Tullis Russells cost-cutting programme is paying off despite continuing tough trading conditions.

The Glenrothes-based firm has reported interim pre-tax profits of 3.2m to 30 September, compared to a first-half loss of 261,000 last year.

This years figure included an exceptional gain of 1.2m from asset disposals.

Tullis Russell group chief executive Fred Bowden said: "Given the difficulties experienced in our industry over the last 18 months, as evidenced by the closure of a number of UK paper mills, it is critical that we remain disciplined and preserve our profit margins."

Last year the firm made nearly 100 staff redundant, closed an old papermaking machine and reduced its distribution costs.

And earlier this year Tullis Russell posted its first ever pre-tax loss of 3.8m on sales of 109.4m for the year to 31 March (PrintWeek, 22 June).

Bowden said the market remained "extremely difficult", but said the group was cautiously optimistic despite continuing currency pressures, increasing energy and environmental costs, and rising pulp prices.

Story by John Davies