UPDATE 2-Croda gets record Q3 as cost cutting takes effect

* Pretax profit increases 31 pct to 32 mln stg

* Benefits from cost cutting now that destocking has ended

* Sees stronger pretax profit increase in Q4

* Shares up 5 pct

(Adds finance director comments, share price)

By Ben Deighton

LONDON, Oct 29 (Reuters) - Britain's Croda (CRDA.L) reported record third-quarter pretax profit as it starts to reap the benefits of cost cutting now that customers have finished running down their stockpiles because of the recession.

"We've done a lot of work ourselves it was very frustrating to see it not appearing on the bottom line, we still weren't seeing the sort of results we were expecting, and now this quarter we're finally starting to see it coming through," Group Finance Director Sean Christie told Reuters on Thursday.

He said the company, which makes ingredients for cosmetics and personal care products, would see pretax profit in the fourth quarter increasing by more than it did in the third quarter.

This is because the recession started to kick in at the end of last year, meaning the company has weaker comparatives while at the same time reaping the benefits of cutting down the number of factories and getting rid of third party distributors.

Croda said earlier that pretax profit rose 31 percent to 32 million pounds ($52 million), on sales from continuing operations up 1 percent to 238 million pounds.

Shares in the company, which have more than doubled since December last year, were up 5 percent to 733 pence by 0905 GMT, near the all-time high of 776 pence they reached two weeks ago. ($1=.6107 POUND) (Editing by Kate Holton; editing by Simon Jessop)