CHEMICALS company Courtaulds Plc said yesterday that profits declined at the halfway stage following a poor performance from its acrylics and viscose operations, but it was guardedly optimistic on the second half.

First half pre tax profits fell to £64 million sterling from £67.8 million. This was at the low end of analysts' expectations.

Courtaulds said there was underlying growth in all its key markets and that the group was now better positioned than it has been for some time. It added that profits in its core businesses had improved in the first half.

"You can assume the momentum of the first half (will continue), with two areas of uncertainty, viscose and a little concern about the strength of sterling," said Mr Gordon Campbell, chief executive.

Last year the company was hit by a sharp fall in profitability in viscose, acrylic and acetate fibres because of high raw material costs, de stocking and depressed consumer spending across Europe.

While acrylics started a recovery late this summer, margins in viscose have remained inadequate despite signs of improvement in its orders, said Courtaulds.