Athlone Extrusions has announced a 17.5 per cent increase in profits before tax and exceptional items to £4.23 million in its first set of annual results since the company floated last February.

The plastic sheet and film producer said it had consolidated its position as a leading supplier of plastics to the automotive, sanitary ware, toys and leisure and retail sectors in Europe. It also continued its growth in key product areas and in newer markets such as Australia, New Zealand and undertook a £2.9 million investment programme including the addition of a new production line.

Sales volumes rose by 17 per cent, while sales revenue increased by 22 per cent to £29.6 million, boosted by the strength of sterling against the Irish pound. This did not translate through to profits, however, because of the company's policy of covering forward to hedge against exchange rate fluctuations.

Athlone said it had also made further progress in improving the spread and balance of its products with high value-added products accounting for an increasing proportion of the company's business. Polystyrene accounted for 59 per cent of production last year compared with 66 per cent the previous year while the ABS share of production rose to 38 per cent of the total from 32 per cent.

The company described acrylic-capped ABS, a high value-added product, as the "star performer" with overall tonnage rising by 144 per cent while sales were up 137 per cent.

"We are not looking to pile it high, sell it cheap. We are looking at niche value-added areas," chief executive Mr James McGee said.

Athlone's dependence on the British market was also reduced during the year. The UK accounted for 59 per cent of sales in 1998, down from 68 per cent previously, and the company aims to get that figure down to 50 per cent in the next couple of years. Although the outlook for the British market remains uncertain, the company aims to make further progress based on the geographical spread of the business and anticipated growth in the higher valued added product areas.

In addition to growing the company's business in niche areas, Athlone remains on the lookout for an acquisition in continental Europe, although Mr McGee stressed the company would not buy something simply for the sake of it.

"Location is very important but it is also important to us to get another product or two to add to the range that we have," he said. The company, which has net cash of more than £1 million, could comfortably spend up to £15 million on an acquisition but would be prepared to gear up if something larger came along.

Earnings per share, before an exceptional charge of £750,000 to purchase shares in the group for issue to non-managerial employees, increased by 10 per cent to 7.54 pence while the final dividend was raised to 1.57 pence from 1.43p.