3rd Jan 2006 07:01
Cookson Group PLC03 January 2006 3 January 2006 COOKSON GROUP PLC SALE OF SPECIALTY COATING SYSTEMS ("SCS") FOR $55.5M £100M DISPOSALS PROCEEDS TARGET NOW ACHIEVED Cookson Group plc ("Cookson"), the leading materials science company, announcesthat on 31 December 2005 it sold SCS, a business which forms part of theAssembly Materials sector of Cookson's Electronics division, to Bunker HillCapital for US$55.5 million (£32.3 million*). The consideration was satisfiedby way of an immediate cash payment of US$54.0 million (£31.4 million*), with anadditional US$1.5 million (£0.9 million*) to be paid upon closing of the sale ofthe SCS China business in early 2006. The consideration will be subject tocompletion balance sheet adjustments in respect of working capital and capitalexpenditure, which are not expected to be material. The sale of SCS is part of Cookson's strategy of achieving progressivedebt reduction through, in part, non-core business disposals, and brings theproceeds from disposals agreed in 2005 up to the £100 million targeted by theend of 2006. SCS comprises a group of companies and business assets with its main operationsin the USA, Europe and Asia-Pacific. Its primary business is the serviceapplication of a specialty conformal coating product principally for use inautomotive, electronic and medical applications. On an International Financial Reporting Standards ("IFRS") basis, for the yearended 31 December 2004, SCS generated a trading profit** of £4.3 million onrevenue of £19 million. As at 31 December 2004, SCS had gross assets of £18million and gross liabilities of £2 million. For the six months ended 30 June2005, SCS generated a trading profit** of £2.1 million on revenue of £9 million. As at 30 June 2005, SCS had gross assets of £19 million and gross liabilitiesof £2 million and employed 285 people. The net cash proceeds from the sale will strengthen Cookson's balancesheet and provide greater financial flexibility. Additionally, Cookson willconsider making advanced payments into its UK pension scheme to reduce theexisting deficit. In January 2005, Cookson announced a target of raising over £100 million fromdisposal proceeds by the end of 2006. In the six month period to 30 June 2005,proceeds from disposals totalled £13 million. Furthermore, on 15 December itwas announced that a conditional agreement had been entered into to sell Cookson's Laminates business for US$91 million (£53 million*). On completion ofthat disposal (expected in February 2006) together with some further propertydisposals completed recently and including the proceeds from this transaction,Cookson will have generated disposal proceeds of over £100 million. Commenting on the sale of SCS, Nick Salmon, Chief Executive of Cookson Groupplc, said: "SCS is a good quality business, as reflected in the price achieved.However, it does not fit strategically with our core electronics business, andthe sale represents further significant progress in terms of our strategy ofprogressive debt reduction. Following the recent announcement regarding thesale of our Laminates business, this deal means we have achieved our strategicgoal of raising £100 million through disposals, a year ahead of schedule. "Our strategic plan also involves achieving significant improvements inprofitability, and our third quarter trading update in early Novemberdemonstrated that we are making solid progress in this regard as well." Shareholder/analyst enquiries:Nick Salmon, Chief Executive Cookson Group plcMike Butterworth, Group Finance Director Tel: + 44 (0)20 7061 6500Isabel Vilela, Investor Relations Manager Media enquiries:John Olsen Hogarth Partnership Tel: +44 (0)20 7357 9477 Notes: * translated at an exchange rate of US$1.718/£1 ** trading profit consists of profit from operations before central Group andDivisional cost allocations, rationalisation costs, amortisation and impairmentof intangible assets and profit/(loss) relating to fixed assets Note to editors: In January 2005, Cookson announced its strategy which focuses on performanceenhancement, debt reduction and the disposal of non-core activities. Cookson's objectives include improving profitability, with targetedreturn on sales by 2007 of 10% in both the Ceramics and Electronics divisionsand a return on net sales value (i.e. excluding the precious metals content) of15% for the Precious Metals division. Cookson also plans to reduce total debtsignificantly over the next 2-3 years. This will be achieved through acombination of strong operational cash flow - from improved profitability andworking capital management - and a disposal programme which will raise over £100million from the sale of a number of non-core activities and assets by the endof 2006. In addition, Cookson intends to resume a sustainable dividend paymentas soon as possible with dividends funded from free cash flow. About Cookson Group plc Cookson Group plc is a leading materials science company which providesmaterials, processes and services to customers worldwide. The Group'soperations are formed into three divisions - Ceramics, Electronics andPrecious Metals. The Ceramics division is the world leader in the supply of advanced flow controland refractory products and systems to the iron and steel industry and is also aleading supplier of specialist ceramics products and refractory linings to thesteel, glass, foundry and other industries. The Electronics division is a leading supplier of materials and services tofabricators and assemblers of printed circuit boards and semiconductor packagingand to industrial markets including automotive and construction. The Precious Metals division is a leading supplier to the jewellery industry offabricated precious metals products. Headquartered in London, Cookson employs some 16,000 people in more than 35countries and sells its products in over 100 countries. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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