British Polythene Industries shares jumped by five per cent as the group reported a higher than anticipated gain on a disposal in China and stronger than expected trading in the first quarter of the year.

BPI said it had completed the sale of its Chinese subsidiary BPI China to a subsidiary of Amcor, the Australian-based packaging group, first announced in January.

It said the gain on the disposal in this year’s accounts was likely to be £5million, a 25 per cent uplift on the original estimate.

The Greenock-based group said the total proceeds were estimated at £9.7m and an initial payment of £6.4m had been received.

The balance will be paid in instalments following the agreement of closing working capital of around £2m, and of certain post-completion arrangements. The proceeds will be used to reduce borrowings.

BPI added: “Trading performance in the first quarter has been strong and ahead of management’s expectations, having benefited, in particular, from lower energy costs and favourable currency translation effects.”

Two months ago BPI reported a four per cent rise in pre-tax profit to £23.1m last year despite a six per cent fall in revenues to £468m and record highs in the cost of its key raw material polymer. Chief executive John Langlands said the company had achieved capital expenditure of £18m and a £17m injection into the pension scheme whilst still offering shareholders a 12.5per cent dividend increase.

BPI shares jumped eight per cent in early trade to 735p and settled up 32p at 712p.