THE troubled Blackburn-based Scapa group today announced losses of more than £20million and revealed a £26million 'black hole' in its main pension scheme.

The company, a global supplier of technical tapes, was one of East Lancashire's largest employers before it sold its operations in Blackburn and Haslingden in the early 1990s.

In a statement to the Stock Exchange, Scapa declared a loss after tax for the last financial year of £20.3million.

The company said it had written off £12million of the value of an American company it had bought in 2001 and said a factory closure programme had cost a further £5.3million.

Scapa also disclosed that it was now facing legal action in America from more than 22,000 former paper mill workers alleging exposure to asbestos. The company is denying liability and stressed it had won every case that had reached court.

Scapa said its group's defined benefits schemes were showing a deficit of £26.2million at March 31 2003, compared with a figure of £11.7million the previous year.

Chairman Dr Keith Hopkins said the company continued to face difficulties in its world markets.

"Scapa has experienced some extremely tough and uncertain trading conditions," he said. "After an already difficult first half, trading deteriorated in the second six-month period exacerbated by the volatility of economic confidence partly as a result of the conflict in the Middle East.

"Trading conditions show little sign of improvement on either side of the Atlantic."

Turnover had fallen from £194 million to £187million, but the company said it had still made a profit of £4.9million before exceptional costs.

Scapa North America had made a £7million profit, but both its European and Asia operations were in the red.