Interim Results
Cookson Group PLC
19 July 2002
ANNOUNCEMENT OF 2002 INTERIM RESULTS
• Improving trend in turnover and operating profits experienced during the
first half
• Positive free cash flow of £31 million generated; net debt unchanged from
start of year
• Proposed rights issue to raise c. £277.5 million (net of expenses)
announced
• Sale of the Precision Products businesses to be progressed
Commenting on the results and current outlook, Stephen Howard, Group Chief
Executive, said:
'The Board believes Cookson is well positioned in its major markets. During the
first half of 2002 the Group witnessed an improving trend in activity with
turnover for the second quarter of 2002 8% higher than the first quarter of
2002. Furthermore, the rigorous action taken early in 2001 and which has
continued into 2002, both to align the Group's cost base with the reduced levels
of demand being experienced and to conserve cash, have mitigated the impact on
profitability of the downturn in the Group's major markets.
Since the end of the first half of 2002, trading has been in line with the
Company's expectations. Although the timing of a sustained recovery in the
electronics industry remains unclear and activity in the third quarter is
traditionally quieter than in the second quarter, Cookson expects to be able to
leverage the benefits of its operational gearing to take advantage of an upturn
when it occurs.
Having considered a number of strategic initiatives to improve the Group's
financial position, the Board of Cookson has concluded that a rights issue is
currently the most appropriate course of action. Further details of the
background to the proposed rights issue are contained in a separate circular
sent to shareholders today. The rights issue seeks to raise some £277.5 million
in net cash proceeds, which will be used to reduce bank debt.'
19 July, 2002
STRATEGIC INITIATIVES
Prior to arranging its £450 million committed syndicated bank facility in
December 2001, the Board determined that it would be in the best interests of
the Company to reduce meaningfully the level of the Group's borrowings. At that
time the Board considered that the best way to achieve this was to pursue a
number of strategically attractive initiatives, including disposals and joint
ventures, which would then be followed by a possible equity issue to supplement
the proceeds of these initiatives. Certain of these initiatives that would have
facilitated the objective of reducing Group borrowings were underway when the
bank financing was completed. In the current environment, most of these
initiatives did not materialise as planned. In light of this, and given the
level of debt and the security and other constraints attaching to it, the Board
was concerned that the Group's ability to pursue its strategies fully could
increasingly be impacted.
In light of current circumstances, the Board has closely reviewed the Group's
business activities. It has concluded that, given the leadership position that
each core division holds, there is substantial potential for a significant
recovery from the current cyclical downturn in the Group's major markets.
Furthermore, the Board believes that such a recovery - combined with the Group's
reduced operating cost base - would make a return to the levels of profitability
seen prior to 2001 achievable. The Board therefore considers that the best
immediate basis for maximising shareholder value is to continue to concentrate
on and to support fully the Group's three divisions and to strengthen its
balance sheet. Accordingly the Board has concluded that a rights issue is now
the most appropriate course of action.
In addition, the Board has decided to progress the sale of the Precision
Products businesses within the Precious Metals division and of certain small
businesses. The Board will continue to review all strategic options, including
further disposals or joint ventures, to maximise shareholder value.
GROUP OVERVIEW
Market conditions
Trading conditions in Cookson's major markets in the first half of 2002 were
broadly similar to those of the second half of 2001. This was reflected in the
Group's turnover from continuing operations which was virtually unchanged in the
first half of 2002 compared with the second half of 2001. However, Cookson
witnessed an improving trend during the first half of 2002 as Group turnover for
the second quarter of 2002 was 8% higher than the first quarter of 2002.
There were signs in the first and second quarters of 2002 that the severe global
downturn in the electronics industry which took hold in the first half of 2001
was continuing to abate. Nevertheless, levels of activity in the electronics
industry and in the Group's Electronics division in the first half of 2002
remained significantly below the peak seen in the second half of 2000. The
performance of the Group's Ceramics division improved as US steel production
continued to hold up well in the second quarter of 2002 following an increase in
production at the end of the first quarter, following the imposition of import
tariffs by the US government. In Europe, steel production in the second quarter
of 2002 was also higher, following a weak first quarter. For the Precious Metals
division, trading conditions in the second quarter of 2002 improved gradually
compared with the first quarter.
Cost-cutting and cash generation programmes
In the first half of 2002, management has continued many of the cost-saving
programmes that commenced in early 2001. By the end of June 2002, a headcount
reduction of some 3,500, representing 17% of the total workforce, had taken
place. Supplemented by the Premier and Enthone acquisition integration
programmes, which have resulted in an additional headcount reduction of some
500, the cost-saving programmes were aimed primarily at bringing the Group's
cost base in line with the reduced levels of demand and streamlining operating
processes. Care has been taken to ensure that the Group maintains the capacity
and the ability to benefit from an upturn in its markets when it occurs.
During the first half of 2002, management has continued to focus on reducing
working capital requirements, controlling capital expenditure and optimising
internal investment, which resulted in the Group generating positive free cash
flow in the first half of 2002 and ending the period with net debt of £749.1
million, virtually unchanged from the £749.6 million outstanding at the end of
2001.
RESULTS OF OPERATIONS
Turnover and Operating profit/(loss) by division - continuing operations(1)
Six months ended 30 June
2002 2001
Operating Operating
Turnover (loss)/ profit(2) Turnover profit(2)
£ m £ m £ m £ m
Electronics 357.6 (11.7) 496.6 10.9
Ceramics 344.9 18.6 381.5 26.6
Precious Metals 200.5 10.7 218.7 16.6
Continuing operations 903.0 17.6 1,096.8 54.1
Notes:
(1) Includes the Group's share of turnover and operating profit/(loss)
attributable to joint ventures.
(2) Before goodwill amortisation and exceptional items.
Group - continuing operations
Turnover. Turnover of £903.0 million in the first half of 2002 was 18% lower
than the first half of 2001 and down 17% on an organic basis (i.e. after
excluding the impact of acquisitions, discontinued operations and foreign
currency translation). The decrease was principally due to weakened end-market
demand in the Electronics division, lower US and EU steel production volumes in
the Ceramics division and lower consumer demand in the key markets of the
Precious Metals division. The rate of the decline in turnover lessened over the
period and for the first half of 2002 turnover was 1% lower than the second half
of 2001. A gradually improving trend was also evidenced in the second quarter of
2002 and turnover in this period was 8% higher than that of the first quarter of
2002.
Operating profit. Operating profit declined from £54.1 million in the first half
of 2001 to £17.6 million in the first half of 2002, a decrease of 67% both as
reported and on an organic basis. The fall in operating profit was principally
driven by an 18% decrease in Group turnover, but the extent of its decline in
operating profit was, however, offset by the benefits of the cost-cutting
programmes initiated during 2001, which continued into 2002. Despite a decline
in turnover compared with the second half of 2001, the benefits of these
programmes became more evident over time as operating profit in the first half
of 2002 was £15.2 million higher than in the second half of 2001. The increased
rate at which benefits were accruing was evidenced in the second quarter of
2002, as operating profit rose to £19.2 million from a loss of £1.6 million in
the first quarter of 2002.
Geographical analysis of turnover and operating profit. The United States is the
Group's principal operating market and the Group's US businesses are the biggest
contributors to the total Group turnover from continuing operations, directly
contributing 42% of turnover in the first half of 2002, compared with 43% in the
first half of 2001. As a consequence of the depressed US market conditions
experienced in the first half of 2002, the Group's continuing US operations
incurred an operating loss of £15.1 million during that period, compared with a
profit of £10.4 million in the first half of 2001 and a loss of £19.4 million in
the second half of 2001.
Electronics division
Turnover. In the first half of 2002, turnover decreased by 28% to £357.6 million
from £496.6 million in the first half of 2001 and by 27% on an organic basis.
The division's relative contribution to Group turnover from continuing
operations decreased from 45% in the first half of 2001 to 40% in the first half
of 2002.
Turnover in the first half of 2001 was adversely impacted by a sharp fall in
manufacturing output and end-market demand in the electronics industry, the
extent of which was particularly severe in the United States. These market
conditions resulted primarily from excess inventory that had built up throughout
the industry from late 2000 and, by the end of the first quarter of 2001, demand
across all segments of the industry began to deteriorate sharply. The downturn
in the industry became more pronounced in the second quarter of 2001 and
weakened still further in the second half of that year, exacerbated by the
events of 11 September 2001.
In the first half of 2002, the downturn in the electronics industry began to
show signs of abating and turnover for the division was virtually unchanged from
the second half of 2001. Furthermore, a gradual improvement in levels of
activity began to appear in the second quarter of 2002 and as a result the
division's turnover was 7% higher than the first quarter of 2002.
In the division's largest sector, PWB Materials and Chemistry, a solid first
quarter for 2001 was followed by a sharp reduction in demand in the second
quarter for Polyclad's laminate products, particularly in the United States. The
fall in demand was, however, much less pronounced for Enthone's chemistry
products during the first half of 2001. In the second half of 2001, the sector's
turnover fell further, but stabilised at reduced levels in the fourth quarter of
2001. Following a slow first quarter, turnover for Enthone's chemistry products
improved in the second quarter of 2002, whilst that of Polyclad's laminates
business remained unchanged. This resulted in the sector's turnover for the
first half of 2002 being 3% higher than the second half of 2001.
Following a marked reduction in order intake in the fourth quarter of 2000,
turnover in the Equipment sector fell sharply throughout the first half of 2001
and into the second half of that year. Activity levels in the first half of 2002
remained depressed and at significantly lower levels than the first half of
2001, although only marginally lower than the second half of 2001.
Turnover for the Assembly Materials sector was also adversely impacted by the
downturn in the electronics industry, driven by the decline in sales of solder
paste and spheres during 2001, although to a lesser extent than the division's
laminate business and its Equipment sector. The sector's turnover for the first
half of 2002 was only marginally lower than in the second half of 2001.
Operating profit. Operating profit for the Electronics division for the first
half of 2002 continued to be adversely impacted by the low level of trading
activity within its principal markets and an operating loss of £11.7 million was
incurred compared with an operating profit of £10.9 million in the first half of
2001. The fall in operating profit was mitigated by the cost-cutting measures
implemented during 2001 and extended into 2002. Together with the acquisition
integration programme associated with Enthone, which is now significantly
complete, as at 30 June 2002 these initiatives have resulted in a reduction in
the division's headcount by 2,750 employees, or 32% of the division's workforce,
since the beginning of 2001. As a result, the operating loss in the first half
of 2002 was £13.5 million lower than the operating loss in the second half of
2001 on unchanged turnover. Furthermore, on turnover of approximately £185
million in the second quarter of 2002, the division operated at break-even for
that period. Acquisitions, discontinued operations and foreign currency
translation did not have a material impact on operating profit between the first
halves of 2001 and 2002.
Ceramics division
Turnover. The Ceramics division's turnover in the first half of 2002 was £344.9
million, down 10% on both a reported and organic basis from the £381.5 million
achieved in the first half of 2001. The division's relative contribution to
turnover of the Group's continuing operations increased from 35% in the first
half of 2001 to 38% in the first half of 2002.
Approximately 80% of the division's turnover is closely linked to the level of
steel production in the markets within which it operates, principally the United
States and Europe. Lower levels of US and UK steel production in the first half
of 2002 compared with the first half of 2001 contributed to a 9% decline in
turnover in the division's Iron and Steel sector. However, turnover in
developing markets such as South America, Central and Eastern Europe and
Asia-Pacific remained sound, partially offsetting the effect of lower US and UK
production volumes. However, US steel production did improve in the second
quarter of 2002 and, as a result, turnover for the Ceramics division was 10%
higher in the second quarter of 2002 than in the first quarter of 2002.
Turnover in the first half of 2002 in the Foundry and Industrial Products
sector, which is indirectly linked to the level of US and European steel
production, also decreased compared with the first half of 2001, but to a lesser
extent than in the Iron and Steel sector. In the Glass sector, increased sales
resulting from previously deferred furnace-lining projects were more than offset
by decreased activity in the fused silica operations, leading to lower turnover
in the sector in the first half of 2002 than in the same period last year.
Operating profit. The operating profit of the Ceramics division in the first
half of 2002 was £18.6 million, representing a 30% decline from the £26.6
million achieved in the first half of 2001 and a decline of 28% on an organic
basis. The decline in operating profit was primarily due to the lower level of
turnover, although the impact was lessened by a reduction in the division's cost
base. As a result of both cost-cutting initiatives and the now completed
programme to integrate Premier, the division's headcount has been reduced by 900
employees, or 10% of the division's total since the beginning of 2001. The full
benefits of these measures resulted in operating profit in the first half of
2002 being 34% higher than the second half of 2001, despite turnover being 1%
lower.
Precious Metals division
Turnover. The Precious Metals division's turnover was down 8% on both a reported
and organic basis to £200.5 million in the first half of 2002 from £218.7
million in the first half of 2001. The division's relative contribution to total
turnover from continuing operations increased from 20% in the first half of 2001
to 22% in the first half of 2002.
A decrease in consumer demand in the United States and Europe, the principal
markets for the division's Jewellery sector, which took effect increasingly
during the second half of 2001, continued in the first quarter of 2002. There
was, however, an improvement in trading conditions in the second quarter.
Traditionally, turnover for the Jewellery sector is higher in the second half of
the year due to the build-up in jewellery sales and inventory prior to the
December holiday season and therefore comparisons between the first and second
halves of the year are not necessarily meaningful.
The division's Precision Products sector experienced reduced demand from
US-based automotive, electronics and telecommunications customers beginning in
the second quarter of 2001 which continued through the second half of 2001 and
into the first quarter of 2002. In the second quarter of 2002, turnover
increased by 4% over the first quarter of 2002 as demand from these customers
began to increase.
Operating profit. Operating profit of the Precious Metals division in the first
half of 2002 was £10.7 million, representing a 35% decline on a reported basis
and a 33% decline on an organic basis from the £16.6 million achieved in the
first half of 2001. The reduction in operating profit was primarily due to
turnover in the first half of 2002 being 8% down on the first half of 2001,
although this decline was mitigated by a reduction in headcount of some 350, or
10% of the division's workforce, as part of the division's cost-cutting
programmes since the beginning of 2001. After a slow start to the year, the
division's operating profit in the second quarter of 2002 improved over that of
the first quarter.
Operating exceptional items
In the first half of 2002, operating exceptional items of £8.0 million were
charged as a result of cost-saving initiatives, as compared to £7.4 million
charged in the first half of 2001. The costs associated with these initiatives
in 2002 were £5.3 million in the Electronics division, £2.2 million in the
Ceramics division and £0.5 million in the Precious Metals division.
Goodwill amortisation
In the first half of 2002, the Group's goodwill amortisation charge was £19.2
million compared with £19.4 million in the first half of 2001. Of the goodwill
amortisation charge in 2002, £10.0 million related to the Electronics division,
£7.8 million to the Ceramics division and £1.4 million to the Precious Metals
division.
Discontinued operations - turnover and operating profit
In the first half of 2002, there was neither turnover nor operating profit or
loss attributable to discontinued operations. In the first half of 2001,
turnover and operating profit from discontinued operations amounted to £57.9
million and £2.5 million, respectively, reflecting the impact of the sale of the
Magnesia Chemicals business in January 2001 and the disposal of the Group's
Plastic Mouldings businesses in the second half of that year.
Net loss on sale or closure of operations
In the first half of 2002, the net loss on sale or closure of operations was
£5.7 million, with no attributable goodwill write-off. The net loss related to
the sale or closure of certain non-core businesses. The net loss on sale or
closure of operations in the first half of 2001 was £4.5 million, including
goodwill written-off of £15.4 million, mainly attributable to the sale of the
Magnesia Chemicals business.
Net profit on sale of fixed assets
In the first half of 2002, the Group's net profit on the sale of fixed assets
was £0.3 million, which included a gain of £2.3 million arising on the sale of
the land and buildings of four of the Group's sites, offset by an increase of
£2.0 million in the provision against the carrying costs of the Company's ESOP
shares. The Group's net profit in the first half of 2001 of £12.7 million arose
on the sale of two of the Group's properties. At the time of the sale of the
sites in both 2001 and 2002, the Group entered into operating leaseback
arrangements for two of the sites sold in each period.
Net interest expense
Net interest expense increased in the first half of 2002 to £29.5 million from
£25.7 million in the first half of 2001, primarily as a result of higher average
interest rates and a £1.8 million increase in the amortisation of financing
fees.
Profit/(loss) before taxation
The Group loss before taxation amounted to £44.5 million for the first half of
2002, compared with a profit of £12.3 million in the first half of 2001. Group
loss before tax, exceptional items and goodwill amortisation was £11.9 million
in the first half of 2002, which compares with a profit of £30.9 million and a
loss of £24.2 million in the first and second halves of 2001, respectively.
Taxation on profit/(loss) on ordinary activities
As of 1 January 2002, the Company adopted Financial Reporting Standard 19,
'Deferred Taxation'. As explained in note 1 to the accompanying interim
financial statements, this change of accounting policy requires prior period
comparative figures to be restated. The impact of this prior period adjustment
is set out in the accompanying interim financial statements.
The Group had a net tax credit of £4.8 million in the first half of 2002.
Excluding a £1.2 million tax credit on net exceptional items, the tax credit on
the Group loss before taxation and goodwill amortisation amounted to £3.6
million. The Group's effective tax rate for the first half of 2002 was 30%,
based on an estimate for the full year and was unchanged from the first half of
2001, as restated.
Minority interests in Group profit
The interest of third party shareholders in the post-taxation results of the
Group represented a charge of £0.7 million in the first half of 2002, compared
with £0.8 million in the first half of 2001.
Dividends
No interim dividend has been declared for the first half 2002. This is
consistent with the dividend policy outlined in December 2001 in which the Board
stated that no cash dividends would be paid in 2002 or until certain financial
targets had been achieved. For the first half of 2001, an interim dividend of
4.5 pence per share was declared.
Group net (loss)/profit for the period
As a result of the above, the Group's net loss for the first half of 2002 was
£40.4 million compared with a net loss of £30.3 million in the first half of
2001, as restated.
Earnings per share
Headline earnings per share, that is before goodwill amortisation and all
exceptional items, amounted to a loss of 1.2 pence per share for the first half
of 2002, compared with 2.9 pence achieved in the first half of 2001. The average
number of shares in issue during the first half of 2002 was 723 million,
unchanged from the first half of 2001.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow statement
Cash flows from operating activities
In the first half of 2002, the Group's net cash inflow from operating activities
declined by £26.1 million to £52.9 million from £79.0 million in the first half
of 2001. The decrease experienced in the first half of 2002 was primarily
attributable to a £37.6 million decline in the Group's operating profit before
exceptional items, interest, taxation, depreciation and goodwill amortisation
('EBITDA') from £85.8 million in the first half of 2001 to £48.2 million in the
first half of 2002. The overall decline in cash flows from operating activities
in the first half of 2002 was, however, mitigated by a reduction in working
capital which, at £13.2 million in the first half of 2002, was £7.9 million
higher than that in the first half of 2001. This improved working capital
position resulted primarily from cost-saving and cash conservation initiatives
implemented throughout the Group, which resulted in reduced levels of
inventories and enhanced collections of receivables. Cash outflows for
rationalisation costs were £10.4 million in the first half of 2002, compared
with £12.1 million in the first half of 2001.
Dividends from joint ventures
The Group received £2.1 million in dividends from joint ventures in the first
half of 2002 compared with £5.0 million in the first half of 2001. The higher
amount received in the first half of 2001 resulted from increased dividends paid
by the Group's principal Japanese joint venture.
Returns on investment and servicing of finance
The cash outflow for interest paid in the first half of 2002 was £29.8 million
which compares with £28.4 million in the same period in 2001. Cash inflow from
the close-out of interest rate swaps in the first half of each year amounted to
£10.3 million in 2002 and £26.0 million in 2001.
Taxation
The £12.3 million decrease in tax payments, from £12.0 million outflow in the
first half of 2001 to £0.3 million inflow in the first half of 2002 was largely
the result of the lower profits experienced in 2001.
Capital expenditure
Payments to acquire fixed assets during the first half of 2002 decreased by 56%
to £12.6 million from £28.5 million in the first half of 2001, principally
attributable to reduced requirements due to lower activity levels. Capital
expenditure payments also reduced to 0.4 times depreciation in comparison with
0.8 times in the first half of 2001. Receipts from the disposal of fixed assets,
including those in respect of the sale and leasebacks of properties, were £8.0
million in the first half of 2002, down from £20.9 million in the first half of
2001.
Dividends paid
No dividends were paid in the first six months of 2002, whereas the final
dividend of 5.5 pence per share for 2000, amounting to £39.8 million, was paid
in June 2001.
Free cash flow
As a result of the above, free cash flow before and after dividends was £31.5
million in the first half of 2002 which compares with £62.5 million before
dividends and £22.7 million after dividends in the first half of 2001. In the
second half of 2001, free cash inflow before dividends was £10.8 million and a
net cash outflow of £21.7 million after dividends.
Acquisitions and disposals
In the first half of 2002, net cash outflow from acquisitions and disposals was
£15.7 million compared with a net cash inflow of £12.5 million in the first half
of 2001. For the first half of 2002, cash inflows from the disposal of a number
of small non-core businesses were £1.4 million, more than offset by certain
small acquisitions and a prior period acquisition earnout payment totalling
£10.8 million and £6.3 million of costs relating to prior period business
disposals.
In the first half of 2001, cash inflows of £24.8 million primarily relating to
the sale of the Group's Magnesia Chemicals businesses were offset partially by
acquisition costs of £9.6 million and £2.7 million of costs relating to prior
period business disposals.
Net cash inflow/(outflow) before and after financing
The aggregate effect of the above resulted in net cash inflow before financing
for the first half of 2002 of £15.8 million compared with £35.2 million in the
first half of 2001 and £1.0 million in the second half of 2001. The increase in
cash balances in the first half of 2002 amounted to £5.0 million compared with
an increase of £41.4 million in the first half of 2001. After taking account of
cash inflows from the issue of equity of £1.7 million in the first half of 2001
and nil in the first half of 2002, together with refinancing costs paid of £8.1
million in the first half of 2002 (2001: nil), the resulting net decrease in
debt was £2.7 million in the first half of 2002 compared with a net increase of
£4.5 million in the first half of 2001.
Group borrowings
The following table presents the Group's net debt position at the end of June
2002, December 2001 and June 2001, respectively:
At 30 June At 31 December At 30 June
Net debt position 2002 2001 2001
£m £m £m
Amounts falling due after more than one year:
US Private Placement loan notes 380.0 391.6 403.1
Convertible Bonds 80.0 80.0 80.0
Committed bank facilities 297.0 292.6 326.0
Amounts falling due within one year:
Other loans and overdrafts 20.7 9.0 47.6
Cash (28.6) (23.6) (81.5)
Net debt 749.1 749.6 775.2
Group financing and consignment arrangements
The Group's current long term borrowing requirements have been satisfied by $570
million (£380 million) of long term loan notes due for repayment between 2005
and 2012 and £80 million of convertible bonds that are due for repayment in
November 2004. The Group's near term borrowing requirements have been met by a
committed syndicated bank facility of £450 million, which reduces to £400
million on 1 April 2003 and to £300 million on 1 September 2003, with a final
maturity date of 30 September 2004. As at 30 June 2002, £297 million had been
drawn down against the syndicated bank facility, leaving £153 million available
for future drawings. Of the drawn amount, all was secured against certain assets
of some of the Group's subsidiaries. The balance of the Group's borrowing
requirements are satisfied by uncommitted facilities, including overdraft and
money market facilities, which are used primarily to support the Group's cash
management structures. As at 30 June 2002, the average interest payable on all
the Group's borrowings, excluding the amortisation of fees, was approximately
6.5%.
Cookson has various precious metals consignment arrangements with precious
metals consignors. As the consignors retain title and the associated risks and
benefits of ownership under these arrangements, the physical metal so held is
not recorded on the Group's balance sheet. Similarly, the obligations in respect
of the consigned metal are not recorded as a liability on the Group's balance
sheet. At 30 June 2002, the Group held precious metals on consignment terms with
a total value of £273 million (30 June 2001: £298 million).
Having regard to bank and other facilities available to the Group, the Board is
of the opinion that the Group has sufficient working capital for its present
requirements, that is for at least the next twelve months from the date of this
Interim Report.
CURRENCY
The principal exchange rates used for the period were as follows:
Six months ended 30 June
2002 2001 2002 2001
Average rate Period-end rate
US dollar ($ per £) 1.44 1.44 1.50 1.41
Euro (€ per £) 1.61 1.60 1.55 1.66
Singapore dollar ($ per £) 2.62 2.57 2.66 2.58
Japanese yen (Y per £) 187.15 171.84 182.79 175.93
For the first half of 2002, movements in average currency translation rates
resulted in a £10 million adverse impact on turnover and a £1 million adverse
impact on operating profit.
BOARD CHANGES
On 1 January 2002, Barry Perry, Chairman and CEO of Engelhard Corporation, was
appointed as a non-executive Director of the Company.
CURRENT OUTLOOK
The Board believes Cookson is well positioned in its major markets. During the
first half of 2002 the Group witnessed an improving trend in activity with
turnover for the second quarter of 2002 8% higher than the first quarter of
2002. Furthermore, the rigorous action taken early in 2001 and which has
continued into 2002, both to align the Group's cost base with the reduced levels
of demand being experienced and to conserve cash, have mitigated the impact on
profitability of the downturn in the Group's major markets.
Since the end of the first half of 2002, trading has been in line with the
Company's expectations. Although the timing of a sustained recovery in the
electronics industry remains unclear and activity in the third quarter is
traditionally quieter than in the second quarter, Cookson expects to be able to
leverage the benefits of its operational gearing to take advantage of an upturn
when it occurs.
FOR FURTHER INFORMATION PLEASE CONTACT:
Stephen Howard
Group Chief Executive
Tel: 020 7766 4500
Fax: 020 7747 6603
E-mail: SLH@cookson.co.uk
Dennis Millard
Group Finance Director
Tel: 020 7766 4500
Fax: 020 7747 6603
E-mail: DHM@cookson.co.uk
Media Enquiries: Citigate Dewe Rogerson
Tel: 020 7638 9571
Jonathan Clare
Martin Jackson
Copies of Cookson's 2002 Interim Report are being posted to the shareholders of
the Company on 19 July 2002 and will be available on the Company's website and
at the Registered Office of the Company from that date.
Cookson Group plc,
The Adelphi,
1-11 John Adam Street,
London WC2N 6HJ
www.cooksongroup.co.uk
All the financial information in this announcement is unaudited. Certain
statements made in this announcement are forward looking statements. Such
statements are based on current expectations and, by their nature, are subject
to a number of risks and uncertainties that could cause actual results and
performance to differ materially from any expected future results or
performance, expressed or implied by the forward looking statement. The
information and opinions contained in this announcement are subject to change
without notice and Cookson assumes no responsibility or obligation to update
publicly or revise any of the forward looking statements contained herein
Consolidated Group Profit and Loss Account
for the six months ended 30 June 2002
Before Before
exceptional Exceptional exceptional Exceptional
items and items and items and items and
goodwill goodwill Half goodwill goodwill Half year Full year
year
amortisation amortisation 2002 amortisation amortisation 2001 2001
as as
restated restated
note (note 1) (note 1)
£m £m £m £m £m £m £m
Turnover 2
Continuing operations 903.0 - 903.0 1,096.8 - 1,096.8 2,012.3
Discontinued operations - - - 57.9 - 57.9 87.1
Total turnover 903.0 - 903.0 1,154.7 - 1,154.7 2,099.4
Share of joint ventures (32.4) - (32.4) (48.1) - (48.1) (83.0)
Turnover of Group 870.6 - 870.6 1,106.6 - 1,106.6 2,016.4
subsidiaries
Operating profit/(loss) 2
Continuing operations, 16.7 - 16.7 50.3 - 50.3 53.1
before goodwill amortisation
Operating exceptional items 2, 3 - (8.0) (8.0) - (7.4) (7.4) (31.2)
Goodwill amortisation 2 - (19.2) (19.2) - (19.4) (19.4) (38.6)
Continuing operations 16.7 (27.2) (10.5) 50.3 (26.8) 23.5 (16.7)
Discontinued operations 2 - - - 2.5 - 2.5 2.6
Group operating profit/ 16.7 (27.2) (10.5) 52.8 (26.8) 26.0 (14.1)
(loss)
Share of joint ventures 0.9 - 0.9 3.8 - 3.8 3.4
Total operating profit/ 17.6 (27.2) (9.6) 56.6 (26.8) 29.8 (10.7)
(loss)
Net loss on sale or closure 4
of operations
(Loss)/profit before - (5.7) (5.7) - 10.9 10.9 3.8
goodwill written-back/off
Goodwill written-back - - - - (15.4) (15.4) (63.2)
- (5.7) (5.7) - (4.5) (4.5) (59.4)
Net profit on sale of fixed 5 - 0.3 0.3 - 12.7 12.7 13.3
assets
Profit/(loss) on ordinary 17.6 (32.6) (15.0) 56.6 (18.6) 38.0 (56.8)
activities before interest
Net Interest 6 (29.5) - (29.5) (25.7) - (25.7) (52.4)
(Loss)/profit on ordinary (11.9) (32.6) (44.5) 30.9 (18.6) 12.3 (109.2)
activities before taxation
Taxation on profit/(loss) on 3.6 1.2 4.8 (9.6) 0.3 (9.3) 4.6
ordinary activities
(Loss)/profit on ordinary (8.3) (31.4) (39.7) 21.3 (18.3) 3.0 (104.6)
activities after taxation
Minority interests (0.7) - (0.7) (0.8) - (0.8) (1.5)
(Loss)/profit for the (9.0) (31.4) (40.4) 20.5 (18.3) 2.2 (106.1)
financial period
Dividends - - - (32.5) - (32.5) (32.3)
Net loss transferred to (9.0) (31.4) (40.4) (12.0) (18.3) (30.3) (138.4)
reserves
Earnings per share: 7
Basic, before all
exceptional items and
goodwill
amortisation (1.2)p 2.9p 0.6p
Basic (5.6)p 0.3p (14.7)p
Diluted (5.6)p 0.3p (14.7)p
Consolidated Statement of Group Cash Flows
for the six months ended 30 June 2002
Half year Half year Full year
2002 2001 2001
note £m £m £m
Reconciliation of operating (loss)/profit to net cash inflow
from operating activities
Group operating profit before exceptional items, but after goodwill (2.5) 33.4 17.1
amortistion
Depreciation 31.5 33.0 62.7
Goodwill amortisation 19.2 19.4 38.6
Decrease in stocks 16.4 28.6 94.9
(Increase)/decrease in debtors (8.8) 69.8 124.7
Increase/(decrease) in creditors 5.6 (93.1) (150.1)
Net decrease in working capital 13.2 5.3 69.5
Other movements 1.9 - (1.3)
Cash payments in respect of exceptional rationalisation costs 3 (10.4) (12.1) (32.2)
Net cash inflow from operating activities 52.9 79.0 154.4
Cash flow statement
Net cash inflow from operating activities 52.9 79.0 154.4
Dividends from joint ventures 2.1 5.0 6.2
Returns on investment and servicing of finance
Interest paid (29.8) (28.4) (62.8)
Interest received 0.3 0.5 3.3
Proceeds from close-out of interest rate swaps 6 10.3 26.0 28.2
(19.2) (1.9) (31.3)
Taxation 0.3 (12.0) (21.6)
Capital expenditure
Payments to acquire fixed assets (12.6) (28.5) (68.4)
Receipts from disposal of fixed assets 5 8.0 20.9 34.0
(4.6) (7.6) (34.4)
Dividends paid - (39.8) (72.3)
Free cash flow 31.5 22.7 1.0
Acquisitions and disposals
Net proceeds from disposal of subsidiaries and joint ventures 1.4 24.8 60.1
Consideration for acquisition of subsidiaries and joint ventures (10.8) (9.6) (19.5)
Other, including additional costs for prior year disposals (6.3) (2.7) (5.4)
(15.7) 12.5 35.2
Net cash inflow before financing 15.8 35.2 36.2
Financing
Issue of shares - 1.7 1.7
Refinancing costs paid (8.1) - -
(Decrease)/increase in debt (2.7) 4.5 (27.7)
Increase in cash during the period 5.0 41.4 10.2
Consolidated Group Balance Sheet
as at 30 June 2002
At 30 June At 31 Dec At 30 June
2002 2001 2001
as restated as restated
note (note 1) (note 1)
£m £m £m
Fixed assets
Goodwill 8 645.4 664.9 694.0
Tangible assets 453.8 487.2 535.2
Investment in joint ventures:
Share of gross assets 50.9 49.9 55.8
Share of gross liabilities (18.0) (16.4) (18.3)
32.9 33.5 37.5
Other investments 42.7 46.3 53.2
Total investments 9 75.6 79.8 90.7
Total fixed assets 1,174.8 1,231.9 1,319.9
Current assets
Stocks 214.6 230.7 312.8
Debtors : amounts falling due within one year 10 388.9 379.8 442.1
: amounts falling due after more than one year 10 117.6 116.7 79.4
Cash 28.6 23.6 81.5
Total current assets 749.7 750.8 915.8
Creditors: amounts falling due within one year
Borrowings (29.3) (17.0) (47.6)
Other creditors (413.3) (416.6) (460.9)
Total current liabilities (442.6) (433.6) (508.5)
Net current assets 307.1 317.2 407.3
Total assets less current liabilities 1,481.9 1,549.1 1,727.2
Creditors: amounts falling due after more than one year
Convertible bond (80.0) (80.0) (80.0)
Borrowings (668.4) (676.2) (729.1)
Other creditors (92.8) (91.6) (132.0)
Provisions for liabilities and charges (65.8) (77.4) (88.4)
574.9 623.9 697.7
Equity capital and reserves
Called up share capital 363.8 363.8 363.8
Share premium account 377.0 377.0 377.0
Profit and loss account 11 (382.2) (332.8) (257.6)
Other reserves 205.9 205.9 205.9
Total shareholders' funds 564.5 613.9 689.1
Minority interests 10.4 10.0 8.6
574.9 623.9 697.7
Consolidated Statement of Total Group Recognised Gains and Losses
for the six months ended 30 June 2002
Half year Half year Full year
2002 2001 2001
as restated as restated
(note 1) (note 1)
£m £m £m
(Loss)/profit for the period (40.4) 2.2 (107.6)
Exchange adjustments, including £nil charge (2001: half year £nil; full
year £3.9m)
Relating to UK taxation (9.0) 16.8 1.9
Total net recognised gains relating to the period (49.4) 19.0 (105.7)
Effect of prior period adjustment:
Total net recognised losses relating to the period (as above) (49.4)
Prior period adjustment (note 1) 63.3
Total net gains recognised since the last annual accounts 13.9
Consolidated Reconciliation of Movements in Group Shareholders' Funds
for the six months ended 30 June 2002
Half Half year Full year
year 2001 2001
2002 as restated as restated
(note 1) (note 1)
£m £m £m
Shareholders' funds as at 1 January:
As previously stated 550.6 639.1 639.1
Prior period adjustment (note 1) 63.3 61.8 61.8
As restated 613.9 700.9 700.9
Total net recognised gains for the period (see above) (49.4) 19.0 (105.7)
Dividends - (32.5) (32.3)
New share capital issued - 1.7 1.7
Goodwill in respect of discontinued operations - - 47.8
Net reduction to shareholders' funds (49.4) (11.8) (88.5)
Shareholders' funds at end of period 564.5 689.1 612.4
Consolidated Reconciliation of Net Cash Flow to Movement in Net Debt
for the six months ended 30 June 2002
Half year Half year Full year
2002 2001 2001
£m £m £m
Increase in cash during the period 5.0 41.4 10.2
Cash flow from movement in debt 2.7 (4.5) 27.7
Change in net debt resulting from cash flows 7.7 36.9 37.9
Accrued refinancing costs and issue costs amortised (2.1) (0.6) 7.2
Exchange adjustments (5.1) (17.5) (0.7)
Movement in net debt during the period 0.5 18.8 44.4
Net debt at 1 January (749.6) (794.0) (794.0)
Net debt at end of period (749.1) (775.2) (749.6)
Notes to the accounts
1 Prior period adjustment
The prior period adjustment represents the effect of a change in the accounting
policy for deferred taxation following the Company's adoption, for 2002
reporting, of Financial Reporting Statement ('FRS') 19, 'Deferred Taxation'.
Up to and including 31 December 2001, in accordance with Statement of Standard
Accounting Practice 15, provision was made, on the liability basis, for taxation
deferred due to the excess of capital allowances over depreciation and other
timing differences, only to the extent that such tax may become payable in the
foreseeable future. Deferred tax assets were recognised to the extent they were
expected to reverse without replacement in the foreseeable future. As a
consequence of the adoption of FRS 19, provision for deferred tax liabilities is
now made on all timing differences which exist at the balance sheet date and
deferred tax assets are recognised to the extent that they are considered to be
recoverable.
The adoption of FRS 19 gives rise to a cumulative prior year adjustment to
opening reserves of £63.3m credit in the 2002 accounts, of which £1.5m relates
to the full year 2001 (2001 half year: £nil) and the balance of £61.8m relates
to 2000 and prior periods. The comparative figures for 2001 have been restated
in accordance with the new policy, resulting in no change to the aggregate tax
charge for the first half of 2001 and a £1.5m increase in the tax credit for the
full year 2001. As a result of the half year taxation charge being based on an
estimate of the full year's effective tax rate, it is not practicable to give
the actual effect on the current period had the new policy not been adopted in
2002.
2 Segmental analyses
In each of the following analyses, the costs of the Group's corporate activities
have been allocated primarily according to the relative sales contribution of
each continuing operating segment to the total. Inter-segment sales are not
material in relation to total Group turnover, whether analysed by division or by
geographic location of operations. The Group's share of results of joint
ventures are not material in relation to the total amount for the Group and are
included in the segments analysed below. Of the results of continuing
operations, the contribution from acquisitions to turnover and operating profit
in 2002 and 2001 was not material.
The results reported in 2001 as discontinued operations relate primarily to
those of the Group's Plastic Mouldings and Magnesia Chemicals businesses, the
latter having been disposed in the first half of 2001.
Half year 2002 Half year 2001 Full year 2001
Operating Operating Operating
Turnover (loss)/profit Turnover profit Turnover (loss)/
profit
By Division £m £m £m £m £m £m
Electronics 357.6 (11.7) 496.6 10.9 855.6 (14.3)
Ceramics 344.9 18.6 381.5 26.6 731.1 40.5
Precious Metals 200.5 10.7 218.7 16.6 425.6 30.3
903.0 17.6 1,096.8 54.1 2,012.3 56.5
Goodwill amortisation - (19.2) - (19.4) - (38.6)
Exceptional items - (8.0) - (7.4) - (31.2)
Continuing operations 903.0 (9.6) 1,096.8 27.3 2,012.3 (13.3)
Discontinued operations - - 57.9 2.5 87.1 2.6
Total Group 903.0 (9.6) 1,154.7 29.8 2,099.4 (10.7)
Of the total exceptional items of £8.0m (2001: half year £7.4m; full year
£31.2m), £5.3m related to Electronics (2001: half year £6.4m; full year £25.1m),
£2.2m to Ceramics (2001: half year £1.0m; full year £6.1m) and £0.5m to Precious
Metals (2001: half year £nil; full year £nil).
Of the goodwill amortisation charge of £19.2m (2001: half year £19.4m; full year
£38.6m), £10.0m related to Electronics (2001: half year £10.1m; full year
£20.3m), £7.8m to Ceramics (2001: half year £7.8m full year £15.4m) and £1.4m to
Precious Metals (2001: half year £1.5m; full year £2.9m).
Half year 2002 Half year 2001 Full year 2001
By location By By location By By location By
of Group of Group of Group
operations operations operations
customer customer customer
location location location
Operating Operating Operating
Geographical Turnover (loss)/ Turnover Turnover profit Turnover Turnover (loss)/ Turnover
profit profit
£m £m £m £m £m £m £m £m £m
United Kingdom 88.7 (0.7) 73.6 126.3 0.5 89.7 214.0 (3.9) 163.0
Continental 230.4 8.3 232.1 286.4 16.3 301.1 533.1 21.5 552.0
Europe
USA 375.8 (15.1) 348.3 474.2 10.4 436.5 865.3 (9.0) 767.5
Asia-Pacific 138.8 17.7 161.0 146.4 19.1 175.0 276.6 36.8 338.4
Rest of the World 69.3 7.4 88.0 63.5 7.8 94.5 123.3 11.1 191.4
903.0 17.6 903.0 1,096.8 54.1 1,096.8 2,012.3 56.5 2,012.3
Goodwill - (19.2) - - (19.4) - - (38.6) -
amortisation
Exceptional items - (8.0) - - (7.4) - - (31.2) -
Continuing 903.0 (9.6) 903.0 1,096.8 27.3 1,096.8 2,012.3 (13.3) 2,012.3
operations
Discontinued - - - 57.9 2.5 57.9 87.1 2.6 87.1
operations
Total Group 903.0 (9.6) 903.0 1,154.7 29.8 1,154.7 2,099.4 (10.7) 2,099.4
2 Segmental analyses (continued)
Of the exceptional items of £8.0m (2001: half year £7.4m; full year £31.2m),
£7.5m (2001: half year £6.9m; full year £22.8m) was in the USA, £0.5m (2001:
half year £nil; full year £1.3m) in Continental Europe, £nil (2001: half year
£nil; full year £1.4m) in the Rest of the World and £nil (2001: half year £0.5m;
full year £5.7m) in the UK.
Of the goodwill amortisation charge of £19.2m (2001: half year £19.4m; full year
£38.6m), £11.5m (2001: half year £10.0m; full year £23.2m) was in the USA, £2.1m
(2001: half year £3.4m; full year £4.3m) in Continental Europe, £3.1m (2001:
half year £4.0m; full year £6.3m) in Asia-Pacific, £0.7m (2001: half year £0.5m;
full year £1.2m) in the Rest of the World and £1.8m (2001: half year £1.5m; full
year £3.6m) in the UK.
The majority of discontinued operations were located in the USA.
3 Operating exceptional Items
The charge of £31.2m for the full year 2001 related to the implementation of a
programme of initiatives aimed at ensuring that the cost base of each of the
Group's major businesses was aligned with the prevailing and near term market
conditions which it faced. The initiatives implemented included redundancy
programmes, the consolidation of facilities, plant closures, the streamlining of
manufacturing processes and the rationalisation of product lines. Of the 2001
exceptional charge, £11.0m represents asset write-downs, the majority of which,
together with the plant closures, were in the USA. The charge of £7.4m for the
half year 2001 represented the costs of those parts of the programme which had
become fully committed at that date. The charge of £8.0m in 2002 represents the
costs of those parts of the Group-wide 2001 programme of initiatives which
became committed during the current period, together with the cost of additional
initiatives implemented within the Electronics division further to reduce its
cost base.
The above-mentioned initiatives, together with acquisition integration
programmes for Enthone and Premier, have resulted in headcount reductions since
1 January 2001 of some 4,000 by the end of June 2002. Total cash spend in the
first half of 2002 in respect of operating exceptional items was £10.4m, leaving
aggregate provisions made but unspent in respect of the above operating
exceptional items of £14.7m as at 30 June 2002.
4 Net loss on sale or closure of operations
The net loss on sale or closure of operations in the first half of 2002 was
£5.7m, with no attributable goodwill write-off. The net loss related to the sale
or closure of certain non-core businesses. The net loss on sale or closure of
operations in the first half of 2001 was £4.5m, after goodwill written-off of
£15.4m, attributable to the sale of the Magnesia Chemicals business.
5 Net profit on sale of fixed assets
The net profit on sale of fixed assets of £0.3m in 2002 includes a gain of £2.3m
arising on the sale of the land and buildings of three of the Group's sites for
which the total consideration received was £8.0m. At the time of the disposal,
the Group entered into operating leaseback arrangements for two of these sites.
Also included in the net profit on sale of fixed assets for 2002 is a provision
of £2.0m against the carrying cost of the Company's ESOP shares. The net profit
arising in the first half of 2001 of £12.7m arose on the sale of two of the
Group's properties for cash proceeds of £20.9m, each of these sites being the
subject of operating leaseback arrangements.
6 Interest
Included in the 2002 net interest charge of £29.5m (2001: £25.7m) was £2.1m
(2001: £0.3m) of charge in respect of the amortisation of debt fees.
As part of an ongoing hedging programme to optimise the mix of fixed and
floating rate debt and to maintain stable and predictable effective interest
rates, $225m (2001: $400m) of interest rate swaps were closed out during the
period. This generated £10.3m (2001: £26.0m) in cash proceeds and accordingly
net interest payments were only £19.2m in the first half (2001: £1.9m).
7 Earnings per share (EPS)
Basic EPS are calculated using a weighted average of 723m (2001: half year 723m;
full year 723m) ordinary shares in issue during the period. Diluted EPS are
calculated assuming conversion of outstanding dilutive share options. These
adjustments give rise to an increase in average ordinary shares of 3m (2001:
half year 2m; full year 1m). On the face of the Group profit and loss account,
EPS are shown both before and after goodwill amortisation and all exceptional
items. The number of shares in issue as at 30 June 2002 was 728m (2001: 728m).
The Directors believe that the calculation of EPS excluding goodwill
amortisation and all exceptional items, together with the associated tax charge
or credit, gives the most appropriate measure of the underlying earning capacity
of the Group. This calculation is based on a loss of £40.4m (2001: half year
£2.2m profit; full year £106.1m loss), to which goodwill amortisation and
exceptional items totalling £31.4m, net of tax (2001: half year £18.3m; full
year £110.5m) are added back. Prior period figures have been restated, as
appropriate, to take into account the impact of the change of accounting policy
referred to in note 1 above.
8 Goodwill
Goodwill arising in 2002 amounted to £6.8m (2001: half year £4.1m; full year
£1.8m) 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 £433.6m.
9 Investments
Investments include £32.9m (31 December 2001: £33.5m; 30 June 2001: £37.5m) in
respect of joint ventures and £42.7m (31 December 2001: £46.3m; 30 June 2001:
£53.2m) in respect of other investments, £28.2m of which comprise the Group's
investment in a revenue-sharing arrangement with Electric Lightwave, Inc.
Investments in joint ventures consist of the Group's share of gross assets of
£50.9m (31 December 2001: £49.9m; 30 June 2001: £55.8m) less the Group's share
of gross liabilities of £18.0m (31 December 2001: £16.4m; 30 June 2001: £18.3m).
10 Debtors
Included in debtors at 30 June 2002 were deferred tax assets of £107.4m. As
required as a consequence of the Company's adoption of FRS 19 during the period,
prior period comparatives have been restated, the deferred tax assets at 31
December 2001 and 30 June 2001 being £107.4m and £86.5m, respectively.
11 Profit and loss account
At 30 June At 30 June At 31 December
2002 2001 2001
as restated as restated
(note1) (note1)
£m £m £m
Balance at beginning of period:
As previously reported (396.1) (305.9) (305.9)
Prior period adjustment (note 1) 63.3 61.8 61.8
As restated (332.8) (244.1) (244.1)
Loss for the financial period (40.4) (30.3) (138.4)
Exchange adjustments (9.0) 16.8 1.9
Goodwill written-back on disposals _ _ 47.8
Balance at end of period (382.2) (257.6) (332.8)
12 Financial Information
The interim financial statements have been prepared on the basis of the
accounting policies adopted in the Group's audited statutory accounts for 2001,
except as explained in note 1 above in relation to the change in accounting
policy resulting from the Company's adoption of FRS 19 with effect from 1
January 2002. The interim accounts were approved by the Board of Directors on 19
July 2002. The financial information for the six month periods ended 30 June
2002 and 30 June 2001 is unaudited but has been reviewed by the Company's
auditor. The comparative figures for the financial year ended 31 December 2001
are not the Company's statutory accounts for that financial year. Those accounts
have been reported on by the Company's auditor and delivered to the Registrar of
Companies. The report of the auditor was unqualified and did not contain a
statement 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.
13 Forward Looking Statements
This report contains certain forward looking statements regarding the Group's
financial condition, results of operations, cash flows, dividends, financing
plans, business strategies, operating efficiencies or synergies, budgets,
capital and other expenditures, competitive positions, growth opportunities for
existing products, plans and objectives of management and other matters.
Statements in this document that are not historical facts are hereby identified
as 'forward looking statements' for the purpose of the safe harbour provided by
Section 21E of the Exchange Act and Section 27A of the Securities Act. Such
forward looking statements, including, without limitation, those relating to the
future business prospects, revenues, working capital, liquidity, capital needs,
interest costs and income, in each case relating to Cookson, wherever they occur
in this document, are necessarily based on assumptions reflecting the views of
Cookson and involve a number of known and unknown risks, uncertainties and other
factors that could cause actual results, performance or achievements to differ
materially from those expressed or implied by the forward looking statements.
Such forward looking statements should, therefore, be considered in light of
various important factors. Important factors that could cause actual results to
differ materially from estimates or projections contained in the forward looking
statements include without limitation: economic and business cycles; the terms
and conditions of Cookson's financing arrangements; foreign currency rate
fluctuations; competition in Cookson's principal markets; acquisitions or
disposals of businesses or assets; and trends in Cookson's principal industries.
The foregoing list of important factors is not exhaustive. When relying on
forward looking statements, careful consideration should be given to the
foregoing factors and other uncertainties and events, as well as factors
described in documents the Company files with the UK and US regulators from time
to time including its annual reports and accounts.
Such forward looking statements speak only as of the date on which they are
made. Except as required by the Rules of the UK Listing Authority and the London
Stock Exchange and applicable law, Cookson undertakes no obligation to update
publicly or revise any forward looking statements, whether as a result of new
information, future events or otherwise. In light of these risks, uncertainties
and assumptions, the forward looking events discussed in this report might not
occur.
Independent Review Report by KPMG Audit Plc to Cookson Group plc
Introduction
We have been instructed by the Company to review the financial information set
out on pages 9 to 15 and we have read the other information contained in the
Interim Report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
Directors' responsibilities
The Interim Report, including the financial information contained therein, is
the responsibility of, and has been approved by, the Directors. The Directors
are responsible for preparing the Interim Report in accordance with the Listing
Rules of the UK Listing Authority which require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where they are to be
changed in the next annual accounts in which case any changes, and the reasons
for them, are to be disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/
4: Review of interim financial information issued by the Auditing Practices
Board for use in the UK. A review consists principally of making enquiries of
Group management and applying analytical procedures to the financial information
and underlying financial data and, based thereon, assessing whether the
accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review is substantially less in scope than an audit
performed in accordance with Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly we do not express an audit opinion
on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2002.
KPMG Audit Plc, Chartered Accountants
19 July 2002, London
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 1 day ago The Renewables Infrastructure Group Limited
- 1 day ago The Renewables Infrastructure Group Limited
- 1 day ago Smurfit Westrock (DI)
- 1 day ago Menhaden Resource Efficiency
- 1 day ago BP