Sterling's slide supports BOC

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The Independent Online
FIRST-QUARTER profits at BOC, the industrial gases and healthcare group, received a boost from sterling's weakness against the dollar and yen since last September. Three quarters of sales are made overseas.

Profits for the three months to December rose 12 per cent from pounds 80.1m to pounds 90.8m. Stripping out currency gains, the improvement was 6 per cent. Turnover was 9 per cent higher at pounds 777m.

Pat Rich, the chairman, warned against reading too much into the profits improvement. 'There are few signs of better trading at this stage. In some parts of the world, conditions deteriorated further in the first quarter'.

All the improvement in profits came from healthcare, based mainly in the US, which benefited from a more favourable translation of dollar profits and the disposal last August of Glasrock, the loss-making respiratory treatment business. Operating profits from the division jumped from pounds 22.9m to pounds 32.5m.

Attention is now focused on how quickly Forane, an anaesthetic gas with sales of over pounds 200m, feels the effect of the loss two weeks ago of its patent protection in the US. Suprane, its replacement, is already on sale at a similar price to Forane but analysts warn that it is too early to tell how quickly a cheaper generic rival from Abbott will take market share from BOC.

Profits from gases, which tend to match economic growth, were flat at pounds 73.8m (pounds 72.7m). Vacuum pumps, which depend on the health of the semiconductor industry, slipped from pounds 3.2m to pounds 2.2m despite higher sales.

Charles Lambert, an analyst at Smith New Court, described the figures as 'a strong and encouraging start to the year'. He is leaving unchanged his pre-tax profits forecast for the year to September of pounds 380m, an 11 per cent improvement on last year's pounds 341.9m. The shares rose 8p to 747p.

As usual there is no dividend at this stage. The company indicated at its full-year figures announcement in November that it would pay a 23.2p dividend this year.