Oakhill Group, the print and packaging company, is to sell its packing side and concentrate on print.

Announcing a 26 per cent drop in pre-tax profit to €2.7 million (£2.13 million) in the six months ended June 30th, 2000, Oakhill - which was formed from the demerged print and packaging division of James Crean - said it is exiting packaging because of its small size and competition from international "critical mass" groups. It noted its printing competes in the polystyrene packaging market in the UK and overcapacity continues to exert downward pressure on prices.

Oakhill has reached conditional agreement to sell its packaging division to Brodr Sunde, a producer and converter of expanded polystyrene in the European market. The consideration is £10.5 million sterling (€17.4 million) for net assets (excluding goodwill and net debt) of £6.5 million, of which around £6.3 million will be paid in cash on completion and the balance on collection of the outstanding debtors in Foam Plus and Lochaber Box.

The packaging division had a turnover of £21.1 million sterling (€34.9 million) and operating profits, before corporate costs and goodwill amortisation, of £1.78 million in 1999. The net assets at completion, including goodwill, are expected to be some £9 million sterling.

The disposal will have to be approved by the Oakhill shareholders at an e.g.m. The latest results show a rise in sales from €52.73 million to €57.5 million and a drop in earnings per share from 4.58 cents to 3.65 cents. An interim dividend of 0.5 cents per share has been declared.