MANAGEMENT at Pharmaceutical company GlaxoSmithKline's (GSK) County Durham base have welcomed a 12 per cent increase in group profits, to £6.2bn, despite plans to axe jobs at the site

A spokesman for the Barnard Castle factory, which is cutting 400 workers from a workforce of 1,500, said: "We are obviously delighted with the announcement regarding profits, and it is testament to the hard work of our staff, but that does not deflect from the fact that we have had to make job cuts.

"Workers at our Barnard Castle plant have obviously been hit by the company's job cuts, and that is very unfortunate, and we will do everything we can to help those facing redundancy."

A task force has been established to help find alternative employment for the employees who are losing their jobs.

It meets once a month, and involves the County Durham Development Company, Teesdale Enterprise Agency, Teesdale District Council and Bishop Auckland Technical College.

The group - the product of a mega-merger between Glaxo Wellcome and Smithkline Beecham - said that while profits rose 12 per cent in the year to December 31, sales rose 11 per cent to £20.5bn.

Its Advair asthma drug, launched in April last year, was one of its biggest successes, generating sales of £850m.

Chief executive Dr Jean-Pierre Garnier said the group was in an exceptionally strong position.

He said: "The robust growth seen from many of our key franchises clearly demonstrates the breadth and strength of GSK's product portfolio.

"New products, propelled by the phenomenal success of Advair, contributed £3.7bn in sales last year and are driving the business strongly forward - GSK is one of the fastest growing pharmaceutical companies in the US market."

Dr Garnier said that the group had seen very strong growth everywhere in the world, particularly in the US, but also in Europe.

Sales of anti-depressant drug Paxil rose 13 per cent to £1.3bn in the US, and posted strong increases in the rest of the world.

Anti-virals including HIV drugs Trizivir and Combivir recorded sales of more than £1.3bn.

Sales of vaccines rose ten per cent to £948m, with Infanrix for diphtheria and tetanus up 36 per cent to £238m.

Its cancer treatment drug Zofran saw sales increase 19 per cent to £601m, while Coreg, for treating heart failure, was up 56 per cent at £251m.

The consumer healthcare division, which includes Aquafresh toothpaste, Horlicks and Lucozade, saw sales rise 24 per cent to £897m.

Glaxo said it had made savings of £750m in 2001, including savings made following the Glaxo Wellcome/SmithKline Beecham merger, as well as from manufacturing restructuring plans. It was on track to make annual savings of £1.8bn by next year.

Shareholders will be paid a total dividend of 39p, which compares with 38p for former Glaxo shareholders and 29.66p for SmithKline investors.

Shares in GlaxoSmithKline closed up 21p at £17.63.