Field warns on effects of strong pound

Field Group, the UK's leading maker of folding cartons, yesterday added its voice to those warning that the pound's recent strength could threaten Britain's export industry.

Keith Gilchrist, chief executive, said he was worried about the effects of sterling's recent strength on his export customers. At 2.40 or 2.45 marks to the pound, Field was "quids in", he said, but the extent to which it rises above the current rate of 2.52 marks raised concerns about the nation's export performance. "We need to watch it," he said.

Despite Mr Field's worries, he remained confident about the rest of the year as he unveiled a 16 per cent rise in pre-tax profits to pounds 10.5m for the six months to September. The interim dividend rises 11 per cent to 3.1p.

The chief executive said the figures had been driven by new business, which had lifted Field's share of the pounds 1.1bn UK folding carton market by two percentage points from last year's 15 per cent. The group, the biggest supplier of printed packets and boxes for the tobacco, alcoholic drinks and confectionery industries, had taken on larger contracts from fewer customers, but was doing the work more efficiently, according to Mr Field. This helped boost operating margins from 9.6 per cent to 10.1 per cent in the latest period.

Mr Field refused to be drawn on which customers were placing the new business, but said they continued to do particularly well in confectionery and tobacco. Capital expenditure of pounds 25m this year will be twice the level of depreciation and a similar figure is being pencilled in for next year.