The Lego Group (Billund / Denmark; www.lego.com) beat its profits and sales forecasts for the first six months of the year, thanks to strong demand for its classic lines and higher sales to the American market. Responding to the need for increased capacity to meet higher demand, the group said it is delaying the further outsourcing of production.

Pre-tax profits rose 3% to DKK 173m (around EUR 23m) for January-June 2007, aided by the postponement of certain costs. At the beginning of the year the Danish toy manufacturer was forecasting a substantial decline in profits because of heavy investment in its business platform, including IT (information technology), production and innovation. Sales rose 5% to DKK 2.97bn, despite earlier forecasts that sales would fall in 2007. The group now expects full year sales to match the 2006 level of DKK 7.8bn. The toy maker said it is well advanced with the outsourcing of its production, but in response to rising demand it is postponing the further relocation of moulding activities scheduled to commence in late 2007 by 12-15 months. As a result, there will be no transition-related job cuts this year.

The global toy market increased by about 1% during the first half of 2007, the Lego Group reported.