Cost cuts help ICI to 31% rise

Cost-cutting and a gradual improvement in world economies helped Imperial Chemical Industries to a 31 per cent increase in underlying pre-tax profits in the first quarter of the year.

Sir Denys Henderson, chairman, said it was a 'solidly based improvement' which showed the benefits of the group's restructuring programme. 'We expect further improvement as the world economies gradually strengthen. There is now sustained growth in North America, one of our most important markets. Continental Europe seems at last to have bottomed out while the UK's gradual recovery continues.'

The group made pounds 103m profit before tax in the first three months, compared with pounds 229m in the previous period. But the 1993 results included pounds 153m profits from Zeneca, the pharmaceuticals and agrochemicals business that was demerged from the group last year, while the current year's result benefited from a pounds 10m profit on the sale of an Australian subsidiary. Excluding these, profits were pounds 93m, compared with pounds 71m last time, while earnings were 6.1p a share, up from 5p.

Sales were pounds 2.14bn, up from the pounds 2.08bn achieved from the ICI businesses in the previous period. Half of that came from volume increases, while exchange differences - largely against the mark - depressed sales by 1 per cent. The remainder of the increase was due to sales to Zeneca, which remains one of ICI's main customers.

The shares reversed their recent strength to close 22p lower at 831p.

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