Trading Update

Cookson Group PLC
05 November 2002


5 November 2002

THIRD QUARTER TRADING UPDATE

Sales for Cookson's continuing activities were £445 million in the third quarter
of 2002, 1% lower than the same quarter last year. In spite of this, Group
operating profit for continuing activities of £13 million was £11 million higher
than the third quarter last year, with an improvement registered by each of the
three divisions. This underlines the benefits of the cost saving initiatives
implemented over the last eighteen months.

As indicated at the time of the Group's interim results on 19 July, activity in
the third quarter is traditionally quieter than the second quarter due to
routine summer holiday factory shutdowns by many of the Group's customers in the
USA and Europe. Consequently, activity levels in July and August were, as
expected, lower than those of the second quarter of 2002. Thereafter, Group
sales in September increased to the same average weekly sales as June 2002,
which were the highest since May 2001.

In the Electronics division, sales were £173 million, 3% lower than the same
quarter last year. Sales for September were higher than July and August and only
marginally lower than June 2002. The division's sales performance has been
consistent with industry trends, with demand in the USA and Europe remaining
depressed but the Asia-Pacific region relatively buoyant. Asia-Pacific currently
accounts for some 35% of the division's sales. Despite lower sales in the third
quarter, the division's operating profit improved by £8 million over the
corresponding period last year, mainly as a result of a markedly lower cost
base.

The Assembly Materials (Alpha-Fry) and PWB Chemicals (Enthone) sectors of the
Electronics division both continued to operate profitably with sales versus the
same quarter last year marginally below and unchanged respectively. The
Equipment sector (Speedline) operated at a loss in the third quarter, albeit
significantly smaller than last year, with sales marginally down on the third
quarter of 2001; nevertheless, the Equipment sector's order book improved during
the quarter. The PWB Laminates (Polyclad) sector also recorded a smaller
operating loss than the third quarter of 2001 on lower sales than last year.

It has been decided to optimise the installed production capacity of Polyclad's
US operations by amalgamating Polyclad's two US West Coast facilities. This
initiative will incorporate an investment of some £4 million in new equipment
which will ensure that total production capacity is maintained and will result
in better yields, enhanced production efficiencies and meaningful cost savings.
The total exceptional charge for this programme will be £6 million, primarily
related to asset write-downs. Most of the cash for the project will be outlaid
in 2003 as the amalgamation of the sites will be phased in over the next nine
months, thereby ensuring full continuity of supply to the division's customers.

                                                                   Continued/...

Sales in the Ceramics division in the third quarter of £176 million rose by 4%
over the same quarter last year and operating profit improved by 16%. Steel
production in the division's two major markets, USA and Europe, rose by 5% and
1% respectively over the same quarter last year. In the USA, the improvement in
production levels that became evident in the first quarter of this year has been
sustained and sales and profitability improved as a consequence. The European
steel markets were generally less robust with weakness in the UK and Germany
offset by gains elsewhere in the region. Steel output in Asia-Pacific remained
strong and the division's activities in this region benefited accordingly. In
the remaining sectors - Glass, Foundry and Industrial Products - market
conditions were stable and performance was sound.

The Jewellery Products sector of the Precious Metals division, which contributes
some 80% of the division's sales, saw third quarter sales of £79 million, down
4% on the previous year. The jewellery trade began to build inventory for the
seasonally stronger holiday period during the third quarter and, despite offtake
in Europe being down on last year, demand strengthened in the USA and profits
for the sector were in line with last year. For the Precision Products sector,
which is in the process of being disposed, sales of £17 million were marginally
higher than last year despite tough market conditions. For the division as a
whole, operating profit increased 7% over the same quarter last year.

The Company completed its rights issue on 29 August, raising a net £277 million
which was used to repay borrowings under the syndicated bank facility. The
Group's annual interest costs will reduce by some £17 million as a result of the
reduction in debt. During the third quarter, operating cash outflow was some £30
million which is both in line with expectations and normal for this time of the
year as working capital begins to build for the seasonally stronger fourth
quarter.

The outlook for the remainder of the year is that underlying trading conditions
are expected to remain essentially unchanged from those experienced in the
latter part of the third quarter. As a consequence, the Company expects
operating profit for the year to be within the range of market expectations.



Shareholder/analyst enquiries:

Stephen Howard, Group Chief Executive     020 7766 4500

Dennis Millard, Group Finance Director    020 7766 4500

Lisa Williams, IR Manager                 020 7766 4500

Media enquiries:

John Olsen, Hogarth Partnership           020 7357 9477



The Company will hold a conference call for analysts and shareholders at 9:00am
which will be broadcast live at www.cooksongroup.co.uk.


Note: All financial information is unaudited. All financial comparisons are at
constant exchange rates. This announcement contains forward-looking statements
about Cookson. Although the Company believes its expectations are based on
reasonable assumptions, any such statements may be influenced by factors that
could cause actual outcomes and results to be materially different from those
predicted. These forward looking statements are subject to numerous risks and
uncertainties that could cause actual results to differ materially from those in
such statements, certain of which are beyond the control of Cookson.


                      This information is provided by RNS
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