Boxmore International, the Northern Ireland packaging group, has recorded a 19.3 per cent drop in pre-tax profit to £13.6 million sterling (€20.3 million) in 1998 from £16.86 million sterling (€25.19 million) in 1997. The decline was expected and follows the reversal in the first half, the first since it gained a share quotation a decade ago. The market reacted negatively to the results, marking the shares down 17 cents to 210 cents in Dublin. However, despite the profit fall, shareholders will receive a bigger payout. A final dividend of 2.4725p (3.69 cents) net per share has been declared, making a total of 3.5475p (5.29 cents), representing an increase of 7.5 per cent.

This, the chairman, Sir David Fell, said, reflected the group's confidence in the future. "We remain committed to our longterm growth objectives and are confident that the actions we have taken in 1998 will help us to achieve them."

Brokers are forecasting profits of £15 million sterling to £15.8 million sterling for 1999.

While this would represent a recovery on 1998, profits will still be below 1997. However, Boxmore is expected to be back on the growth trail in 2000. "Our group starts 1999 from a platform of state-of-the-art capital equipment and the introduction of new products and processes," said the chief executive Mr Mark Ennis.

"Our main concern going forward is the continued depressed state of the UK economy and reports of a slowdown in some of the other major European economies, which, if substantiated, would create a difficult trading environment in the year ahead."

However, he pointed to the significant investment - £29 million last year - which has created a strong base. This, he added, should lead to "sustainable longterm growth well into the new millennium".

Reviewing the latest results, which saw earnings per share drop from 16.30p (24.33 cents) to 13.37p (19.96 cents), Boxmore said they reflected the negative impact of currency crises, as well as poor weather. They also reflected increased interest costs, the negative impact of the start-up costs of the Chinese operation and an exceptional property disposal profit.

Group sales rose by 6.1 per cent to £106.85 million (€159.48 million). Boxmore remains in a strong financial position, with net debt of £25.59 million (€38.19 million), giving a gearing of less than 50 per cent. Interest is comfortably covered at 9.3 times.

Boxmore invested almost £18 million in its pharmaceutical and healthcare division. Underpinning this sector is the 60 per cent of revenue which will be derived from contracts of over three years in duration. Strong growth is anticipated for 1999.

The food and drinks division supplies plastic containers and has operations in Northern Ireland, the Republic and South Africa. The Northern Ireland operations were affected by the strength of sterling, the currency crisis in Russia and the poor summer, and margins were down despite a 7 per cent volume increase in the final quarter.

By contrast, the South African operations "continued to go from strength to strength", the chairman said. The company, he added, was now well placed to achieve strong double digit growth in PET plastic packaging in the region.

The group's chemical and industrial division has continued to identify areas of future growth despite negative external influences. New product ranges are expected to lead to improved profits through greater utilisation of capacity.