BUNZL, the paper and plastics group, overcame the impact of the strong pound and falling prices to achieve interim profits ahead of City predictions.
Pre-tax profit rose 12% to #62.4m in the six months to June 30, compared with #55.8m in the first half of 1996.
The headline figure included a #6.1m profit on the sale of discontinued businesses.
The group said its 3% rise in operating profit to #57.2m from #55.7m showed its ability to deal with unfavourable currency movements.
The first half of the year saw major changes for Bunzl, which made acquisitions totalling #38m and sold its fine paper businesses in Germany and Italy for #58m.
Chairman Anthony Hapgood said: ''The good underlying organic growth of the group's principal businesses, supplemented by further acquisition activity, more than offset the effects of adverse currency movements and price deflation. Two further major acquisitions in core areas, which have recently been announced, will give us additional strength and significantly increase the profit potential of the group.''
Shareholders will receive an interim dividend of 2.3p up from 2.2p, against earnings per share of 9.0p (8.1p in 1996).
Finance director John Bason said the group was focusing on the underlying profit as it showed Bunzl was on the right track.
He said the second-half's figures would be helped by the strength of the dollar, which is trading at 1.61 to the pound against 1.62 last year.
He added that the group's corporate activity might not have come to an end, as it still had resources for acquisitions and was constantly reviewing its operations.
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