BOC looks East to counter UK gloom to

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The Independent Online
Soaring sales of industrial gases in the United States helped BOC Group to beat City expectations by reporting first- half profits of £194m, before tax and exceptionals - a 12 per cent increase in earnings .

In contrast, conditions in the UK remained flat, with a combination of slack demand and competitive pressures, and the company said it will be looking at other markets, notably South-east Asia, for future growth.

Like-for-like sales in the six months to the end of March were up 7 per cent on the same period last year, at £1.79bn.

Operating profit from the sale of gases in the US soared 48 per cent on the previous year. The company has recently won many new orders to supply US customers and anticipates doubling its gas business there.

Things were not as promising in the UK. Pat Dyer, the deputy chairman and chief executive, said: "The UK economy was not as good as that in the US and we have had several competitors come into the market. This keeps pressure on our ability to raise prices.

"When you are number one, and have a major market share, it tends to attract competitors. But we have done a good job at protecting our market share, and that's what its going to continue to be about in the UK," he added.

BOC had entered into a number of joint ventures with Chinese partners, and now forecast that the day when sales in South-east Asia contributed more to company profits than those in Europe was not too far away.

The company expects a better performance in future from its healthcare business, now that problems with making Suprane, the new anaesthetic, had been resolved. BOC said that its profits from this sector were modest in the period.

Mr Dyer said: "Future growth will come from focusing on sales to key industries around the world. This will allow us to optimise sales to steel or glass companies on the international scene. We want to deal with our customers wherever they choose to go, like Pilkington in Shanghai."

Lucas Herrmann, an analyst with James Capel, said: "We are encouraged by the results. The numbers are slightly better than expected." Mr Herrmann has increased his full year forecast by £10m to £410m.

The shares increased 13p up at 786p, bringing the total increase in the share price to £1 since April. With a price earnings ratio of 14.8, Mr Herrmann said: "The price is up with events. I can't see it going much further."

A second interim dividend of 12.4p is to be paid.