Greencore would increase its pace of making acquisitions, the chief executive of the agribusiness group said yesterday after announcing a 7 per cent rise in pretax profits to £27.1 million (€34.4 million) for the six months to March 26th.

Mr David Dilger pointed to the growing performance of the group's food sector, which provided £201 million (€255.6 million) of the group's turnover of £337 million (€428 million), a 27 per cent increase on the same period in 1998.

Headline earnings per share (eps) were up by 8 per cent to 12p (15.2 cents).

He said cash flow from the sugar and agribusiness sections would be used to invest in areas demonstrating "fast growth capabilities". The group had an exceptional cost of £1.7 million (€2.2 million) relating to the disposal by Imperial Sugar, the US company in which it has a 27 per cent stake, of its minority interest in a US sugar beet refinery.

That charge means Greencore had an eps of 11.4p (14.5 cents), a 2.7 per cent increase on the same period last year.

Imperial Sugar had a disappointing second quarter, Mr Dilger said, due to unusually warm weather affecting the US sugar beet harvest. Industrial demand for sugar continued to outpace table top sugar sales in line with the experience of all retailers. Greencore produced 219,000 tonnes of sugar, 8,800 tonnes over its quota, which contributed to £70.25 million (€89.2 million) of the sales and £13.9 million (€17.6 million), or 46 per cent, of the operating profits of £30.1 million (€38.2 million).

Greencore's chief financial officer, Mr Kevin O'Sullivan, said the green pound changes had cost the company more than £3.15 million (€4 million) on the bottom line but it had been removed as a factor since its final price reduction on January 1st. He said the group had "substantial capacity" to make a large acquisition.

Greencore's food division contributed 43 per cent or €16.4 million (£12.9 million) of the operating profit, a three percentage point increase on its contribution to 1998's operating profit.

Despite the world malting markets being "poor", Mr Dilger said savings had been made on the merger of Greencore's malting business with the British company, Pauls Malt, which was acquired last year. Manning levels had been "all but halved" to under 200. "The Pauls' synergies and savings have come through as planned, and better than planned," he said.

The malting market would not Malting barley was being purchased in France and Belgium as "a medium-term target" because of high costs in Britain.

"We will do what it takes to ensure that nobody feels that UK malsters are too dependent on UK malting barley in order to make malt," he said.

Commenting on the group's other British subsidiary, Paramount Foods - also acquired last year - he said that pizza demand in particular was growing and was expected to increase by 10 per cent over the next three years.

The cost reduction programme in its fertiliser business would show benefits in the next six months.

Mr Dilger added that recent small acquisitions were being completed.