Final Results - Year Ended 31 Dec 1999, Part 2

Cookson Group PLC
6 March 2000

PART 2

GROUP PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 1999

                                                          1999
                           Before                       
                           exceptional
                           items and                    
                           goodwill                     
                           amortisation                 
                                                        
                                              Exceptio  
                                              nal
                                    Operatio  items     
                                    ns        and
                                    disconti  goodwill  
                                    nued
                                    and to    amortisa  
                                    be        tion
                           Ongoing  disposed  (notes    
                           busines  (note 1)  1,2,3)    Total
                           ses
                     note  £m       £m        £m        £m
                                                        
Turnover                                                
Continuing operations    1,614.9  223.2     -         1,838.1
Discontinued                                            
operations                -        72.0     -            72.0
                                                        
Total turnover        1  1,614.9  295.2     -         1,910.1
Share of joint                                          
ventures:
   - continuing            (20.5)   -         -         (20.5)
   - discontinued        -        (27.2)      -         (27.2)
                           
Turnover - Group                                       
subsidiaries             1,594.4  268.0       -         1,862.4
                                                        
Operating profit                                        
Continuing operations      142.6   20.4      (45.6)       117.4
Goodwill amortisation                                   
   - continuing       6     -        -       (12.9)       (12.9)
Discontinued                                            
operations                  -       5.1        -            5.1
                                                        
Group operating                                         
profit                     142.6    25.5      (58.5)    109.6
Share of joint                                          
 ventures                   1.5      2.9       -         4.4
                                                        
Total operating                                         
profit                 1   144.1    28.4      (58.5)    114.0
                                                        
Loss on sale or                                         
  termination of                                     
  discontinued
  operations and on                                     
  disposal
  of fixed assets       3   -        -         (18.4)    (18.4)
                                                        
Profit before                                           
interest                   144.1     28.4      (76.9)     95.6
                                                        
Interest                4                                (24.0)
                                                        
Profit before                                           
taxation                                                  71.6
Taxation on profit                                      
on ordinary                                          
activities                                               (33.3)
                                                        
Profit/(loss) after                                     
taxation                                                 38.3
Minority interests                                       (1.6)
                                                        
Profit/(loss) for the                                   
   financial year                                        36.7
Dividends                                               (68.4)
                                                        
Net loss transferred                                    
   to reserves                                          (31.7)
                                                        
Basic earnings per                                      
share before all                                             
exceptional items
 and goodwill                                           
amortisation           5                                15.5p
                                                        
Basic and diluted                                       
   earnings per share  5                                 5.2p
                                                        

GROUP PROFIT AND LOSS ACCOUNT / contd

                                                         1998
                           Before                      
                           exceptional
                           items and                   
                           goodwill                    
                           amortisation                
                                             Exceptio  
                                             nal
                                   Operatio  items     
                                   ns        and
                                   disconti  goodwill  
                                   nued
                                   and to    amortisa  
                                   be        tion
                           Ongoin  disposed  (notes    
                           g
                           busine  (note 1)  1,2,3)    Total
                           sses
                     note  £m      £m        £m        £m

Turnover                                               
Continuing operations    1,376.6  175.3     -         1,551.9
Discontinued                                           
operations                 -       208.1     -         208.1
                                                       
Total turnover       1   1,376.6   383.4     -        1,760.0
Share of joint                                         
ventures:
   - continuing            (16.8)   -         -         (16.8)
   - discontinued         -        (59.7)     -         (59.7)
                           
Turnover - Group         1,359.8   323.7      -       1,683.5
subsidiaries                       
                                                       
Operating profit                                       
Continuing operations      129.6   18.4      (49.5)    98.5
Goodwill amortisation                                  
   - continuing       6     -       -         (2.8)     (2.8)
Discontinued                                           
operations                  -       16.3      -         16.3
                                                       
Group operating                                        
profit                     129.6   34.7      (52.3)    112.0
Share of joint                                         
ventures                   1.2     4.5       -         5.7
                                                       
Total operating                                        
profit                 1   130.8   39.2      (52.3)    117.7
                                                       
Loss on sale or                                        
termination of                                       
discontinued
operations and on                                    
disposal
of fixed assets        3     -       -         (89.6)    (89.6)
                                                       
Profit before                                          
interest                   130.8   39.2      (141.9)   28.1
                                                       
Interest               4                               (18.7)
                                                       
Profit before                                          
taxation                                                 9.4
Taxation on profit                                     
on ordinary                                         
activities                                             (27.4)
                                                       
Profit/(loss) after                                    
taxation                                               (18.0)
Minority interests                                      (2.1)
                                                       
Profit/(loss) for the                                  
   financial year                                      (20.1)
Dividends                                              (64.6)
                                                       
Net loss transferred 
to reserves                                            (84.7)
                                                       
                                                       
Basic earnings per                                     
share before
before all                                            
exceptional items
and goodwill                                          
amortisation           5                               16.0p
                                                       
Basic and diluted                                      
earnings per share     5                               (2.9)p
                                                       
GROUP BALANCE SHEET AS AT 31 DECEMBER 1999

                                         note  1999   1998
                                               £m     £m
                                                      
Fixed assets                                          
Goodwill                                   6  600.6   93.9
Tangible assets                            7  483.5  484.6
Investments                                8   95.5   38.9
                                                      
Total fixed assets                          1,179.6  617.4
                                                      
Current assets                                        
Stocks                                        282.2  230.4
Debtors                                       527.0  376.6
Cash at bank                                   50.1   96.8
                                                      
Total current assets                          859.3  703.8
                                                      
Creditors: amounts falling due within one             
year
Borrowings                                    (45.5) (23.0)
Enthone purchase consideration payable       (284.3)   -
Other creditors                              (496.3)(361.3)
Total current liabilities                    (826.1)(384.3)
                                                      
Net current assets                             33.2  319.5
                                                      
Total assets less current liabilities       1,212.8  936.9
                                                      
Creditors: amounts falling due after more             
than one year
Convertible bond                              (80.0)(77. 3)
Other borrowings                             (386.0)(215.2)
Other creditors                               (60.5) (27.9)
                                                      
Provisions for liabilities and charges       (103.9) (71.6)
                                                      
                                                      
                                              582.4  544.9                      
                               
                                                      
Equity capital and reserves                           
Called up share capital                       362.6  345.8
Share premium account                         375.3  330.8
Reserves                                     (160.4)(138.3)
                                                      
Total shareholders funds                      577.5  538.3
                                                      
Minority interests                              4.9    6.6
                                                      
                                              582.4  544.9
                                                      
STATEMENT OF GROUP CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 1999


                              1999         1998    
                              £m      £m    £m       £m
                                                     
Reconciliation of operating                          
profit
to net cash inflow from                           
operating activities                              
Group operating profit                               
   before exceptional items  155.2         161.5
Depreciation and goodwill                            
amortisation                  66.1         57.9
(Increase)/decrease in                               
working capital              (26.2)         4.1
Decrease in provisions        (3.1)        (0.6)
Payments in respect of                               
exceptional
rationalisation costs                             
(note 2)                     (21.1)        (6.3)
Net cash inflow from                                 
   operating activities      170.9        216.6
                                                     
Cash flow statement                   Free          Free
                                      Cash          Cash
                                      Flow          Flow

Net cash inflow from         170.9   170.9  216.6  216.6
operating activities    

Dividends from joint                                 
ventures                       2.4     2.4    3.3    3.3
                                                     
Interest paid                (19.9)  (19.9) (18.2) (18.2)
                                                     
Taxation                     (14.8)  (14.8) (46.2) (46.2)
                                                     
Capital expenditure                                  
Payments to acquire fixed                            
assets                       (80.6)         (85.2)
Receipts from disposal of                            
fixed assets                  13.7           14.6
                                            (70.6)
                             (66.9)  (66.9) (70.6)(70.6)

Acquisitions and disposals                           
Net proceeds from disposal                           
of subsidiaries              140.9             -
Consideration for                                    
acquisition of
subsidiaries and joint      (394.0)        (190.4)     
ventures               
Net proceeds from divestment                         
   of joint ventures          17.3           65.0
Other, including additional                          
costs
for prior year disposals     (10.8)           2.6
                            (246.6)        (122.8)     
                                                     
Dividends paid               (66.0)  (66.0) (64.5) (64.5)
                                                     
Free cash flow                         5.7          20.4
                                                     
                                                     
Net cash outflow before     (240.9)        (102.4)     
financing               
                                                     
Financing                                            
Issue of shares                0.4            2.7

                             
Increase in debt             199.5           70.3
                                                            
Decrease in cash during the                          
period                        (41.0)        (29.4)
                                      
Reconciliation of net cash                           
flow
   to movement in net debt                           
Decrease in cash during the                          
period                        (41.0)       (29.4)
                                     
Cash flow from movement in                           
debt
   and lease financing        (199.5)      (70.3)                  
                             
Change in net debt resulting                         
   from cash flows            (240.5)      (99.7)
                                          
Issue costs amortised         (0.5)        (0.5)
                                     
Loans acquired with                                  
subsidiaries                     -         (7.5)
                                        
ESOP deferred option premium     -         (5.7)
  
Foreign exchange difference   (1.7)         0.8
                            
                                                     
                                                     
Movement in net debt during   (242.7)      (112.6)     
the period                   
Net debt at 1 January         (218.7)      (106.1)     
                              
                                                     
Net debt at 31 December       (461.4)      (218.7)     
                                                



STATEMENT OF TOTAL GROUP RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 31 DECEMBER 1999


                                            1999  1998
                                            £m    £m
                                                  
                                                  
Profit/(loss) for the financial year        36.7  (20.1
Exchange adjustments                        (3.9) (5.6)
FRS 15 adjustment (note 7)                  (6.0)    -
                                                  
Total net recognised gains/(losses)         26.8   (25.7)
relating to the year                        


RECONCILIATION OF MOVEMENTS IN GROUP SHAREHOLDERS FUNDS
FOR THE YEAR ENDED 31 DECEMBER 1999


                                              1999   1998
                                              £m     £m
                                                     
Shareholders funds as at 1 January            538.8  571.1
                                                     
Total net recognised gains/(losses)for the   
year (see above)                              26.8  (25.7)
Dividends                                    (68.4) (64.6)
New share capital subscribed                  61.3    4.6
Cancellation of non-equity share capital         -  (1.8)
Goodwill transferred to the profit and loss          
account in respect of the sale or termination 
of operations                                 19.5   54.7
Net addition/(reduction)to shareholders             
funds                                         39.2   (32.8)
                                                     
Shareholders funds as at 31 December          577.5   538.3
                                           

NOTE OF GROUP HISTORICAL COST PROFITS AND LOSSES
FOR THE YEAR ENDED 31 DECEMBER 1999

There were no material differences between the Group loss for the year and the
historical cost equivalent


NOTES TO THE ACCOUNTS

1 Segmental analyses
The results reported as operations to be disposed represent those of the
Group's Telecommunication Products and Plastic Mouldings businesses, which
formed part of the Group's former Engineering division. The businesses
comprising the results of discontinued operations are Cookson Fibers, Zimco
and Entek (former Engineering division) and TAM Ceramics and Polyflex
(Electronics division).

                                1999               1998
                                Operating          Operating
                      Turnov    profit    Turno    profit
                      er                  ver
By Business           £m         £m        £m        £m
                                             
Electronics           790.1      64.6      686.0     51.0
Ceramics              541.6      49.5      415.4     52.4
Precious Metals       283.2      30.0      275.2     27.4
                                             
Ongoing operations    1,614.9    144.1     1,376.6  130.8
                      
Operations to be      223.2      20.4      175.3    18.4
disposed
Discontinued          72.0       8.0       208.1    20.8
operations
Goodwill amortisation -        (12.9)      -        (2.8)
- ongoing (note 6)
Exceptional items -   -        (45.6)      -       (49.5)
ongoing
                                             
Total                1,910.1   114.0      1,760.0  117.7
                   

2  Operating exceptional items

                              1999      1998
                              £m        £m
                                        
Rationalisation programme     21.0      49.5
Integration of Premier        22.9      -
Refractories
International, Inc.
Other                         1.7       -
                                        
Total before tax              45.6      49.5
Taxation attributable         (2.3)     (9.7)
                                        
Total after tax               43.3      39.8
                                        

The £21.0m charge in 1999 relates to a Group wide rationalisation programme
initiated in 1998. Cash spend in 1999 was £14.2m, leaving £12.1m provided at
31  December 1999. No further charges relating to this programme are  expected
to be made.

The charge of £22.9m relates to costs arising from the integration of Premier
Refractories International, Inc. ('Premier'), which was acquired during the
year. Of the 1999 charge, £10.2m related to asset write-downs and £6.9m was
spent, leaving £5.8m provided at 31 December 1999. A further £23.0m of cash
costs are expected to be charged in 2000.

3  Loss on sale or termination of discontinued operations and on disposal of
fixed assets.

Net losses on sale or termination of operations in 1999 include
a loss on the sale of the Group's 35% interest in Entek Holdings LLC of
£9.0m, after goodwill written off of £12.3m; a profit of £5.4m on the sale of
TAM Ceramics, after goodwill written off of £7.2m; and additional costs
relating to prior year disposals of £13.9m (1998: £10.3m). In 1998 the total
loss included the write-off of all the goodwill which arose on the acquisition
of the businesses comprising Cookson Fibers, Inc (£58.3m) and the Group's 45%
share of Zimco Holdings Pty Ltd (£2.1m), both of which were disposed of in
early 1999. For the full year 1998, the loss totalled £80.6m of which £60.4m
was goodwill.

The net loss on disposal of fixed assets comprises £0.9m of losses (1998:
£10.3m of losses net of £1.3m of profits). In 1999, the taxation credit
attributable to the losses was £nil (1998: £0.8m).

4  Interest
From 1999, precious metals consignment fees are included within Group
operating profit, whereas in prior years they were included in the net
interest charge. Prior year comparatives have been restated accordingly.
Consignment fees were £5.2m both in 1999 and in 1998.

5  Earnings per share
Basic earnings per share are calculated using a weighted average of 700m
(1998: 685m) ordinary shares in issue during the year. Diluted earnings per
share are calculated assuming conversion of outstanding dilutive share
options. These adjustments give rise to an increase in average ordinary
shares of 2.9m (1998:1.9m). On the face of the Group profit and loss account,
earnings per share are shown both before and after goodwill amortisation and
exceptional items. There were 725m shares in issue at 31 December 1999
(1998: 692m).

The Directors believe that the calculation of earnings per share excluding
goodwill amortisation and all exceptional items, together with the associated
tax charge or credit, gives the most appropriate measure of the underlying
earnings of the Group. This calculation is based on earnings of £36.7m (1998:
£20.1m loss), less goodwill amortisation and exceptional items totalling
£76.9m (1998: £141.9m) and less the associated tax credit of £5.2m (1998:
£11.9m).

6  Goodwill
Goodwill arising in 1999 amounted to £519.6m (1998: £102.4m) and is being
amortised over its estimated life of 20 years. Accumulated goodwill arising
prior to 1998, which remains written-off directly against Group reserves,
amounts to £513.0m (1998: £532.5m). Of this total, £85.1m relates to the
business reported as operations to be disposed.

Of the 1999 goodwill amortisation of £12.9m (1998: £2.8m), £4.6m related to
Electronics (1998: £0.5m), £ 7.2m to Ceramics (1998: £1.5m) and £1.1m to
Precious Metals (1998: £0.8m).

7  Tangible fixed assets
The Company has adopted Financial Reporting Standard 15, 'Tangible Fixed
assets', for the 1999 accounts and has changed its policy of carrying certain
of the Group's tangible fixed assets at valuation. The effect of this change
of policy is that the carrying amount of all tangible fixed assets have now
been restated to historical cost less accumulated depreciation, necessitating
an adjustment of £6.0m, the impact of which is not material on the Group
accounts.

8  Investments
Investments include joint ventures and the Group's investment in a revenue-
sharing arrangement with Electric Lightwave, Inc.

9  Acquisitions
The contribution to turnover of acquisitions for continuing operations was
£177.1m and for operating profit was £14.3m.

10  Post balance sheet event
Following the acquisition of the Enthone-OMI group of companies, announced
in December 1999, the balance of the purchase consideration amounting to
£284.3m ($459.8m) was paid on 10 January 2000.

11  Financial information
For the purpose of this preliminary announcement, 'Group' results represent
the results of the parent company and its subsidiary companies, whereas
'Total' results represent Group results together with the Group's share of
the results of its joint ventures.

The financial statements have been prepared on the basis of accounting
policies set out in the Group's audited statutory accounts for 1999 and
were approved by the Board of Directors on 3 March 2000.

The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 1999 or 1998 but is
derived from those accounts.  Statutory accounts for 1998 have been
delivered to the Registrar of Companies, and those for 1999 will be delivered
following the Company's Annual General Meeting.  The auditors have reported
those accounts; their reports were unqualified and did not contain
statements under section 237(2) or (3) of the Companies Act 1985. These
sections address whether proper accounting records have been kept, whether
the Company's accounts are in agreement with these records and whether
the auditor has obtained all the information and explanations necessary for
the purposes of their audit.