athlone's current gearing is 3 per cent. Mr McGee said the company could spend up to £25 million on an acquisition, although he stressed there was nothing on the horizon.

Earlier this year the directors bought a further 9.6 per cent of the company from former chairman Mr Pat Plunkett, for just under £2.9 million, and ABNAmro, for under £2.9 million. Mr McGee said they had bought the shares to make money. He and the other directors said they had been disappointed with the share's performance and felt the share price was undervalued. The shares were floated at €1.16 (91p). They closed yesterday at €1 (79p), down two cents on the day. They had risen by 22 cents to €1.02 ahead of the results.

The directors now hold around 30 per cent of the company. Employees own a further 6 per cent, with 19.6 per cent being held by Ms Celine Ryan, widow of Athlone's founder. Irish and British institutions own 27 per cent.