US broker Paine Webber has recommended Jefferson Smurfit Group shares as a buy following its stronger-than-expected first-half results. The continued buy rating reflected the upturn in the group's markets and its moves to boost returns, according to analyst Mr Richard Schneider.

The pre-tax profit, at £61.2 million, was ahead of his forecast of £52.6 million expectations because of greater-than-expected cost reduction, lower interest expense and the small non-recurring gain from associate company, Munksjo, he said.

Raising his earnings per share forecast for the full year from 7.9p to 8.3p, Mr Schneider said he expected "some restructuring" of the group's British operations. He expected the group to consolidate its British operations to make them more competitive and forecast that "a refocusing" of the group's 46.5 per cent associate in the US, Jefferson Smurfit Corporation, would be announced in October.

Mr Schneider has left unchanged his 1998 earnings forecast of 15.8p per share.