Sterling's weakness boosts ICI earnings to pounds 233m

IMPERIAL Chemical Industries yesterday kicked off its demerger marketing campaign with a 10 per cent increase in first-quarter pre-tax profits to pounds 233m, better than City forecasts.

The results, the last that will be produced for the group as a whole, reflect the benefits of sterling's weakness, which added pounds 50m to profits. 'Self-help' from the restructuring programme begun at the end of 1990 boosted profits by pounds 100m. The shares gained 31p to pounds 12.78.

Sir Denys Henderson, chairman, said: 'While there are signs of economic recovery in some markets, these have not yet led to an improvement in volume and pressure on prices in general remain.'

The results are in contrast to its German rival, BASF, which reported a 49.7 per cent fall in profits to DM238m (pounds 96m).

Both Zeneca, the drugs and agrochemicals business that is to be floated off in June, and the remaining chemicals businesses produced improved results. But new ICI achieved trading profit of just pounds 75m - up from pounds 73m - on turnover 7.2 per cent ahead at pounds 2.3bn.

Zeneca's trading profits rose pounds 24m to pounds 204m. The group's four new drugs, including Zestril and Zoladex, enjoyed 33 per cent volume growth, but Tenormin, which lost US patent protection in 1991, dropped by a fifth. Agrochemical profits slipped 27 per cent as volumes fell after Common Agricultural Policy reforms.

Industrial chemicals made pounds 25m compared with pounds 17m in 1992.