A solid performance from joint-venture interests helped to push IAWS pre-tax profits up by 26 per cent to €34.8 million in the six months to January 31st.

Interim results issued by the food and agribusiness group yesterday show that profits were boosted significantly by both the firm's Tim Horton joint venture in Canada and its 22 per cent holding in Swiss baker Hiestand.

Group operating profits rose by 16 per cent to €40.3 million over the first half, with some €8 million drawn from associates and joint ventures. This compares with a €2.8 million contribution from joint ventures and associates in the first half of 2003, with much of the increase attributable to the Hiestand holding.

Shareholders will receive a first-half dividend of 5.074 cents per share, up 18 per cent on 2003.

IAWS chairman Mr Philip Lynch said the group had been affected by both currency pressures and "more challenging markets" across its businesses.

Mr Lynch said turnover, which rose by 4 per cent to €599.7 million, would have climbed by 8 per cent in constant-currency terms. Equally, operating profits would have risen by 16 per cent if exchange rates had been steady.

IAWS chief executive Mr Owen Killian later said the firm benefited from a "natural" hedging strategy, so it both borrows and makes profits in dollars and sterling.

He said the interim results reflected a "good overall performance" for the company and looked ahead to a "satisfactory" performance for 2004. "The second half of the year has seen a solid start," he said.

A breakdown of the half-year numbers shows that the firm's food operations in the UK and the Republic posted like-for-like sales growth of 6 per cent, despite operating in "more difficult conditions". Mr Killian said consumer spending had weakened in both markets.

Sales in agribusiness and nutrition rose by 11 per cent, although profits declined in marine oil due to currency pressures and in fertilisers due to slower trade.

The firm's interests in Canada and the US combined to post sales growth of 39 per cent higher in constant-currency terms.

Mr Killian said IAWS aimed to bed down its €200 million investment in Tim Horton and its total €150 million outlay on US bread business La Brea during this year.

IAWS shares closed one cent weaker at €9.74 last night, which was partly due to the decision of 17.4 per cent shareholder, the IAWS Co-op, to enter merger talks with Cork firm SWS.