PACKAGING group British Polythene Industries (BPI) has cut £3m from its profits goals after a quieter than expected end to the year.

The Scottish group, which owns agricultural packaging business Visqueen employing 350 staff in Stockton, said it had also been hit by the collapse of key agricultural customer Irish Fertiliser Industries.

A liquidator has been appointed to the Irish business. BPI said it would suffer a £700,000 hit from outstanding debt and lost sales.

BPI makes polythene sacks and packaging materials for a range of sectors. It warned three months ago its second-half showing may not match the first.

Sales of stretchwrap and refuse sacks would be up for the year while volumes of packaging film products would be down.

It added: "The operating profit for the year will be in the region of £3m below our previous expectations."

Analysts had been forecasting underlying profits of about £16m for the year, after half-year profits fell seven per cent to £7.8m.

BPI has been restructuring after fighting off a hostile takeover bid from rival Macfarlane two years ago. Last month it sold packaging services branches in Glasgow and Newcastle and write-offs linked to the move will come to £600,000.

A further £400,000 charge will come from losses on the sale of six non-core properties the group expects to complete soon.