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Unilever shares were up in early trading this morning after the food and household goods giant reported a surprise increase in first-quarter sales.

The Anglo-Dutch company saw the price of its stock rise in both London and Amsterdam after it recorded a stronger-than-expected growth of 5.7 per cent in underlying sales.

Meanwhile, net profit for the three months ending March 31st rose to €1.1 billion (£0.75 billion), up from €1.06 billion (£0.72 billion) in the corresponding period a year earlier.

In Europe, where Unilever conducts almost half of its trade, sales were up 3.6 per cent, aided by a strong growth in ice cream sales and personal care products which saw a rise of 8.4 per cent.

New product launches, such as the Dove pro-age range for the over-50s, helped the company's UK business return to growth. Stronger sales of personal and household care products helped to cement the improved performance, along with rising sales of tea and food dressings.

Unilever, which is also behind the Knorr soup and Sunsilk shampoo brands, said that productivity had also "improved considerably" as a result of savings programmes which offset a "sharp" rise in commodity costs, particularly within the group's food business.

Commenting on the results, Unilever group chief executive Patrick Cescau said: "This performance builds on the progress made in 2006 and is further evidence of the breadth and depth of our change programme.

"Our growth strategy is focussing resources behind clear priorities and delivering bigger, better innovation, faster roll-outs and more effective marketing mixes," he added in a statement.

However, Mr Cescau also warned that Unilever expected to face a "significant headwind" from rising commodity costs in the agricultural sector and indicated that the company might be forced to raise prices as a result.

Nonetheless, he said the group remained "confident" of achieving its predicted organic growth of between three and five per cent in 2007 as a result of efficiency gains.