2000 Preliminary - Amendment

Morgan Crucible Co PLC 13 March 2001 The issuer has advised that this announcement replaces the '2000 Preliminary Announcement' released through the RNS system under RNS No. 3418A at 7 am on 13 March 2001. Line three, Underlying Pre-Tax Profit for 2000, should have read £95.1m and not £5.1m. The full amended text appears as follows:- 13 March 2001 THE MORGAN CRUCIBLE COMPANY PLC PRELIMINARY ANNOUNCEMENT 2000 'MORGAN GAINS CLEAR BENEFITS FROM RESTRUCTURING AND STRONGER FOCUS ON GROWTH MARKETS' 2000 1999 % Growth Group Turnover £m 1051.1 862.4 +21.9% Underlying Operating Profit * £m 111.3 94.6 +17.7% Underlying Pre-Tax Profit * £m 95.1 81.1 +17.3% Underlying EPS * pence 27.5 23.2 +18.5% *Before goodwill amortisation of £5.8 million (1999 : £2.0 million) and operating exceptionals of £6.9 million (1999: £17.5 million). * Underlying Pre-Tax Profit* increases by 17.3% to £95.1 million (1999 : £81.1 million). * Substantial capacity added to our magnetics business supporting organic sales growth in this business of 23.4% over last year. * Overall organic sales growth of 4.3% in the Group's other core businesses. * More than 50% of Group Turnover achieved by businesses which grew organically by more than 5%. * Borrowings reduced by £12.3 million since the end of 1999 despite a substantial increase in gross capital expenditure to £70.9 million (1999 : £40.0 million). Commenting on the results, Ian Norris, Group Chief Executive, said: 'After the major business restructuring and disposal programme of the last two years, Morgan has emerged in strong shape to face the future. More than 50% of Group turnover now comes from businesses which grew organically at more than 5% last year and our strategic entry into the magnetics market in 1999 with the acquisition of Vacuumschmelze has been particularly successful. The balance between growth and mature businesses within our portfolio has clearly improved and assuming no significant worsening in the current rate of slowdown across a number of sectors in the United States, we shall demonstrate continued progress in 2001.' Organic growth in sales, as referred to in this statement, is calculated after adjusting for movements in foreign exchange rates as well as the impact of acquisitions and disposals. THE MORGAN CRUCIBLE COMPANY plc PRELIMINARY STATEMENT 2000 Strategic Progress Morgan's portfolio of businesses has undergone substantial change in the last two years with the disposal of a number that were outside our core competencies. In 1999, Morgan also extended its advanced materials skills base by the strategic entry into the magnetics market with the acquisition of a world leading magnetics business, Vacuumschmelze GmbH ('VAC'), based in Germany and the smaller Crumax Magnetics Inc. in the USA. These have been merged to form a technically driven organisation providing high-performance magnetics solutions. The Group's portfolio now provides a strong base on which to build its future. Global management structures are in place across all our operations. The benefits have been steadily emerging with good organic growth across a number of our businesses. The refocusing of Morgan over the last three years has positioned far more of our sales into markets capable of strong and sustainable growth. More than 50% of Group turnover now comes from operations which grew organically at more than 5% last year. An exciting portfolio of new products based on our advanced material technologies provides the pipeline to support continued growth. Our fuel cell development team has been further strengthened and is developing new design capability and manufacturing processes which are expected to contribute greatly to a dramatic cost reduction for bi-polar plates. Our technical ceramics business continues in partnership with one of the world's leading data storage manufacturers to provide a piezo-electric solution to enable a substantial increase in the data storage capacity of disk-drive devices. We continue to develop high temperature super-conducting materials which should provide the future solution to transporting high volumes of electrical power across great distances. Continued emphasis on improving profitability and cashflow from our more mature operations will satisfy demands on our higher growth businesses for capital. The shift in the composition of the Group's portfolio provides us with new opportunities. Gross capital expenditure this year at £70.9 million (1999 : £40.0 million) was at record levels with £25.0 million invested to support growth in our magnetics business. Capital expenditure was 1.6 times depreciation for the year with the majority of the investment funding our high growth opportunities. Carbon Division The Carbon Division comprises our Electrical Carbon, Engineered Carbon and Magnetics businesses. Total sales of the division were £563.8 million (1999 : £322.2 million), an increase of £241.6 million or 75.0%. Encouraging organic growth in sales was achieved across all businesses although £200.7 million of the total increase arises as a result of having a full 12 months trading of VAC compared to 1 month in 1999. Underlying operating profit was £66.5 million (1999 : £48.2 million) with underlying operating margins at 11.8 % (1999 : 15.0%). Some decline in underlying margins was experienced in both the Electrical and Engineered Carbon businesses. The principal factor behind the overall decline in underlying operating margins for the division has, however, been the contribution from the Magnetics business where operating margins were below the divisional average, although ahead of expectations. Electrical Carbon Turnover within Electrical Carbon increased to £197.9 million (1999 : £189.1 million) and included organic growth of 2.2%. Underlying operating profit fell, however, to £26.3 million (1999 : £30.3 million) yielding an underlying operating margin of 13.3% (1999 :16.0%). The Group is taking steps to address the decline in margin by increasing the proportion of product sourced from lower cost plants in China and India. Performance was also adversely impacted in the industrial and rail traction segment where the much reported disruption to the UK rail network at the end of the year contributed to a deferral of orders for replacement traction brushes. The automotive and consumer markets performed strongly until close to the year-end when the slow down in the United States, particularly in the automotive market, had a notable impact. Plans were implemented at the beginning of 2001 to substantially reduce costs to compensate for the anticipated market weakness. Nevertheless, positive organic growth was still achieved with only a slight decline in overall operating margins. Our automotive and consumer business has been working progressively towards reinventing itself as an integrated power transfer solutions provider rather than a simple component manufacturer. A number of successes were recorded during the year with orders received for the supply of fully integrated assemblies including brush, commutator and bonded magnets. This represents a major growth opportunity for the long term in an area where no competitor can offer customers the breadth of technologies which Morgan can provide. Engineered Carbon Engineered Carbon achieved turnover of £124.9 million (1999 : £108.8 million) with organic growth of 6.2%. Underlying operating profits grew slightly to £16.6 million (1999 : £16.4 million) with underlying operating margin of 13.3% (1999 : 15.1%). Our mechanical carbon business, providing a range of tribological solutions, showed encouraging organic growth of more than 6% although at some expense to operating margins. These margins will recover this year. Our specialty graphite sales grew strongly particularly in the USA benefiting from exposure to the semiconductor equipment manufacturing market. An investment project was initiated to bring our European and Asian specialty graphite plants up to the same level of technical excellence as our United States facilities. This will enable us to compete effectively in the expanding global market for specialty graphite materials. The Morgan fuel cell task force, which draws together all of Morgan's technologies, has produced promising developments in low cost bipolar plate materials and a rapid precision manufacturing process protected by a number of patent filings. The Group's precision coatings business, which provides a full range of solutions from solid film lubricants to diamond coatings, had a successful year growing both sales and profits. The business has the potential to grow globally. A plant is currently being established in continental Europe, and plans are also being developed for similar investment in Asia. Shortly after the year-end Diamonex Inc. was acquired in the United States for a total consideration of US$13.8 million. With this acquisition, the Group has acquired technology protected by over 40 patents for commercial diamond and diamond-like coatings which provide properties of exceptional resistance to wear as well as the ability to rapidly dissipate heat. These properties provide superior wear resistant coatings solutions for products such as diesel fuel injectors, storage discs in hard disc drives and heat dissipation devices for the semiconductor and power electronic industries. Magnetics In its first full year as part of Morgan, the performance of our Magnetics business has been strong with turnover of £241.0 million (1999 : £24.3 million). Organic growth for the business overall was 23.4%. The two acquisitions made last year, Crumax Magnetics Inc. in the United States and the much larger VAC headquartered in Hanau, Germany, are now operating successfully under a common global team. Crumax provides a stronger North American presence as well as the technology to use magnetic and resin bonded materials within the substantially broader technical base of VAC. Certain of Crumax's range of products have been exited during the year which has had the effect of understating the strong underlying growth experienced by our magnetics business overall. Looking at the results of VAC alone, record sales were achieved with an underlying sales growth of 27.9% and an operating margin of 11.8%. A key driver of this performance was the growth achieved by our permanent magnets sold into the growing data storage market. This has been strongly supported by the sale of fully integrated assemblies incorporating magnetic cores into the specialist niche sectors of telecommunications markets and the provision of soft magnetic materials to the retail security sensor market. Synergies with the rest of Morgan's businesses are also being actively pursued. Our Magnetics and electrical carbon teams, working together, have started to make exciting breakthroughs into the market for fully integrated power transfer solutions for electric motors. Underlying operating profits were £23.6 million (1999 : £1.5 million) with this year having received the benefit of a full years trading. At 9.8% underlying operating margins, though below the average for the Group, were ahead of our expectations for the year. Ceramics Division The Ceramics Division comprises our Technical Ceramics and Insulating Ceramics businesses. Total sales of the division were £457.0 million (1999 : £428.1 million), an increase of 6.8% with organic sales growth achieved by each of our businesses. Underlying operating profits rose by 5.9% to £42.9 million (1999 : £40.5 million) giving an underlying operating margin of 9.4% (1999 : 9.5%) for the division as a whole. Technical Ceramics Turnover within Technical Ceramics increased by £20.5 million to £139.8 million (1999 : £119.3 million), with organic growth of 14.8%. Underlying operating profits also advanced strongly rising by 51.5% to £15.0 million (1999 : £9.9 million) with underlying operating margin improving to 10.7% (1999 : 8.3%). A major restructuring programme was carried out in our North American advanced ceramics business during 1999 with all of our plant based sales teams merged into one focused organisation. Advanced ceramics achieved organic sales growth in the year of 13.6% although within this, growth in North American sales was 16.9%. Particular market focus has been directed towards the fast growing sectors of medical equipment, telecommunications and semiconductor equipment manufacture. The European businesses within advanced ceramics were refocused towards the end of the year along similar lines to those in North America. Shortly after the year-end, the Group completed the acquisition of Performance Materials Incorporated ('PMI') in the United States for an initial consideration of US$18.5 million. Based on exacting performance criteria, an earn-out formula is in place which could increase the consideration to a maximum of US$50.0 million. PMI's expertise is in the provision of high purity components, formed by chemical vapour deposition, to the semiconductor hardware market. Our electro-ceramics business also had a very good year with organic sales growth of 22.9%. Our share in the piezo electric automotive parking sensor market moved ahead strongly to the point where we have now become a clear leader in both Europe and North America. Progress was made on bringing a number of new initiatives closer to market commercialisation. These include a revolutionary new design of a fuel injector utilising multi-layer ceramic actuators and a piezo electric actuator application to micro-position the read write head of disc drive devices, thus enabling a substantial increase in data storage capacity. Both of these products are being developed with customers who lead in their respective fields. Insulating Ceramics Insulating Ceramics turnover was £317.2 million (1999 : £308.8 million), showing marginal organic sales growth of 0.7%. Underlying operating profits declined, however, to £27.9 million (1999 : £30.6 million) as a result of operational difficulties within the thermal operations in the Americas. Underlying operating margin declined from 9.9% to 8.8%. The thermal ceramics business encountered difficulties with the commissioning of a Mexican manufacturing facility which led to manufacturing variances and capacity shortages in North America. These shortages were met by shipping product from European and Asian facilities at considerable expense. Significant changes have been made to the management of the thermal business and the operational challenges which adversely affected the Americas in 2000 have now been resolved. The future strategic position of the thermal business has been the subject of a major review in the year. A restructuring plan has been developed which will enhance the cash generating capability of this business and concentrate efforts in areas with attractive margin and growth prospects such as our world leading soluble fibre technology. Low growth and low margin parts of the business will be subject to further review. Our crucibles business delivered a particularly creditable performance given the fundamental restructuring implemented during the year. Our French manufacturing facility has now been closed and our UK facility substantially overhauled. These steps have now placed the business in a position to deliver attractive levels of profit and cashflow in the future. Acquisitions and Disposals Acquisitions In September, the Group acquired the piezo ceramic assets and business of Philips Components BV for a consideration of £4.2 million. This acquisition will bring a combination of materials technology and product expertise in the field of multi-layer piezo ceramics to support growth in the telecommunications, transportation and computer industries. During the year, this acquisition contributed £1.0 million to turnover and made a small operating loss of £0.2 million. Disposals The disposal of non-core activities, which commenced in 1999, was completed during the year and generated proceeds of £63.4 million (1999 : £176.9 million). The total proceeds from this programme amounted to £240.3 million over the programme's duration. During the year, discontinued businesses contributed £30.3 million (1999 : £112.1 million) to turnover and £1.9 million (1999 : £5.9 million) to underlying operating profits. Financial Review Group turnover rose to a record £1,051.1 million (1999 : £862.4 million) an increase of 21.9% over last year. Underlying operating profit before goodwill amortisation and operating exceptionals was £111.3 million (1999 : £94.6 million). Operating exceptional charges of £6.9 million (1999 : £17.5 million) were incurred during the year relating to the final stage of the business restructuring programme which commenced in 1999 and which has now been completed. Goodwill amortisation rose to £5.8 million (1999 : £2.0 million) mainly as a result of the acquisition of VAC in December 1999. A gain of £10.2 million (1999 : £32.6 million) has been treated as a corporate exceptional item. This arises from the sale of non-core businesses and from the disposal of fixed assets. Net finance charges were £16.2 million (1999 : £13.5 million) and were covered by underlying operating profits before goodwill amortisation 6.7 times (1999 : 6.9 times). The Group tax charge of £30.5 million (1999 : £32.7 million) gives an effective rate of 32.9% (1999 : 34.7%) after exceptional charges. The tax charge attributable to total exceptional items was £3.0 million (1999 : £8.3 million). Before these exceptional items, the effective Group tax rate was 30.8% and remains in line with last year. Net cash inflow from operating activities was £114.8 million (1999 : £101.9 million). Working capital showed a net increase of £26.4 million compared to an increase of £15.2 million last year. This rise is principally due to the strong organic growth in sales achieved by the Group this year. Net interest payments accounted for £16.2 million (1999: £14.2 million) whereas taxation consumed £18.7 million (1999 : £26.5 million). Capital expenditure increased substantially during the year, largely due to the inclusion of a full twelve months of the rapidly growing magnetics business. Total capital expenditure net of insurance proceeds and proceeds on the disposal of fixed assets rose to £62.5 million (1999 : £34.1 million). With this higher level of capital spending and after dividend payments of £39.0 million (1999 : £39.0 million), the Group experienced an outflow of £21.6 million (1999 : £11.9 million) at the free cashflow level. Borrowings at the year-end were £220.0 million (1999 : £232.3 million) to give gearing of 47.7% (1999 : 53.9%). The underlying earnings per share before goodwill amortisation at 27.5 pence (1999 : 23.2 pence) shows an improvement of 18.5% over the prior year. Final Dividend The Board is recommending a final dividend of 8.5 pence per Ordinary share (1999 : 8.5 pence) to give a total for the year of 15.9 pence per Ordinary share (1999 : 15.9 pence). The dividend will be paid on 6 July 2001 to Ordinary shareholders on the register of members at the close of business on 25 May 2001. A Dividend Reinvestment Plan will be made available again for Ordinary shareholders who would like to take their dividends by way of shares. Details will be posted to shareholders at the end of May 2001. Outlook After the major business restructuring and disposal programme of the last two years, Morgan has emerged in strong shape and has produced an encouraging result for the year. Organic growth in sales across all of our businesses was positive during 2000 and the performance of our magnetics business has exceeded expectations. A portfolio of businesses focused increasingly on markets with long term growth potential will require continued investment in extra product development in addition to capacity expansion. In order to meet these opportunities, cash generation and profitability from the more mature parts of the Group's business portfolio will remain an area of focus. The balance between growth and mature businesses within our portfolio has clearly improved and assuming no significant worsening in the current rate of slowdown across a number of business sectors in the United States, we shall demonstrate continued progress in 2001. Dr. Bruce Farmer CBE, Chairman Ian Norris, Group Chief Executive For and on behalf of the Board 13th March 2001 Morgan House Madeira Walk Windsor Berkshire SL4 1EP CONSOLIDATED PROFIT STATEMENT FOR THE YEAR ENDED 4 JANUARY 2001 Note 2000 1999 (as restated) Total Total £m £m Turnover Continuing operations 1,019.8 750.3 Acquisitions 1.0 - Discontinued operations 30.3 112.1 _______ _____ Group turnover 1 1,051.1 862.4 Other operating income 5.1 6.4 _______ _____ 1,056.2 868.8 _______ _____ Operating profit before goodwill amortisation and operating exceptionals Continuing operations 109.6 88.7 Acquisitions (0.2) - Discontinued operations 1.9 5.9 _______ _____ 111.3 94.6 Operating exceptionals - restructuring costs 2 (6.9) (17.5) Operating profit before goodwill amortisation 104.4 77.1 Goodwill amortisation (5.8) (2.0) Operating profit Continuing operations 97.1 69.8 Acquisitions (0.2) - Discontinued operations 1.7 5.3 _______ _____ Group operating profit 1 98.6 75.1 Corporate exceptional items Continuing operations -Disposal of fixed assets (1.2) 0.7 -Profit on sale of business - 1.6 -Loss on closure of business (2.0) (2.4) Discontinued operations -Profit on sale of businesses 21.4 34.8 -Loss on sale of businesses (8.0) (2.1) _______ _____ 3 10.2 32.6 Profit on ordinary activities before interest and taxation 108.8 107.7 Net finance charges and similar items (16.2) (13.5) Profit on ordinary activities before taxation 92.6 94.2 Taxation 4 (30.5) (32.7) Profit on ordinary activities after taxation 62.1 61.5 Equity minority interest (1.7) (0.8) Net profit attributable to The Morgan Crucible Company plc 60.4 60.7 Preference dividends on non-equity shares (2.1) (2.1) Ordinary dividends on equity shares 5 (36.9) (36.9) Retained profit for the year 21.4 21.7 Earnings per share (Note 6) 2000 1999 Before After Before After goodwill goodwill goodwill goodwill amortisation amortisation amortisation amortisation - underlying 27.5p 25.0p 23.2p 22.4p - basic 27.6p 25.1p 26.1p 25.3p - diluted - 24.9p - 25.1p - underlying diluted - 24.8p - 22.3p CONSOLIDATED BALANCE SHEET AS AT 4 JANUARY 2001 2000 1999 £m £m Fixed assets Goodwill 112.6 107.9 Tangible assets 493.4 489.2 Other investments 18.5 6.2 _____ _____ 624.5 603.3 _____ _____ Current assets Stocks 196.4 189.9 Debtors 252.8 231.7 Cash at bank and in hand 93.6 191.7 _____ _____ 542.8 613.3 Creditors - amounts falling due within one year 400.8 324.8 _____ _____ Net current assets 142.0 288.5 _____ _____ Total assets less current liabilities 766.5 891.8 _____ _____ Creditors - amounts falling due after more than one year Term loans 181.2 322.5 Exchangeable redeemable preference shares 7.5 11.7 Grants for capital expenditure 1.8 2.2 _____ _____ 190.5 336.4 Provisions for liabilities and charges 114.8 124.8 _____ _____ 305.3 461.2 _____ _____ 461.2 430.6 ===== ===== Capital and reserves Equity shareholders' funds Called up share capital 58.0 57.9 Share premium account 44.3 44.2 Revaluation reserve 11.2 15.6 Other reserves 1.6 0.7 Profit and loss account 301.6 266.0 _____ _____ 416.7 384.4 Non-equity shareholders' funds Called up share capital 30.3 30.3 _____ _____ 447.0 414.7 Minority interest Equity 14.1 15.8 Non-equity 0.1 0.1 _____ _____ 14.2 15.9 _____ _____ 461.2 430.6 ===== ===== GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 2000 1999 £m £m Net profit attributable to shareholders 60.4 60.7 Foreign currency translation 8.3 (9.7) _____ _____ Total recognised gains and losses relating to the year 68.7 51.0 ===== ===== CONSOLIDATED CASHFLOW STATEMENT FOR THE YEAR ENDED 4 JANUARY 2001 2000 1999 £m £m £m £m Net cash inflow from operating activities 114.8 101.9 Returns on investments & servicing of finance Interest received 9.6 7.5 Interest paid (25.8) (21.7) Preference dividends paid (2.1) (2.1) _____ _____ Net cash outflow from returns on investments & servicing of finance (18.3) (16.3) Taxation (18.7) (26.5) Capital expenditure and financial investments Purchase of tangible fixed assets (70.9) (40.0) Insurance proceeds for tangible fixed assets 4.4 1.1 Other proceeds on sale of tangible fixed assets 4.0 4.8 Purchase of investments (11.6) (0.6) Disposal of investments - 1.4 _____ _____ Net cash outflow from capital expenditure and financial investments (74.1) (33.3) Acquisitions and disposals Acquisition of subsidiary undertakings (5.6) (140.8) Net cash acquired - 2.1 Deferred consideration for prior year acquisitions (3.7) (20.4) Disposal of businesses 63.4 176.9 _____ _____ Net cash inflow from acquisitions and disposals 54.1 17.8 Equity dividends paid (36.9) (36.9) _____ _____ Cash inflow before use of liquid resources 20.9 6.7 Management of liquid resources 79.4 (69.9) Financing Increase in share capital 0.2 0.3 Increase in bank loans 66.4 161.0 Repayment of bank loans (181.6) (78.7) Repurchase of exchangeable redeemable preference shares (5.2) (3.3) _____ _____ (120.2) 79.3 _____ _____ Net (decrease)/increase in cash (19.9) 16.1 ===== ===== Reconciliation of net cashflow to movement in net borrowings 2000 1999 £m £m Net (decrease)/increase in cash (19.9) 16.1 Cashflow from decrease/(increase) in loans 115.2 (82.3) Cashflow from (decrease)/increase in deposits (79.4) 69.9 Cashflow from repurchase of exchangeable redeemable preference shares 5.2 3.3 _____ _____ Change in net borrowings resulting from cashflows 21.1 7.0 Issue of exchangeable redeemable preference shares (0.3) (4.1) Bank loans acquired with acquisitions - (33.8) Exchange movement (8.5) (1.5) Movement in net borrowings during the period 12.3 (32.4) Opening net borrowings (232.3) (199.9) Closing net borrowings (220.0) (232.3) CONSOLIDATED FREE CASHFLOW FOR THE YEAR ENDED 4 JANUARY 2001 2000 1999 £m £m Net cash inflow from operating activities 114.8 101.9 Net interest paid (16.2) (14.2) Taxation (18.7) (26.5) _____ _____ Cash earnings 79.9 61.2 Dividends paid (39.0) (39.0) _____ _____ Post dividend cashflow 40.9 22.2 Net capital expenditure (66.5) (38.9) Proceeds on sale of tangible fixed assets 4.0 4.8 _____ _____ Free cashflow (21.6) (11.9) ===== ===== Reconciliation of operating profit to net cash inflow from operating activities 2000 1999 Contin- Discon- Contin- Discon- uing tinued Total uing tinued Total £m £m £m £m £m £m Operating profit 96.9 1.7 98.6 69.8 5.3 75.1 Loss on closure of business (1.2) - (1.2) - - - ____ ____ ____ ____ ____ ____ 95.7 1.7 97.4 69.8 5.3 75.1 Depreciation 42.4 1.1 43.5 35.8 3.9 39.7 Amortisation of goodwill 5.7 0.1 5.8 1.8 0.2 2.0 Loss on sale/write off of plant and machinery 0.3 0.6 0.9 0.4 1.0 1.4 Increase in stocks (18.2) (0.4) (18.6) (3.3) (0.8) (4.1) (Increase)/decrease in debtors (26.1) (0.4) (26.5) (6.9) 7.5 0.6 Increase/(decrease) in creditors 23.7 (5.0) 18.7 (5.2) (6.5) (11.7) Decrease in provisions (4.8) (1.6) (6.4) (0.7) (0.4) (1.1) _____ _____ _____ ____ ____ ____ Net cash inflow from operating activities 118.7 (3.9) 114.8 91.7 10.2 101.9 ===== ===== ===== ==== ==== ===== GROUP RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS 2000 1999 £m £m Net profit attributable to shareholders 60.4 60.7 Goodwill written back to profit and loss account 2.4 86.3 Dividends (39.0) (39.0) _____ _____ 23.8 108.0 New share capital 0.2 0.3 Foreign currency translation 8.3 (9.7) _____ _____ Net increase to shareholders' funds 32.3 98.6 Opening shareholders' funds 414.7 316.1 _____ _____ Closing shareholders' funds 447.0 414.7 ===== ===== NOTES 1. SEGMENTAL INFORMATION Product Group Turnover Operating profit 2000 1999 2000 1999 £m £m £m £m Carbon division 563.8 322.2 64.5 43.4 Ceramics division 457.0 428.1 38.1 28.2 _______ ______ ______ _____ Continuing operations 1,020.8 750.3 102.6 71.6 Discontinued operations 30.3 112.1 1.8 5.5 _______ ______ ______ _____ 1,051.1 862.4 104.4 77.1 ======= ====== Goodwill amortisation (5.8) (2.0) ______ _____ Group operating profit 98.6 75.1 ====== ===== Geographical Area The analysis shown below is based on the location of the contributing companies: Turnover Operating profit 2000 1999 2000 1999 £m £m £m £m United Kingdom Sales in the UK 53.1 57.2 Sales overseas 70.9 64.7 _______ _____ Total United Kingdom 124.0 121.9 6.6 2.8 Rest of Europe 391.7 197.2 39.2 9.6 The Americas 478.3 364.4 42.5 49.8 Far East and Australasia 117.0 96.9 12.3 7.6 Middle East and Africa 11.6 10.2 2.0 1.8 _______ _____ _____ ____ 1,122.6 790.6 102.6 71.6 Discontinued operations 30.3 112.1 1.8 5.5 Inter-segment sales (101.8) (40.3) _______ _____ _____ _____ 1,051.1 862.4 104.4 77.1 ======= ===== Goodwill amortisation (5.8) (2.0) _____ ____ Group operating profit 98.6 75.1 ===== ==== Turnover 2000 1999 £m £m The analysis shown below is based on the location of the customer: United Kingdom 76.9 66.0 Rest of Europe 326.3 209.0 The Americas 442.4 348.7 Far East and Australasia 157.8 110.6 Middle East and Africa 17.4 16.0 _______ _____ 1,020.8 750.3 Discontinued operations 30.3 112.1 _______ _____ 1,051.1 862.4 ======= ===== 2.OPERATING EXCEPTIONALS The redundancy and reorganisation costs of £6.9 million incurred during 2000 (1999: £17.5 million) have been shown separately as exceptional due to the amounts involved. 3.CORPORATE EXCEPTIONAL ITEMS The corporate exceptional item mainly relates to profit and loss on the sale of businesses. Power Industry Products, Laser Diode and Centronics were the principal businesses disposed during 2000, whereas in 1999 it was the Chemical Products business. 4.TAXATION 2000 1999 £m £m United Kingdom tax 14.9 5.5 Overseas tax 15.6 27.2 _____ _____ Total taxation 30.5 32.7 ===== ===== Overseas tax includes £4.5 million charged on exceptional profits. United Kingdom tax includes a tax credit of £1.5 million attributable to exceptional losses. 5.DIVIDENDS ON ORDINARY SHARES 2000 1999 2000 1999 Pence per share £m £m Interim 7.4 7.4 17.2 17.2 Final 8.5 8.5 19.7 19.7 _____ _____ _____ _____ 15.9 15.9 36.9 36.9 ===== ===== ===== ===== 6. EARNINGS PER SHARE a. Basic and underlying earnings per share 2000 1999 Before After Before After goodwill goodwill goodwill goodwill amortis- amortis- amortis- amortis- ation ation ation ation £m £m £m £m Profit after tax and minority interest 66.2 60.4 62.7 60.7 Preference dividend (2.1) (2.1) (2.1) (2.1) _____ _____ _____ _____ Basic earnings 64.1 58.3 60.6 58.6 Adjusted by all post tax exceptional items (0.3) (0.3) (6.8) (6.8) _____ _____ _____ _____ Underlying earnings 63.8 58.0 53.8 51.8 ===== ===== ===== ===== Weighted average number of ordinary shares 231,884,681 231,793,066 Basic earnings per share 27.6p 25.1p 26.1p 25.3p ____ ____ ____ ____ Underlying earnings per share 27.5p 25.0p 23.2p 22.4p ____ ____ ____ ____ The Directors have disclosed an underlying earnings per share as, in their opinion, this better reflects the real performance of the Group and assists comparison with the results of earlier years. b. Diluted earnings 2000 1999 £m £m Profit after tax and minority interest 60.4 60.7 Preference dividend as calculated under FRS14 - - _____ _____ Diluted earnings 60.4 60.7 Adjusted by all post tax exceptional items (0.3) (6.8) _____ _____ Underlying diluted earnings 60.1 53.9 ===== ===== Weighted average number of ordinary shares 231,884,681 231,793,066 Dilutive effect of share option schemes 261,705 113,035 Dilutive effect if Preference shares converted 10,259,858 10,272,343 ____________ ___________ Weighted average number of diluted shares 242,406,244 242,178,444 ____________ ___________ Diluted earnings per share 24.9p 25.1p ____ ____ Diluted underlying earnings per share 24.8p 22.3p ____ ____ 7. CURRENT LIABILITIES Current liabilities include bank loans and overdrafts of £124.9 million (1999: £89.8 million). The financial information contained in this Preliminary Statement does not amount to statutory accounts for the Company's financial years ended 4 January 2001 and 4 January 2000. It has been approved by the Board of Directors on 13 March 2001 and has been prepared on a consistent basis with the accounting policies set out in the Group's 1999 annual report and accounts. Statutory accounts for the year ended 4 January 2000 have been filed with the Registrar of Companies and the statutory accounts for the year ended 4 January 2001 are expected to be filed immediately following the Annual General Meeting of the Company in May 2001. This Preliminary Statement will be dispatched to all registered holders of Ordinary shares and Preference shares. Copies of this statement may be obtained from the Secretary at the Registered Office of the Company, Morgan House, Madeira Walk, Windsor, Berkshire, SL4 1EP.

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