Price hikes and squeezing costs helped consumer giant Unilever post better than expected sales and profits yesterday for the first three months of this year.

Unilever - which owns household brands including Colman's of Norwich, Hellmann's mayonnaise and Persil - said operating profit rose by 39pc to e1.8bn (£1.4bn) on the back of a 7.2pc rise in sales.

As well as strong trading in emerg-ing markets and Russia, Unilever said demand for its products had held up well across most of western Europe, including the UK.

Earlier this month the EDP reported how Unilever was planning to transfer control of 14 of its brands to a new operation in the Nether-lands - prompting speculation that the company was preparing to sell the likes of Bovril, Marmite and Pot Noodle.

Unilever said that management of other brands - including Colman's and PG Tips - would remain in the UK.

Although detailed figures were unavailable last night, a spokesman said the Colman's brand had "got off to a decent start" in 2008 and had contributed to the company's overall growth in the first quarter of the year.

Unilever has about 250 employees at its Carrow Works in Norwich.

Chief executive Patrick Cescau said sales of tea, ice cream, spreads and laundry were particularly strong.

Mr Cescau added: "We continue to invest behind our brands, while taking the necessary pricing action to recover a sharp increase in commodity costs."

But Unilever also said commodity cost increases rose by e400m (£315.2m). As well as price increases, Unilever said it had managed the situation through savings programmes and innovation.

The company announced job cuts in its European operation last year, with more than 300 jobs set to go at three of its UK factories at Burton, Warrington and Port Sunlight on the Wirral during this year.

Before the latest round of job cuts, Unilever employed around 8,000 people in the UK.

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said: "This is an extremely encouraging start to 2008 with sales continuing to outpace expectations, profit margins still improving and management remaining optimistic for the outlook."

Courtesy of EDP