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[August 2000]
Strong half-year performance by Cookson's Ceramic Division
For the six months ended 30 June 2000, the Ceramics Division of Cookson Group registered sales up 82% to 372 million and operating profit up 86% to 34.3 million. The group's interim statement continued:
"Sales and operating profits of the Ceramics division increased substantially, by 82% and 86% respectively, due largely to the impact of acquisitions, most notably that of Premier Refractories which was completed in August 1999. Excluding the contribution from acquisitions and the effect of currency, sales and operating increased organically by 9% and 13% respectively. Return on sales and on investment increased marginally, with further improvements held back by profit declines in the division's UK activities and in the Glass sector.
"During the first half the Iron and Steel sector - which contributes two-thirds of the division's sales - benefitted from a recovery in global steel production, which rose by some 10% over the same period last year. This increase in steel output resulted in similar sales volume growth for the division's refractory products and, in some territories, an easing of price pressures. The UK activities, which constitute some 17% of the division's total sales, experienced difficult trading conditions as steel production in the UK was lower than the depressed levels of the first half of 1999. This was due mainly to the strength of sterling and resulted in a marked reduction in its own and its customers' export sales.
"In the Glass sector, profits were lower than last year as customers delayed the commissioning of furnace-lining projects; this situation is likely to improve next year. The Foundry and Industrial Products sector, however, experienced improved sales and profits, mainly in the USA and Continental Europe, with the former Premier Refractories businesses being integrated smoothly and making good profit contributions in the first half.
"Premier Refractories delivered results which were in line with expectations, other than in the UK, and the extensive integration programme continues to proceed as planned. Benefits have begun to be realised from purchasing, sales force and overhead synergies associated with the integration. Savings of 13 million for the current year are still expected to be achieved, with some 6 million having been achieved in the first half. When the manufacturing site integration programme is complete in 2001, annual savings of some 30 million will begin to accrue from the integration programme.
"Global steel production in the second half is expected to be marginally higher than that of the first half and, with the benefits of the Premier Refractories integration programme beginning to show, the outlook for the division in the second half is for a gradual improvement in profitability."
The overall interim results for Cookson Group PLC showed group sales up 62% over the same period in 1999 to 1136 million, operating profit up 90% to 109.7 million and pre-tax profits up 43% to stand at 92 million.
ENDS