CEMENT group Blue Circle Industries, which fought off a hostile bid from France's Lafarge earlier this year, has posted an upbeat trading statement and said planned cost savings would come in above expectations.

Chief executive Rick Haythornthwaite said the group was expected to beat its savings target of £29m.

Blue Circle had set the target as part of its defence against the Lafarge bid.

Mr Haythornthwaite added the group would, by the year end, complete the return of the final £400m of capital to shareholders, which is planned to be paid as a special dividend.

The payback to shareholders had also been part of the group's defence against the hostile bid, and was half of a total £800m payout.

Mr Haythornthwaite added the group was making progress with its disposal plan, while the overall outlook for Blue Circle in terms of performance and growth was ''encouraging''.

Commenting on trading conditions around the world, Mr Haythornthwaite said prices were up in the Philippines, UK and Malaysia.

UK volume growth had been in line with expectations.

Commenting on the effect the weather has had on operations in the UK, he said: "Our team has refused to put weather forward as an excuse, but it does make life harder."

Regarding recent rumours that Blue Circle could face a renewed bid from Lafarge, Mr Haythornthwaite said he could not comment on speculation but added: "We are focusing on things we can control, like our performance".

He said independence was the group's "preferred option" but if Lafarge came back with a high offer, the group would have a duty to consider it.

lLast week Blue Circle revealed that its review of operations at its Eastgate plant in Weardale would lead to the loss of 20 jobs. The company has a workforce of 180 at the site and the redundancies will be made over the next two years.

The changes at Weardale follow the three-month review of production instigated after the group narrowly averted the bid from Lafarge.

The scale of production at the County Durham factory remains under review.