Dulux owner reports ‘record performance’

Dulux paint-owner AkzoNobel has reported a "record performance" for its first quarter as it continues to resist a hostile takeover attempt by a US rival.

Earnings before income tax climbed 13% year-on-year to €376m, while sales were up 7% at €3.7bn.

The Dutch firm also announced plans to spin off its chemicals unit and return most of the proceeds to shareholders.

US paint maker PPG has offered to pay more than $24bn for the firm.

In an open letter on Monday, it urged Akzo's board to enter talks, saying they had given insufficient consideration to its proposal, which is favoured by some AkzoNobel shareholders.

It said Akzo's plan to sell its chemicals arm and remain independent was riskier and would create less value.

But yesterday, AkzoNobel said its plan to split itself into two units – one focused on paints and the other on specialty chemicals – would boost growth.

It said the separation, which would also achieve €50m of cost savings, would be completed within 12 months.

AkzoNobel boss Ton Buechner said: "Now is the right time to create two focused, high-performing businesses.

"This strategy will create substantial value for shareholders, with significantly less risks and uncertainties compared to alternatives."

The firm said its earnings before income tax in 2017 were expected to be about €100m higher than in 2016.

It also said its research and development efforts would be strengthened by its new innovation hub at Felling in the UK.