Imperial Chemical Industries (ICI)

Latin America more than offset lower sales in North America. Although gross margin percentages were below last year, reflecting higher raw material costs, with lower costs below gross margin, trading profit was substantially ahead.

Flavour sales were 1% higher than last year, with good growth in Asia and Latin America offsetting lower sales in Europe and North America, where sales prices were lower due to declining vanilla costs. Improved product mix in the second quarter contributed to gross margin percentages being ahead of last year, and trading profit was significantly ahead of the first half of 2004.

Uniqema
Sales for the first half were 3% ahead of 2004 on a comparable basis. Good growth in Asia and Americas was partially offset by weaker trading conditions in Europe. Glycerine prices were lower than 2004, and with higher raw material costs, gross margin percentages were below last year. However, costs below gross margin continued to benefit from the restructuring programme and good overall cost control, and consequently trading profit was 28% ahead of last year on a comparable basis.

Including the effects from foreign exchange translation, sales were 3% ahead of last year and trading profit was 32% higher than 2004, both on an as reported basis.

Paints
Paints delivered comparable sales growth of 6% in the first half. Sales growth was particularly strong in Asia, whilst in Europe sales were adversely affected by generally weak retail markets. Sales prices were increased in response to higher raw material costs, but overall gross margin percentages were lower than last year. Costs below gross margin were slightly lower than in the first half of 2004. Trading profit was 4% higher on both a comparable and as reported basis.

As reported sales were 5% above 2004, with the impact of business divestments accounting for the difference from the comparable performance.