PACKAGING company British Polythene Industries (BPI) has reported a recovery in its performance after interim results showed a fall in profits.

The company, which employs about 350 people in Stockton, said that a reduction in raw material costs had seen its fortunes improve, and that margins had recovered to acceptable levels.

In September, BPI saw half-year profits fall from £10.1m in the same period last year to £9.2m this year. Although sales increased from £226m to £230m, margins were hit by high costs.

However, in a trading update yesterday, the company revealed that while conditions remained challenging, the outlook for the full year had improved.

In a statement, BPI said: "We can confirm that while our second-half performance will be somewhat below that for 2005, it will be in line with current expectations."