Interim Management Statement

RNS Number : 9937V

Cookson Group PLC

11 November 2010

 



11 November 2010

COOKSON GROUP PLC ("Cookson" or "the Group")

INTERIM MANAGEMENT STATEMENT

Cookson Group plc, a leading materials science company, releases the following Interim Management Statement covering current trading, its financial position and outlook.  This statement covers the period from 1 July 2010 to 10 November 2010.  

Overview and Outlook

End-market conditions, and the Group's trading performance for the period, have been consistent with those anticipated in the outlook statement given in the Group's half year results announcement on 4 August 2010.  Management's expectation for the Group's overall full year performance therefore remains unchanged, with performance for the second half of the year somewhat ahead of that in the first half. 

Based on this current expectation, and on its current view of the likely trading environment in 2011, the Board anticipates that it will recommend a final dividend in respect of full year 2010 to be announced at the time of the Preliminary Results in March 2011.

Ceramics

The Ceramics division is the world leader in the supply of advanced consumable products to the global steel production and foundry casting industries and a leading supplier of speciality products to the solar and glass industries.

As expected, global steel production in the third quarter of the year declined by some 4% from the average monthly run rate in the first half reflecting normal seasonality and some cut-backs by steel producers to support higher steel prices.  Similar global steel production levels are expected in the fourth quarter with the current slow down in China being offset by increases in other regions.  Trading in the Ceramics division's steel-related product lines (namely Steel Flow Control and Linings) have reflected these trends.  The projects to increase our flow control production capacities in China and India, both of which remain very important growth markets for the steel industry, are proceeding as planned for completion this year.

On 4 October, the World Steel Association ("WSA") issued its forecast for apparent steel use* for the full year 2011 which anticipates global growth of 5.3%, with the world excluding China growing 6.8% and China growing 3.5%.

The recovering volume trends in the foundry castings market noted in the half year results announcement have continued.  News flow from the ultimate end-markets for foundry castings, such as the heavy truck, higher-end automobile, and construction, mining and agricultural equipment industries, remains encouraging.  The performance of the division's Foundry product line has improved accordingly in the second half of 2010 to date, with potential for further improvement through 2011.

The division's fourth and smallest product line, Fused Silica, is also experiencing improved conditions in its solar panel and glass production end-markets.

The division's overall performance in the second half of 2010 is expected to be slightly ahead of the first half.

* Apparent steel use reflects the deliveries of steel to the marketplace from the domestic steel producers as well as from importers. This differs from real steel use, which takes into account steel delivered to or drawn from inventories.

Electronics

The Electronics division is a leading supplier of speciality chemicals and assembly materials used principally in the manufacture of electronic equipment (accounting for approximately three-quarters of the division's revenue), and in the automotive and industrial markets (accounting for the remaining one-quarter of revenue).

In line with normal seasonal trends, the global electronic equipment production market has experienced a strong third quarter.  As a result of this improvement in demand, together with the continuing market penetration of new, higher margin products, the Electronics division's second half performance in 2010 is expected to be well ahead of that in the first half.

Precious Metals

The Precious Metals division supplies fabricated precious metals to the jewellery industry in the US, UK, France and Spain and also has significant precious metals refining operations in Europe.

End-market trends experienced in the first half of the year have continued.  Weakness in retail markets is being offset by sales of coin blanks to the US Mint and high levels of precious metals reclaim business in Europe.  The division is expected to deliver a similar performance in the second half of the year to that in the first half.

Financial Position

Net debt is expected to reduce over the second half of the year from the £405 million level at 30 June 2010 in line with previous guidance.  The Group has very substantial liquidity headroom within its committed debt facilities, which total approximately £800 million.  The principal maturities for these facilities are in late 2012.

Dividend

Based on the current expectation for full year performance, and on its current view of the likely trading environment in 2011, the Board anticipates that it will recommend a final dividend in respect of 2010.  The appropriate level of any such dividend will be determined by the Board at the time of the Preliminary Results announcement in March 2011.

Conference call

Nick Salmon (Chief Executive) and Mike Butterworth (Group Finance Director) will be hosting a conference call for analysts and investors at 9.00am (UK time) today (11 November).  To join the call, please use the dial in number below:

Conference call:

[phone] all participants

Confirmation code: 8686504

Please dial in 10 to 15 minutes prior to the scheduled start time.

A replay of the call will be available one hour after the event on the following number:

Replay (available until 24 November 2010):

[phone] non-US participants - confirmation code 8686504#

[phone] US participants - confirmation code 8686504#

Further announcements

Cookson's Preliminary Results for the year ending 31 December 2010 are expected to be announced on 1 March 2011.

-    Ends -

For further information please contact:

Shareholder/analyst enquiries:

Nick Salmon, Chief Executive                                    Cookson Group plc

Mike Butterworth, Group Finance Director                  Tel: + 44 (0)20 7822 0000

Media enquiries:

John Olsen                                                               MHP Communications

Anthony Arthur                                                         Tel: [phone]

About Cookson Group plc:

Cookson Group plc is a leading materials science company operating on a worldwide basis in Ceramics, Electronics and Precious Metals markets.

The Ceramics division is the world leader in the supply of advanced consumable refractory products and systems to the global steel and foundry industries and a leading supplier of speciality ceramic products to the glass and solar industries.  It is also a regional leader in the US, UK and Australia in the supply and installation of monolithic refractory linings.

The Electronics division is a leading supplier of advanced surface treatment and plating chemicals and assembly materials to the electronics, automotive, industrial and construction markets.

The Precious Metals division is a leading supplier of fabricated precious metals (primarily gold, silver and platinum) to the jewellery industry in the US, the UK, France and Spain, and also has significant precious metal recycling operations in Europe.

Forward looking statements

This announcement contains certain forward looking statements which may include reference to one or more of the following: 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 announcement that are not historical facts are hereby identified as "forward looking statements".  Such forward looking statements, including, without limitation, those relating to the future business prospects, revenue, working capital, liquidity, capital needs, interest costs and income, in each case relating to Cookson, wherever they occur in this announcement, 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 regulator 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 announcement might not occur.

Cookson Group plc, 165 Fleet Street, London EC4A 2AE

Registered in England and Wales No. 251977

www.cooksongroup.co.uk   

 

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