ICI axes 1,400 after fresh slide

CHEMICALS giant ICI is axeing another 1400 jobs in a fresh round of cost-cutting, following a 21% tumble in first-half profits to £150m. The shares climbed 31p to 171 1/4p.

The job cuts, larger than feared, will lead to exceptional costs of up to £178m. But ICI said they would save around £80m by 2005. Together with cuts already announced, total savings will be more than £100m a year by 2005, the group said, equivalent to around 2% of sales.

ICI unveiled 700 job cuts earlier this year, some 300 in Britain. The latest cuts will see a further 300 British jobs go, including 100 at its head office at Manchester Square in London. ICI employs around 5000 in Britain out of a worldwide total of around 36,000.

Chief executive John McAdam said the results were 'disappointing' and warned that the economic outlook remains uncertain. 'Action is therefore required to cut costs,' he said.

But McAdam said the performance had improved over the second quarter, with the paints division, which takes in Dulux, continuing to perform well.

The National Starch business 'improved considerably', delivering profits in line with the comparable quarter last year. Group sales for the half year fell by 5% to £2.9bn.

There was bad news too for shareholders as ICI cut the half-time dividend from 3p to 2.75p. This was in line with the group's policy, said McAdam.