COSMETICS company L'Oral said that its UK division had performed strongly last year, with operating profits across the group up by 16.3 per cent.

In the UK last year, sales increased by seven per cent to £607m, shareholders at the annual meeting in Paris were told.

L'Oral saw improved profits across the world. However, earnings growth slowed and the stock price slumped. The company announced that Jean-Paul Agon, 48, would replace Lindsey Owen-Jones, who has been chief executive officer for 20 years. Mr Owen-Jones will stay on as chairman. Mr Owen-Jones said: "In 2004, thanks to the innovations of its laboatories and the success of its brands, L'Oral once again increased its sales, by 6.8 per cent, excluding the impact of currency fluctuations, a rate considerably higher than the growth of the cosmetics market.

"Our strategy of retail channel diversification and strong presence in new fast-growing markets has led to another year of strong growth. This expansion, combined with strict cost control, has enabled us once again to significantly improve our profitability."