British Polythene Industries (BPI) said performance had improved since April but that results for the first half would still be behind those of last year.

British Polythene Industries (BPI) said performance had improved since April but that results for the first half would still be behind those of last year, partly due to the double-edged effect of the recent fall in the pound.

The Greenock-based packaging specialist, which suffered from falling demand from construction and manufacturing clients in the first three months, said it was enjoying a steadier second quarter.

The company's sales effort has been boosted by the recent fall in value of the pound against the euro, which is improving the competitive-ness of UK operations and helping BPI regain work lost to European rivals.

BPI has also been helped by increased demand for some products, including the silage stretchwrap used on farms, where the company is having a successful early season.

However, like other manufacturers, BPI has found that the fall in the value of the pound has made imports more expensive.

BPI has been grappling with the effect of increases in the price of oil, from which the polyethylene it uses in its products is derived. While raw material costs have stopped rising in mainland Europe, UK plants have faced further increases because of the weakening of the pound.

The firm has also been hit by increases in energy costs. In a statement prior to yesterday's annual meeting, chairman Cameron McLatchie said BPI was concerned about projected increases in gas and electricity costs in the summer months, when it usually benefits from seasonal reductions.

"We have previously indicated that for many parts of our group, 2008 was expected to be a challenging year and we currently anticipate that, whilst we will have a steadier performance in the second quarter, the result for the first six months will remain somewhat behind the same period for 2007," he said.

Announcing a 15% drop in annual pre-tax profits to £11.5m, in March, BPI warned of a new round of restructuring which would hit the group's 2100 UK staff, a sixth of them in Scotland.

The company has started consultations with 45 staff at a small, unprofitable plant in Buckhurst Hill, Essex, which it intends to close. The work will be transferred to sites in Cowdenbeath, Fife, and Flint in Wales.