ICI profits boosted by higher prices

Chemicals and paint group ICI said today that price rises and a business shake-up had helped it lift annual sales and profits.

ICI said the price increases and benefits of its restructuring, as well as strong volume growth, had more than offset rising raw material costs.

The company, which employs more than 35,000 people worldwide, including about 200 in Ireland, cut around 1,400 jobs in 2003 as part of a drive for cost savings worth £70m (€100.7m).

While annual group sales including currency movements fell 4% to £5.6bn (€8.1bn), comparable sales lifted 7%. Pre-tax profits before goodwill and one-off items for the year to December 31 climbed 16% to £397m (€577.4m).

The Dulux paints company has been working to bounce back from a series of disappointments in the past two years after tough economic conditions and problems at key divisions affected its performance.

Today, it said it had ended 2004 with another strong quarter and its restructuring had remained on track.

Chief executive John McAdam said all its major units, including international businesses National Starch, Quest, Uniqema and Paints, had delivered good comparable trading profit growth during the year.

He warned that further price increases would be necessary to offset rising raw material costs.

Mr McAdam added: “If customer demand remains strong, as generally appears to be the case today, we expect 2005 to be another year of progress.”