ICI turns in results at high end of forecasts

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The Independent Online
STRONG volume gains, especially in Britain, continental Europe and the Asia Pacific region, and the benefit of past cost-cutting pushed Imperial Chemical Industries's half-year profits 40 per cent higher to pounds 234m before tax and exceptional items, at the top end of City expectations.

Ronnie Hempel, chief executive, said that volume growth had accelerated from 2 per cent in the first quarter to 9 per cent in the second, but this rate of improvement might not continue.

Sir Denys Henderson, chairman, hailed the first tangible evidence that ICI's customers were pulling out of recession but warned that feedstock prices were rising and the market place remained intensely competitive.

ICI shares rose 4p to 837p. The interim dividend was unchanged at 10.5p. The stockbroker Smith New Court expects pre-tax profits of pounds 500m this year and pounds 740m in 1995 and for dividends to begin increasing this time next year.

Trading profits rose by pounds 94m to pounds 273m, led by strong advances in the materials division, benefiting from inclusion of Du Pont's acrylics business, and industrial chemicals. Demand from polyester fibre producers boosted volume in ICI's PTA and PET resin bottles.

This has prompted ICI to invest dollars 100m in a PET plant at its site in North Carolina. The plant will supply the growing US market for bottles for soft drinks.

The cost-saving programme boosted trading profits by pounds 50m before a severance charge of pounds 20m.