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[July 2002]
Cookson Group Trading Update
Cookson Group PLC said on 5 July 2002 that, as anticipated in the update given on 25 April 2002, market conditions and group sales for the second quarter 2002 were in line with those of the latter part of the first quarter. The benefits of the extensive cost cutting programmes initiated last year continued to accrue, resulting in an improvement in the group's profitability in the second quarter.Based on preliminary information, group sales for the second quarter were some 7% higher than for the first quarter of 2002. Sales in the Electronics division were up approximately 7% as the severe global downturn which had affected the electronics industry since the beginning of 2001 had continued to abate.
The Ceramics division's sales were 9% higher in line with stronger US and European steel production volumes. Improved trading conditions in the Precious Metals division resulted in a 4% increase in sales.
As a consequence, group sales for the first half of 2002 were approximately £900 million.
The higher sales in the second quarter are expected by Cookson to result in an improvement in operating profits compared with the first quarter. In addition, operating profits in the first half of 2002 are expected to be higher than in the second half of 2001, primarily due to the incremental benefits of the cost cutting programmes.
The group-wide focus on generating cash from operations continued during the second quarter. Net debt at the end of June 2002 was expected to be broadly in line with the £750 million at the end of 2001 and as such would be considerably lower than originally budgeted at the time the group's medium-term bank facilities were refinanced in December 2001.
The group has £450 million of long-dated loan notes and convertible bonds with maturities ranging from 2004 to 2012. It has also committed medium-term bank facilities of £450 million which have a final maturity date of September 2004 with staged reductions during 2003. At the end of June 2002, over £150 million of the medium-term bank facilities available to the group were undrawn.
Cookson Group's interim results are expected to be released during the week commencing 29 July 2002.
ENDS