RISING sales and cost savings helped produce an increase of over 15 per cent in pre-tax profits last year to £12.5 million at Coillte, the State owned forestry company. Strong growth in log sales, higher revenues from its non timber business and greater efficiency throughout its operations enabled the company to achieve a "sound financial footing" in 1995, according to Coillte's chief executive, Mr Martin Lowery.

Sales at its timber and non core businesses rose strongly, with income up 18 per cent from £57.6 million to £68 million. Sales of logs and other timber products increased 4.3 per cent to £52.7 million, according to figures issued yesterday.

The proportion of annual income from non timber activities continued to rise, with £15.3 million generated from private planting, nursery products and harvesting sales compared with £12.4 million in 1994.

Over the 12 month period the value of Coillte's assets, including its forestry holdings, increased by £49 million to £869 million. The value of its assets have climbed by more than £329 million since the company was formed in 1989.

Its bottom line performance reflects net restructuring costs of £1.9 million over the 12 month period, incurred as part of its strategy to improve the efficiency of the group's business, according to Mr Lowery.

"1995 was a turning point" for Coillte, he said, with the latest good results allowing the company to enter a new phase of development.

"The good results in 1995 strengthens our position in achieving our long term objective of becoming an Irish based international forestry and forest products company". The group is now keen to invest in overseas markets, Mr Lowery added. This could include buying an international base to grow or distribute its nursery products, he said, while Coillte will also seek to integrate its business into timber processing activities.

In the Republic, Mr Lowery insists there is still a lot of work to be done in expanding the forestry industry. He believes that there is still more than one million hectares of land in the Republic that could be planted.

The outlook for the industry, he said, was very positive, given the increased support from Government and farmers for the future of the development of forestry. However, the market for buying land for afforestation, he said, is "tight and difficult".

Last year Coillte planted 11,734 hectares of forests and produced 2.14 million cubic metres of logs. It also completed a road construction and upgrading programme of 363 kilometres and increased the volume of timber harvested to record levels of 1.02 million cubic metres.

Coillte employs 1,150 staff in the Republic. The group said yesterday that its activities support 12,000 jobs in forestry and related industries, estimating that annual output from the sector amounts to £170 million.