PLASTICS and packaging group Bunzl, which employs 300 people in Kidlington and Banbury, hailed a victory in its battle against the strong pound when it revealed a modest profit increase.

The group's problems include a fall in the price of plastic products. Moss Plastic Parts in Kidlington is part of Bunzl Plastics, which has its head office in Banbury.

However, Bunzl says an 18-month reshaping programme has sharpened the group's performance overall.

Sales and the operating profit from continuing operations grew, mainly due to the successful integration of acquisitions, including American Filtrona Corporation and Grocery Supply Systems, which were completed last autumn.

In the six months to June 30 the group made £62.8m before tax on £953.5m sales - this compares with £62.4m on £846.2m over the same period last year.

Over the six months Bunzl spent some £34m on acquisitions, while disposals raised £15m.

Chairman Anthony Habgood said: "This is an excellent set of results reflecting the fundamental strengthening of Bunzl's businesses and achieved despite a strong pound and severe price deflation. "The continuing underlying volume growth of our business and the successful purchase and integration of acquisitions enable us to continue to look to the future with confidence."

In a statement the group noted its business had been fundamentally strengthened over the past 18 months by continued organic growth together with the acquisitions and disposals.

"This is demonstrated by the growth of sales and profits in the period, which was achieved against the background of a strong pound and greater-than-expected price deflation of both plastic and paper products," it said.

"While the turbulence in the currency markets makes prediction more than usually difficult, the translation effects of the rise of sterling appear, at today's exchange rates, to be largely behind us.

"However it is expected that prices of plastic and paper products will persist at low levels in both the United States and Europe.

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