Efficiency drive ensures profit rises despite "challenging" markets.

Pilkington has increased interim pre-tax profit by 15% to £82m for the six months to September 30 despite a sluggish European economy and a strong pound.

Sales in its Building Products division fell 5% to £599m but Pilkington says that a focus on cost reductions and efficiency had improved profits.

The group said that sales in Europe were still affected by a sluggish economy, while competitive pressures in the UK had reduced profits in its home market. It said that float glass profit across Europe had stabilised.

Chairman Sir Nigel Rudd, said: “The Group's results in the first six months of the year confirm the expectations set out in our previous statements, with robust profits achieved, despite rising costs and the impact of the strong pound.”

“Conditions in most of our markets remain challenging, although the demand outlook is becoming somewhat more positive.”

The company said from this month the recent surge in energy costs had forced it to introduce an energy surcharge on deliveries of glass to customers in Europe.

Group turnover slipped to £1,321 from £1,395 in the same period last year.