LOGISTICS group Exel reported a 42 per cent rise in UK trading profits, despite problems facing key customers in the beer and retail sectors.

Exel, which is based in Bracknell and employs more than 100 staff on Teesside, said new business with retailers such as Boots, Morrisons and Sainsbury's showed it was still winning retail contracts.

In addition, the company continued to be encouraged by the growing volumes of consumer products entering the UK from low-cost countries such as China, Morocco and Turkey.

The consumer and retail sectors account for 60 per cent of its European contract logistics business after Exel paid £328m for rival Tibbett and Britten last year.

The acquisition boosted trading profits in the UK and Ireland, which totalled £16.5m. Domestic revenues rose 58 per cent to £1.09bn even though customers did not ask Exel to deliver as much beer to their restaurants and pubs as the company expected.

The snapshot of UK trading was provided alongside the group's results for the six months to June 30, which showed revenues up 46 per cent at £3.64bn, after ignoring the impact of currency swings, and underlying profits ahead 42 per cent at £81.8m.

Chief executive John Allan said: "In the second half, we will continue to focus on operational performance and organic growth, primarily through expanding our relationships with customers.

"Based on our first half performance, we remain confident of delivering another year of strong growth in our business."

The company employs more than 100,000 people and has had a presence in the North-East for 60 years in the chemical industry and manufacturing sector. It announced last week that it had consolidated its Teesside businesses at one site in Billingham.