Interim Results

2nd Aug 2007 07:02

Cookson Group PLC02 August 2007 2 August 2007 COOKSON GROUP PLC - ANNOUNCEMENT OF 2007 INTERIM RESULTS HIGHLIGHTS • Strong improvement in continuing operations (at constant currency): - Revenue of £785 million, up 4% - Trading profit of £78 million, up 20% - Return on sales up 1.3 percentage points to 10.0% • Very strong performance in Ceramics, division's margin target increased to a range of 14% to 16% • Headline PBT and EPS up 10% and 18% respectively • Strong profit growth in low tax rate jurisdictions reduces the Group's effective tax rate by 5.3 percentage points • Interim dividend of 4.25 pence per share, up 42% First Half Increase/(decrease) vs 2006 Year Reported Constant 2007 2006 rates rates 2006 Continuing Operations1 Revenue £785m £803m -2% +4% £1,590mTrading profit2 £78.4m £69.7m +12% +20% £150.3mReturn on sales2 10.0% 8.7% +1.3 pts +1.3 pts 9.5%Tax rate - headline3 27.5% 32.8% -5.3 pts 31.3% Total Operations Revenue £786m £866m -9% -3% £1,661mTrading profit2 £78.3m £76.0m +3% +10% £158.2mReturn on sales2 10.0% 8.8% +1.2 pts +1.2 pts 9.5% Profit before - headline2 £68.2m £61.9m +10% £131.2mtax - basic £67.6m £53.4m +27% £113.5mEarnings per - headline2 25.2p 21.4p +18% 46.6pshare - basic 24.2p 12.7p +91% 32.8pDividends per share 4.25p 3.0p +42% 10.0p Free cash flow2 £(36.9)m £(5.7)m £(31.2)m £64.5mNet debt2 £245.0m £248.7m £ £180.5m (3.7)m 1 Continuing operations exclude the results of the Monofrax and Laminatesbusinesses 2 Refer to Note 1 of the attached financial statements for definitions 3 Tax rate on headline profit before tax from continuing operations (beforeshare of post-tax profit of joint ventures) Commenting on the Group's results and outlook, Nick Salmon, Chief Executive,said: "We have continued to make good progress so far in 2007, as these resultsdemonstrate. We now believe that underlying trading profit going forward hasgreater growth potential than we anticipated in the November 2006 StrategyUpdate. This improvement is driven by the Ceramics division's performance andprospects and, accordingly, we are raising our margin expectations for thisbusiness. "The weakening of the US dollar and other dollar tracker currencies impacts thetranslation of results into sterling but does not impact our competitiveness ormargins. "Strong profit growth in low tax jurisdictions has substantially reduced thepercentage tax rate and we expect a further reduction in 2008. "We therefore anticipate continuing strong improvement in our full yearperformance." OVERVIEW Ceramics The Ceramics division has delivered a very strong performance so far in 2007.Underlying revenue (at constant currency and adjusted for disposals) grew 14%,while global steel production, our main end market, grew 8%. Thisout-performance reflects the progressive increase in our addressable market, asthe steel industry in countries such as China, Russia and Ukraine increasinglyconverts to enclosed continuous casting technology which requires our flowcontrol products, together with some market share gains. Trading profit was up30% (at constant exchange rates). The return on sales margin reached 13.6%, ahead of our 13% target for 2008.Accordingly, our expectation for margins for this business has been revised to arange of between 14% to 16%, assuming there is no unexpected major downturn inour end-markets. The profit growth has resulted primarily from revenue growth in high-marginproduct segments, particularly flow control and from the continued turnaround ofthe linings activity, where the margin reached 7.4% (before central costallocations), up from 4.1% in the same period in 2006. With the high underlying growth rates, production capacities are being expandedin certain areas. In respect of previously announced projects, the newslide-gate and linings facilities in Mexico and new glass roller and SolarCrucible(TM) plants in China were commissioned in the first half of 2007. In thesecond half of the year, the new slide-gate and Solar Crucible(TM) plants inPoland will be completed. The foundry crucible plant in China is scheduled tostart production in the second quarter of 2008. Today, a number of further recently authorised expansion projects are beingannounced including the acquisition from a local supplier of a linings businessin China for a cash consideration of £4 million and the construction of a newlinings plant in India. It is also planned to expand the existing SolarCrucible(TM) plant in the Czech Republic, given the very high growth in demand forthis product, as well as a capacity expansion and productivity improvementproject for flow control products in continental Europe. The total investmentin these projects is expected to be some £20 million. Further expansion projects in China, India and Russia are under consideration.All projects are subject to careful evaluation to ensure the investments deliverreturns well in excess of our cost of capital and the Group has a good trackrecord of completing projects on time and on budget. Electronics Revenue, at reported exchange rates, fell 4% compared with the first half of2006, but when adjusted for constant currency, disposals and the effect ofcommodity metal price fluctuations, underlying revenue fell by 2%. End-market growth for electronic equipment, which accounts for around 85% of theAssembly Materials sector's revenue, whilst marginally lower than that in 2006,has remained ahead of global GDP. Against this background, sales of lead-freesolder were flat (by weight). Lower cost SACX(TM) (0.3% silver) made strong gainsand constituted 33% of lead-free sales (by weight) in the first half of 2007compared with 22% in the same period last year, substituting higher cost 3%silver solder. Sales of traditional lead-based solder were markedly down, butwith improved profitability as the business deliberately focused only onhigher-margin sales. The Semi-conductor Packaging Materials business, whichrepresents 5% of Assembly Materials' revenue, made a small loss on revenue down25% compared with the first half of 2006, when it delivered £1.5 million oftrading profit. In March 2007, a change in the management of this business wasannounced and a turnaround in the second half of 2007 is expected based on somesuccessful recent new product launches. In the Chemistry sector, underlying revenue (at constant currency andeliminating the effect of precious metal sales) grew 3%. Industrial andautomotive-related revenue grew strongly in Europe and to a lesser extent inNAFTA, particularly in plating-on-plastic and corrosion and wear-resistantcoating product lines. Electronics-related demand was relatively weak in allregions, reflecting low PCB sales. For the division as a whole, trading profit was up 6% (at constant currency) andreturn on sales improved to 9.9%. The previously announced rationalisation projects of Assembly Materials in NAFTAand Chemistry in Europe are now well advanced and should be completed by thisyear-end. The project to build a new Chemistry sector factory in China has beenput back to 2008 due to delays in the permitting process. Meanwhile, the marketis being served from the Group's facilities in Tianjin and Shenzhen in China andfrom Singapore. Precious Metals Net sales value was down 9% (at constant currency), reflecting a weaker retailjewellery market in North America and broadly unchanged conditions in Europe.As a consequence, trading profit was down £0.8 million from last year atconstant exchange rates and £1.2 million at reported exchange rates. The previously announced rationalisation projects in the US and the UK are alsowell advanced and will produce annualised cost savings of £3.5 million from2008. DIVIDEND Supported by the Group's continued good progress, the Board is declaring aninterim dividend for 2007 of 4.25 pence per share (2006: 3.0 pence). OUTLOOK All indications are for the Ceramics division's end-markets to remain buoyant.Industry commentators are pointing to a mild pick up in Electronics-relatedend-markets in the second-half of 2007 compared with the first half. As yet,there is a lack of clear visibility on the strength of the retail jewellerymarket in the important Thanksgiving and Christmas periods. All three divisions have detailed plans to deliver strong organic earningsgrowth through 2008 and beyond. Underlying trading profit going forward, beforethe impact of currency translation, has greater growth potential than weanticipated in the November 2006 Strategy Update. This improvement is driven bythe Ceramics division's performance and prospects and, accordingly, we areraising our margin expectations for this business. The weakening of the US dollar and other dollar tracker currencies impacts thetranslation of results into sterling but does not impact the Group'scompetitiveness or margins. Strong profits growth in low tax jurisdictions has substantially reduced thepercentage tax rate and we expect a further reduction in 2008. Continuing strong improvement in our full year performance is thereforeanticipated. REVIEW OF OPERATIONS Note: the data provided in the tables below are at reported exchange rates. Group - continuing operations First Half Year 2007 2006 2006Revenue (£m) 785 803 1,590Trading profit (£m) 78.4 69.7 150.3Return on sales 10.0% 8.7% 9.5% Group revenue from continuing operations in the first half of 2007 was 4% aheadof the same period in 2006 at constant exchange rates, although marginally lower(2%) at reported exchange rates. The increase in revenue at constant exchangerates reflected strong organic growth in the Ceramics division and the impact ofhigher metal prices being 'passed through' to customers in the Precious Metalsdivision and the Assembly Materials and Chemistry sectors of the Electronicsdivision. This revenue growth was partially offset by the loss of approximately£34 million of revenue relating to businesses which have been sold or closed inthe last eighteen months but which do not qualify to be treated as discontinuedoperations for financial reporting purposes. Revenue for the Group's operationsin the Asia-Pacific region continued to grow strongly; now representing 23% ofGroup revenue (first half 2006: 21%), with Europe and NAFTA representing 39% and33% respectively. Trading profit from continuing operations in the first half of 2007 increasedsignificantly to £78.4 million (2006: £69.7 million), being 20% higher atconstant exchange rates and 12% higher at reported exchange rates. Alldivisions and sectors reported an increase in their trading profit at constantexchange rates except for the Precious Metals division which reported a smalldecrease. The strong growth in trading profit resulted in a significant increase in theGroup's return on sales from continuing operations to 10.0% from 8.7%. Theimpact of higher metal prices increasing reported revenue without any impact onprofitability depressed the return on sales in the first half of 2007 by around0.3 percentage points compared to the same period last year. Ceramics division First Half Year 2007 2006 2006Revenue (£m) 386 384 757Trading profit (£m) 52.6 42.6 89.5Return on sales 13.6% 11.1% 11.8% The division performed very strongly in the first half of 2007 with revenue atconstant exchange rates higher by 7% compared to the same period last year (1%at reported exchange rates). Underlying growth, adjusted to take account of thedisposals of Ceramic Fibres (March 2006), UK Carbon Blocks (June 2006), UKMagnesia-carbon Bricks (December 2006) and US Bricks (February 2007), was verystrong at 14%. Trading profit at £52.6 million was 30% higher at constant exchange rates (23%at reported exchange rates) resulting in the return on sales increasing from11.1% to 13.6%. The strong trading performance was driven by strong growth inthe division's key end-markets, in particular the steel, glass and solarindustries. The first half of 2007 also started to see the beneficial impact ofthe investment and restructuring initiatives announced in 2006 (which includeadditional production facilities in China, Poland and Mexico and the closure offacilities in the UK and the US) although, as anticipated, the full benefitsarising from a number of these initiatives will not be realised until 2008. TheStrategy Update in November 2006 included a target of improving profitability indeveloped markets for our linings business, which constitutes around 40% of thedivision's revenue. In the first half of 2007, further good progress was madetowards this target with the return on sales in linings (pre-central costallocations) improving to 7.4% from 4.1% in the first half of 2006. Whilst thisimprovement is encouraging, this level of profitability is still below that ofits main competitors and we believe that further progress can be made. The key end-market for each of our geographic regions is global steelproduction, which accounts for around 70% of the division's total revenue.Global steel production grew 8% in the first half of 2007, marginally below the9% growth seen in full year 2006. Steel production in NAFTA was down by 2%, butthis was offset by good growth in other markets, including Europe (up 3%), theCIS (up 6%), China (up 18%) and India (up 6%). Note: in the regional analysis below for the Ceramics division, all of thefinancial information is presented on an underlying basis which is at constantcurrency and adjusts for the disposals noted above. NAFTA (comprising the US, Canada and Mexico) Underlying revenue in NAFTA grew by 7% to £124 million with 18% growth inlinings (which constitutes just over one half of the region's revenue) more thanoffsetting a small decline in flow control resulting from the decline in steelproduction. Revenue in foundry was broadly unchanged. Steel production inNAFTA fell by 2% in the first half of 2007 compared to the same period lastyear, reflecting some temporary production cut-backs initiated in the US in late2006/early 2007 (US steel production was down 4%). These cut-backs have nowlargely been reversed and steel production in the US is currently running at alevel similar to the average for the first three quarters of 2006. Underlying trading profit in the first half of 2007 increased markedly by justover one-third on the same period last year reflecting strongly improvedprofitability in linings, achieved through increased management focus combinedwith more rigorous cost control. During the first half of 2007, the division continued its restructuringprogramme with the closure of the Crown Point (Illinois) facility in June.Production of taphole clay, a product used in the operation of blast furnaces,has been transferred to an existing facility at Chicago Heights (Illinois) wherea new production line using updated technology has been constructed. Theexpansion of slide-gate and linings production at our facility in Monterrey,Mexico was completed in the first quarter of 2007. In February 2007, as part ofthe programme of disposing of non-core businesses, the sale of Monofrax, afused-cast refractory business based in Falconer (New York), was completed and asmall US refractory brick business was also sold. Europe (including CIS) Good market conditions resulted in a 14% growth in underlying revenue to £150million compared to the first half of 2006. Flow control, which constitutesnearly 60% of European revenue, grew by 16%, well ahead of the 4% growth insteel production in the region. This resulted from market share gains and anincrease in our addressable market as the Russian and Ukrainian steel industryincreasingly converts to enclosed continuous casting technology which requiresour flow control products. Steel production growth was particularly strong inGermany, Turkey, Russia and Ukraine with more modest growth in the UK, Spain andItaly. Linings also grew strongly with underlying revenue 19% higher than thefirst half of 2006. Revenue in foundry was broadly unchanged. Trading profit grew by just over one-third compared with the first half of 2006as a result of the strong volume growth in flow control and linings combinedwith cost reductions in linings. The expansion of slide-gate capacity at our facility in Skawina, Poland based onnew slide-gate plate technology was completed on schedule in July, withproduction of slide-gates due to cease in Goole, UK in August. With our flowcontrol operations in the region currently operating at, or near to, fullcapacity, it has been decided to invest £8 million in a new flow controlfacility in continental Europe. This new facility, which should be operationalin the second half of 2008, will deliver productivity improvements as well asincreasing our flow control capacity. The expected future growth in Russian andUkrainian steel production, and the modernisation of their steel industry,represents a significant opportunity for the division. These markets arecurrently served by products manufactured outside of these two countries and thepossibility of establishing a local manufacturing presence is currently beingevaluated. Asia-Pacific and ROW Underlying revenue in these regions grew in total by 22% to £88 millionreflecting both strong steel production growth in the three key markets of China(up 18%), India (up 6%) and Brazil (up 13%) which underpinned strong growth inflow control (up 20%), plus strong revenue growth in linings, which primarilyoperates in Australia (up 26%). The Chinese government continues to encouragethe steel industry to shift to more modern, energy and pollution-efficientmethods of steel production which should expand the market for the Ceramicsdivision's flow control products. In May, the intention to close 682 oldfacilities (totalling 42 million tons of steel production) by 2010 wasannounced, of which just over half are intended to be closed in 2007 to bereplaced by modern enclosed continuous casting plants. This trend should enablethe division to continue its strong progress in China. The strong revenue growth has resulted in underlying trading profit being justover one-third ahead of the first half of last year. The previously announced construction of a new £5 million foundry cruciblesfacility in Suzhou, Jiangsu Province, near two of the division's existingChinese facilities, is progressing and the facility is expected to beoperational by the second quarter of 2008. The project has been delayed by sixmonths due to long delivery times for the specialist press equipment. Oncecomplete, the facility will produce long-life, high-performance alumina graphitecrucibles for the fast growing non-ferrous foundry market. The Chinese foundryindustry is the largest in the world and has experienced growth of around 10%per annum over the last few years. Earlier this year, the construction of a new£1 million linings facility in India was approved. This facility should beoperational in the fourth quarter of 2007, producing monolithics, pre-castlinings and taphole clay for this fast-growing market. Given the expectedstrong growth in steel production, expansion plans for flow control productionare currently being developed in both China and India. In April, the acquisition of Bayuquan Refractories Co. Limited ("BRC") wascompleted for a cash consideration of US$8.7 million (£4.3 million). BRC, whichmanufactures brick-lining products in China, was previously a supplier to thedivision. This acquisition gives us certainty of supply of these products andalso provides us with more freedom to conduct and grow our linings business inAsia-Pacific. Expansion of BRC's production capacity is currently underevaluation. Fused Silica The fused silica product line is managed on a global rather than regional basis.The principal products in the global fused silica product line are temperingrollers used in the glass industry and Solar Crucibles(TM) used in the manufactureof photovoltaic ("solar") cells. Underlying revenue has grown by 22% to £24million compared to the first half of 2006, driven by good market conditions inboth principal end-markets. The glass industry has continued to see good growth- particularly in the construction industry in China and the Middle East andincreasing demand for flat screen television panels - whilst growth in the solarenergy industry has accelerated as supply shortages of the polycrystallinesilicon material used in the majority of solar panels have eased with additionalcapacity now coming on stream. The solar energy industry is predicted bycommentators to grow at between 20-30% per annum over the next few years. Underlying trading profit has increased by 16% on the first half of 2006 withthe strong volume growth partially offset by 'one-off' production start-up costsarising in the new Solar Crucible(TM) facility in China. To meet the increasing demand for fused silica products, three new facilitiesare to be completed in 2007. In the first quarter of 2007, a £2 millioninvestment in Kua Tang, the site of the division's existing glass rollerbusiness in China was completed, which significantly expanded capacity forproducing the rollers used in the glass industry and transformed this facilityinto the Ceramics division's worldwide lead centre for glass roller production.Alongside this facility, in the second quarter the division also completed theconstruction of a new £3 million facility to manufacture Solar Crucibles(TM) forthe fast-growing photovoltaic market in Asia-Pacific. In addition to theseadditional investments in China, a £7 million investment to build a SolarCrucible(TM) facility in Skawina, Poland to supply European customers is nearingcompletion and is expected to be operational during the third quarter of 2007.Each of these three new facilities is expected to be operating close to fullcapacity by the beginning of 2008 and further capacity expansion has recentlybeen agreed at both the Kua Tang glass roller facility in China (£1 millioninvestment) and our Solar Crucible(TM) facility in Moravia, Czech Republic (£6million investment). A further Solar Crucible(TM) facility in China is alsocurrently under evaluation, reflecting the predicted continuing strong demandfor this product in Asia-Pacific. Electronics division First Half Year 2007 2006 2006Revenue (£m) 269 281 555Trading profit (£m) 26.8 27.1 58.5Return on sales 9.9% 9.6% 10.5% The Electronics division comprises two sectors, Assembly Materials andChemistry, the results of which are reviewed below. Assembly Materials First Half Year 2007 2006 2006Revenue (£m) 154 162 319Trading profit (£m) 12.9 12.7 28.2Return on sales 8.4% 7.8% 8.8% Revenue for the first half of 2007 was £154 million, 2% higher at constantexchange rates (but 5% lower at reported exchange rates) when compared to thesame period last year. The higher revenue reflected the 'pass through' tocustomers of higher metal prices, in particular for tin and silver. In thefirst half of 2007, the average prices of tin and silver - the sector's majorraw materials - were respectively 62% and 17% higher than the same period lastyear, such that revenue increased by approximately £23 million as a result ofthese higher metal prices. Revenue also reflected the impact of disposals andclosures, namely the sale of the US-based PVC Cements business in December 2006and the closure of the European industrial metals business in Naarden,Netherlands in June 2006. Excluding the impact of higher metal prices anddisposals, underlying revenue was 6% lower than last year (on a constantcurrency basis). This reflects flat volumes of lead-free solder with lower costSACX(TM) (0.3% silver) making strong gains (constituting 33% of lead-free sales(by weight) in the first half of 2006 compared with 22% in the same period lastyear) and substituting higher cost 3% silver solder. Volumes of traditionalunleaded solder have been significantly lower reflecting a strategy of focusingresources on higher margin, more value-added products and exiting morecommoditised markets. End-market growth for electronic equipment (theend-market for around 85% of the sector's revenue), whilst marginally lower thanthat in 2006, has remained ahead of global GDP. The market penetration of lead-free solder, driven by European Union legislationwhich became effective in July 2006, has remained broadly constant compared tothe end of 2006, against an expectation of a continuing (albeit slowing)increase in penetration levels. The significant increase in the price of tinand silver in 2007 has resulted in lead-free solder being much more expensivethan traditional, leaded solder. For the first half of 2007, 51% of solderrevenue came from lead-free sales (first half 2006: 43%), the same percentage asin the fourth quarter of 2006. However, higher metal prices have boosted demandfor our less expensive SACX(TM) products and they made up 20% of total lead-freesolder revenue in the first half of 2007 (first half 2006: 13%). The Semi-conductor Packaging Materials business, which provides epoxy-mouldcompounds, underfills and solder spheres to the electronics industry andconstitutes approximately 5% of the sector's revenue, faced continuing difficultmarket conditions in the first half of 2007, with revenue down 25% compared withthe first half of 2006. Following a change of management in the business at theend of 2006, the business has recently successfully launched a number of newproducts and an improved performance in the second half is expected. Trading profit of £12.9 million was 8% higher than the same period last year atconstant exchange rates (2% at reported exchange rates), reflecting good growthin profitability in the Alpha Fry solder business resulting from the transitionto higher-margin products. However, the Semi-conductor Packaging Materialsbusiness reported a small loss for the period compared to a trading profit of£1.5 million in the same period last year. Excluding the Semi-conductorPackaging Materials business, trading profit in the first half of 2007 increased19% on the same period last year. Return on sales for the sector increased from7.8% to 8.4% despite the impact of higher metal prices. If metals prices in thefirst half of 2007 had remained at similar levels to those in the same periodlast year, the return on sales would have been 9.8%. Asia-Pacific, the sector's largest region, accounted for 55% of revenue in thefirst half of 2007, an increase of 3 percentage points over the same period lastyear, which reflects the increased migration of consumer electronics productionto this region. During the first half of 2007, the restructuring of the sector's manufacturingoperations in NAFTA continued. This initiative, which is expected to becompleted by the end of the third quarter of 2007, will generate annualisedsavings of £2 million. Production of high labour-intensive solder wire is beingmoved from the Altoona (Pennsylvania) facility to a new site in Monterrey,Mexico which has recently been completed. The Jersey City (New Jersey) facilityis to close in the third quarter with production moving to Monterrey, Mexico andto Altoona. The wave solder flux manufacturing facility in Alpharetta (Georgia)is to close in the third quarter with production moving to an existing Chemistrysector facility in Mexico City, Mexico. When completed, headcount in the USwill be reduced by 120 with 90 new jobs created in Mexico. Chemistry First Half Year 2007 2006 2006Revenue (£m) 115 119 236Trading profit (£m) 13.9 14.4 30.3Return on sales 12.0% 12.1% 12.9% Revenue for the first half of 2007 was £115 million, 3% higher at constantexchange rates but 3% lower at reported exchange rates when compared to the sameperiod last year. Excluding the impact of precious metals sales, underlyingrevenue growth was 3% (on a constant currency basis), reflecting good growth inplating-on-plastics and corrosion and wear-resistant coating products forindustrial and automotive markets and marginally lower revenue for surfacecoating products serving the printed circuit board market within electronics.Copper damascene sales were well ahead of the same period last year. Trading profit of £13.9 million was 4% higher than the same period last year atconstant exchange rates (3% lower at reported exchange rates) with the return onsales falling marginally to 12.0%. Europe and NAFTA remain the sector's largest regions with 44% and 34% of totalsector revenue, respectively. Asia-Pacific represents 21% of total sectorrevenue. The rationalisation of the sector's European sales, manufacturing anddistribution network which was initiated in 2006 continued through the firsthalf of 2007. Production capacity has been expanded at our existing facilitiesin Germany and the Netherlands, with these two locations now supplying all ofour European customers. Facilities have been closed in Italy and Spain in thefirst half of 2007, in addition to the facilities in Sweden and Austria whichwere closed in 2006. This initiative results in annualised savings of £2million, most of which are now achieved. Following the buy-out of the 49% minority interest in the Chinese operations inOctober 2006, the construction of a new £8-9 million facility was announced toaccelerate the growth of the sector's operations in China. Delays have beenexperienced in finding an appropriate location for the new facility due to anew, and more stringent, permitting regime. Following an extensive review, asite has now been identified which is in the process of being acquired, withconstruction expected to commence in the first quarter of 2008 for completion inearly 2009. Precious Metals First Half Year 2007 2006 2006Revenue (£m) 129 139 278Net sales value (£m) 49 57 111Trading profit (£m) 3.1 4.3 11.0Return on net sales value 6.3% 7.5% 10.0% The Precious Metals division operates in two distinct geographic regions; theUS, which constitutes 53% of the total net sales value (being revenue excludingthe precious metals content) for the division, and Europe (which includes theUK, France and Spain). Average precious metal prices (notably for gold, silverand platinum) in the first half of 2007 are higher than for the same period lastyear (gold and silver higher by 10% and 17% respectively), but are onlymarginally higher than the end of 2006 (4% for each of silver and gold). Precious Metals - US First Half Year 2007 2006 2006Revenue (£m) 64 77 155Net sales value (£m) 26 33 64Trading profit (£m) 2.3 4.0 9.0Return on net sales value 8.8% 12.1% 14.1% Net sales value of £26 million was 15% lower at constant exchange rates (23%lower at reported exchange rates) reflecting weaker retail demand for jewellery. Trading profit for the first half of 2007 at £2.3 million was 43% (£1.7 million)below the same period last year reflecting the weaker volumes. In response tothe weaker trading conditions, headcount was reduced by 40 in March. Return onnet sales value was 8.8% (first half 2006: 12.1%). The initiative to consolidate all of the US manufacturing operations into theprincipal facility in Attleboro (Massachusetts) has continued in the first halfof 2007, with the relocation to Attleboro of Inverness (our ear-stud businesspreviously located in New Jersey) nearing completion. This relocation, whichwill be completed in the third quarter, and involves a net headcount reductionof 25, will generate annual cost savings of £1.5 million. Precious Metals - Europe First Half Year 2007 2006 2006Revenue (£m) 65 62 123Net sales value (£m) 23 24 47Trading profit (£m) 0.8 0.3 2.0Return on net sales value 3.5% 1.3% 4.3% Net sales value of £23 million was broadly unchanged compared to the same periodlast year at both reported and constant exchange rates, with retail jewellerymarkets relatively stable in each of the key markets of the UK, France andSpain. Trading profit for the first half of 2007 at £0.8 million was £0.5 millionhigher than the same period last year with the UK at breakeven and a smalltrading profit generated in each of France and Spain. Return on net sales valuewas 3.5% (first half 2006: 1.3%). In January 2007, a fundamental restructuring of the UK's manufacturingoperations was announced for implementation on a phased basis during 2007.Manufacturing activity at the main manufacturing facility in Birmingham washalved in the second quarter and a facility in Wrexham will close at the end ofAugust 2007. A new facility in Thailand will be operational shortly. Theseinitiatives, once complete, will result in a headcount reduction of 80 andgenerate annualised savings of approximately £2 million. Group corporate The Group's corporate costs, being the costs directly related to managing theGroup holding company, were £4.1 million, marginally lower than the same periodlast year. Discontinued operations Discontinued operations in the first half of 2007 include the results ofMonofrax prior to its disposal in February 2007. For 2006, discontinuedoperations comprise Monofrax for the full year and also include the results ofthe Laminates business prior to its disposal in April 2006. GROUP FINANCIAL REVIEW First Half Year 2007 2006 2006Profit before tax (£m)- headline 68.2 61.9 131.2- basic 67.6 53.4 113.5 Earnings per share (pence)- headline 25.2 21.4 46.6- basic 24.2 12.7 32.8 Dividends per share (pence) 4.25 3.0 10.0 Free cash flow (£m) (36.9) (5.7) 64.5Net debt (£m) 245 249 181 Restatement of comparative information During 2006, the Directors continued to assess the detailed impact of IFRS onthe presentation of the Group's consolidated financial statements and, as aconsequence, made changes to the accounting treatment and presentation ofcertain items in the Group's consolidated financial statements for 2006. Two ofthose changes, namely those relating to the presentation of the interest costand expected returns associated with the Group's defined benefit pension andother post-retirement benefit plans and the amortisation and impairment ofintangibles, had already been made in the Group's 2006 interim report. The otherchanges, which are explained in Note 2 to the attached financial statements, arereflected in this interim report as restatements of the comparative informationfor the six months ended 30 June 2006. Group Income Statement Headline profit before tax Headline profit before tax for total operations was £68.2 million for the firsthalf of 2007, which was £6.3 million higher than for the same period in 2006.The increase in headline profit before tax arose as follows: First Half 2007 2006 Change £m £m £m %Trading profit:Continuing operations 78.4 65.6 12.8 +20% - at first half 2007 exchange ratesCurrency exchange rate impact - 4.1 (4.1)Discontinued operations (0.1) 6.3 (6.4) (Laminates and Monofrax)Trading profit - at reported exchange rates 78.3 76.0 2.3 +3%Net finance charges (interest) (11.2) (14.6) 3.4Post-tax income from joint ventures 1.1 0.5 0.6Headline profit before tax 68.2 61.9 6.3 +10% The £3.4 million lower charge for net finance costs (interest) comprised £2.3million due to a decrease in the average level of borrowings throughout theperiod and £1.0 million due to lower pension interest as a result of the loweremployee benefits deficit. The £6.4 million decrease in trading profit from discontinued operationsprimarily relating to the disposal of the Laminates business in April 2006. Items excluded from headline profit before tax A net charge of £0.6 million was incurred in the first half of 2007 (first half2006: £8.5 million) for the following items excluded from headline profit beforetax: Rationalisation costs: rationalisation costs of £2.3 million (first half 2006:£8.8 million) were incurred in the first half of 2007, all relating tocontinuing operations. Of the total charge, £0.8 million related to thenon-cash write down of assets and £1.5 million to cash-related costs. Thisprincipally consisted of a charge of £1.5 million in the Precious Metaldivision, both for the rationalisation of the UK manufacturing operations andalso the relocation of Inverness, the ear-stud business, to Attleboro, US. A full-year charge for rationalisation costs of around £10 million is expectedin 2007 reducing to around £5 million per annum from 2008 onwards. Profit relating to non-current assets: a profit of £1.5 million (first half2006: £1.8 million) was realised in the first half of 2007, principally relatingto the disposal of a surplus property in Hong Kong. Profit on disposal of continuing operations: a net profit of £0.2 million (firsthalf 2006: loss of £1.5 million) comprised a small profit arising on thedisposal of the US Bricks business in February 2007, net of trailing costsincurred in respect of prior years' disposals. The US Bricks business, whichdid not qualify to be treated as a discontinued operation for financialreporting purposes, was formerly part of the Ceramics division. The net chargeincluded a write-off of goodwill of £0.5 million. The loss on disposal of continuing operations in the first half of 2006 relatedprincipally to the disposal of the Ceramics divisions' Ceramic Fibres and UKCarbon Block businesses. Group profit before tax and after the items noted above was £67.6 million forthe first half of 2007 compared to £53.4 million in the first half of 2006, up27%. Taxation The tax charge on ordinary activities was £18.5 million. The effective tax rateon headline profit before tax from continuing operations (before share ofpost-tax profit of joint ventures) was 27.5% (first half 2006: 32.8%; full year2006: 31.3%). The decrease in the effective tax rate in the first half of 2007compared to 2006 arises both from a higher proportion of the Group's taxableprofits being earned in relatively low-tax countries (notably China and theCzech Republic) and from improved profitability in previously loss-makingcountries (notably in the UK and the US). This effective tax rate is expectedto be maintained for the full year with a further reduction of around onepercentage point expected for 2008, absent any significant changes in the futuregeographic split of the Group's taxable profits and any material changes, beyondthose already announced, in the statutory tax rates in those countries where theGroup has significant taxable profits. A tax charge of £1.5 million (first half 2006: £1.8 million) arose in relationto all the items excluded from headline profit before tax noted above. Net post-tax profit/(loss) on disposal of discontinued operations A net post-tax profit of £0.3 million (first half 2006: loss of £6.4 million)was reported in the period, comprising a profit before goodwill write-offarising on the disposal of Monofrax, formerly part of the Ceramics division, of£8.7 million, a write-off of goodwill of £4.3 million and additional trailingcosts related to prior years' disposals of £4.1 million. The net post-tax loss on disposal of operations of £6.4 million in the firsthalf of 2006 related to the disposal of the Group's Laminates business, formerlypart of the Electronics division. Profit attributable to equity holders Headline profit attributable to equity holders for the first half of 2007 was£48.5 million (first half 2006: £40.9 million), with the £7.6 million increaseover 2006 arising from the significant increase in headline profit before tax,the decrease in the effective tax rate and a decrease of £1.1 million in profitattributable to minority interests following the buy-out in April 2006 of the49% minority interest in the Chemistry sector's Chinese operations. After taking account of all items excluded from headline profit before tax notedabove (net of the related tax impact) and the net post-tax profit on disposal ofoperations, the Group recorded a profit of £47.9 million for the first half of2007, £21.4 million higher than the £26.5 million profit recorded in the firsthalf of 2006. Earnings per share ("EPS") Headline EPS, based on the headline profit attributable to equity holders,amounted to 25.2 pence per share in the first half of 2007, an increase of 18%on the 21.4 pence recorded in the first half of 2006. The Board believes thisbasis of calculating EPS is an important measure of the underlying earnings pershare of the Group. Basic EPS, based on the net profit attributable to parentcompany equity holders, was 24.2 pence (first half 2006: 12.7 pence). The average number of shares in issue during the first half of 2007 was 192.8million (first half 2006: 190.8 million). Dividend For 2006, the Company paid a total dividend of 10.0 pence per share; an interimdividend of 3.0 pence per share being paid in October 2006; and a final dividendof 7.0 pence per share paid in June 2007. The Board's confidence in the futureprospects for the Group, supported by the strong improvement in profitability inthe first half of 2007, has resulted in the Board declaring an interim dividendfor 2007 of 4.25 pence per share, a 42% increase on the 2006 interim dividend.Going forward the Board is aiming to balance the split of interim and finaldividends in line with market norms. The interim dividend will be paid on 15October 2007 to all shareholders on the register at the close of business on 28September 2007. Shareholders may choose to use the Dividend Reinvestment Plan ("DRIP") toreinvest the interim dividend. The closing date for the receipt of new DRIPmandates is 1 October 2007. Group cash flow Net cash from operating activities In the first half of 2007, there was a £31.5 million net cash outflow fromoperating activities, £26.3 million higher than the first half of 2006. Thisincrease principally arose from: First Half 2007 2006 Change £m £m £m EBITDA 95.5 95.6 (0.1)Trade and other working capital (82.2) (47.9) (34.3)Cash outflow related to assets and liabilities (1.1) (8.8) 7.7held for saleRationalisation costs paid (8.0) (9.2) 1.2UK pension plan - additional contributions (14.8) (12.8) (2.0)Net interest paid (8.9) (11.1) 2.2Taxation paid (12.0) (11.0) (1.0) Net cash outflow from operating activities (31.5) (5.2) (26.3) Of the £82.2 million cash outflow in respect of trade and other working capital,£39.1 million relates to the increased level of inventory and trade receivablesresulting from the 14% underlying revenue growth in the Ceramics division in theperiod. Also contributing to the outflow was the negative impact on the levelof inventories and trade receivables at 30 June 2007 of higher metal prices(notably for gold, silver and tin) in the Precious Metals division and theAssembly Materials and Chemistry sectors. Importantly, the ratio of averagetrade working capital to sales from continuing operations of 22.5% was onlymarginally higher than the 2006 full year at 21.8% (first half 2006: 21.5%). The £7.7 million reduction in outflows related to assets and liabilities heldfor sale related principally to Laminates which was disposed of in April 2006. Cash outflow for rationalisation was £8.0 million related to prior periodprogrammes that were initiated in respect of continuing businesses. A cashoutflow for rationalisation of around £20 million is expected in full year 2007and £10 million for 2008. Net cash from investing activities Capital expenditure: payments to acquire property, plant and equipment in thefirst half of 2007 were £24.4 million, 67% higher than the first half of 2006and representing 142% of depreciation (first half 2006: 74%). Of the totalpayments, £16.9 million arose in the Ceramics division in respect of a number ofprojects in China, Poland and Mexico which, once completed, will increaseproduction capacity and enhance underlying revenue growth going forward. A cashoutflow for capital expenditure of between £50 million and £55 million isexpected in full year 2007, with a similar amount expected for 2008. Thisreflects both the delay, from 2007 to 2008, of the construction of the new £8million Chinese facility in the Chemistry sector and the identification of anumber of additional expansion projects in the Ceramics division. Proceeds from the sale of surplus properties: proceeds, principally arising inHong Kong, were £4.9 million (first half 2006: £2.8 million). Dividends from joint ventures: dividends of £0.8 million were received in theperiod (first half 2006: £0.9 million) from the Chemistry sector's Japanesejoint venture. Disposals: net cash inflow from disposals in the first half of 2007 was £22.4million which included the following: • proceeds from the disposal of businesses, net of disposal costs, of£20.0 million, principally comprising £18.4 million for the disposal in February2007 of Monofrax and £1.6 million for the disposal in February 2007 of the USBrick business; and • other net consideration received for prior period disposals of £2.4million, comprising £1.5 million for the disposal in June 2006 of the CarbonBricks operation in Bawtry, UK and £1.9 million for the disposal in 2003 ofSpeedline, net of trailing costs of £1.0 million in respect of prior years'disposals. Proceeds from the disposal of businesses, net of disposal costs, in the firsthalf of 2006 were £56.9 million, principally comprising £11.8 million for thedisposal in March 2006 of the Ceramic Fibres business and £43.6 million for thedisposal in April 2006 of the Laminates business. Outflow relating to property held for sale: in January 2007, the Group acquiredthe freehold interest in the site of the former Magnesia Carbon Bricks businesslocated in Worksop (UK), a business which had been closed in December 2006. Itis expected that this site will be sold in the second half of 2007. Free cash flow Free cash flow is defined as net cash flow from operating activities and afternet outlays for the acquisition and disposal of property, plant and equipment,dividends received from joint ventures and paid to minority shareholders, butbefore additional funding contributions to Group pension plans. Free cash outflow for the first half of 2007 was £36.9 million, £31.2 millionhigher than the £5.7 million outflow in the first half of 2006, due both to the£26.3 million decrease in cash flow from operating activities for the reasonsdescribed above and the £9.8 million increase in the payments to acquireproperty, plant and equipment. The Group traditionally experiences free cash outflows in the first half of theyear and inflows in the second half, due to the seasonality of trade workingcapital cash flows. The annualised free cash inflow for the year ended June2007, was £33.3 million. Net cash flow before financing Net cash outflow before financing for the first half of 2007 was £39.2 million,compared with a net cash inflow of £37.1 million in the first half of 2006.This arose due both to the reduction in free cash flow for the reasons notedabove and a £34.5 million reduction in proceeds from the disposal of businesses. After an outflow for financing activities (before repayment of borrowings) of£26.7 million (first half 2006: £13.5 million), principally comprising the £13.5million payment of the 2006 final dividend of 7.0 pence per share in June 2007,the net cash outflow for the first half of 2007 (before repayment of borrowings)was £65.9 million, £89.5 million adverse compared with the first half of 2006. With a £4.1 million positive translation effect (the value of sterling increasedfrom US$1.96 to US$2.01 during the first half of 2007), the net cash outflowresulted in an increase in net debt from 1 January 2007 of £64.5 million to£245.0 million as at 30 June 2007 (30 June 2006: £248.7 million). Group borrowings The net debt of £245.0 million as at 30 June 2007 was primarily drawn onavailable medium to long-term committed facilities of around £450 million. TheGroup's net debt comprised the following: 30 June 31 December 30 June 2007 2006 2006 £m £m £mUS Private Placement loan notes 246.2 278.5 294.7Committed bank facility 10.0 - -Lease financing 1.6 1.9 3.0Other loans, overdrafts, other 34.5 12.0 6.4Gross borrowings 292.3 292.4 304.1Cash and short-term deposits (47.3) (111.9) (55.4)Net Debt 245.0 180.5 248.7 The US Private Placement loan notes, currently US$495 million following therepayment of US$50 million in May 2007, are repayable at various dates between2007 and 2012, with US$130 million being due for repayment in November 2007. The committed bank facility is for £200 million and has a current maturity dateof March 2010. Sufficient headroom exists within this committed facility tomeet the US$130 million repayment of the US Private Placement loan notes due inNovember 2007. Currency The US dollar weakened marginally against sterling during the course of theperiod such that the exchange rate at 30 June 2007 was some 3% higher than at 1January 2007. The average US dollar exchange rate for the first half of 2007was 10% higher than the average exchange rate for the first half of 2006. OtherUS dollar "tracking" currencies, such as the Hong Kong dollar and the Chineserenminbi, also showed a similar, if less marked, trend. The value of the eurowas relatively stable against sterling, both in respect of the period-end ratesand the average rates for the half year compared to last half year. In the first half of 2007, the net translation impact of currency changescompared to the same period last year was to reduce revenue from continuingoperations by around £47 million, reduce trading profit from continuingoperations by around £4 million, reduce headline profit before tax by around £3million, and reduce headline earnings per share by around 1 pence. Pension fund and other post-retirement obligations The Group operates defined contribution and defined benefit pension plans,principally in the UK and US. In addition, the Group has various other definedbenefit post-retirement arrangements, being principally healthcare plans in theUS. As at 30 June 2007, a liability of £126.7 million was recognised in respect ofemployee benefits, a decrease of £28.4 million over the £155.1 million as at 31December 2006. This decrease results primarily from the additional 'top-up'payments made in respect of the UK plan and an increase in the prescribeddiscount rates used to calculate the present value of future liabilities for theUS plans. Of the total liability, £62.4 million relates to the deficit on theGroup's defined benefit pension plan in the UK, £29.9 million to the Group'sdefined benefit pension plans in the US, £12.8 million to pension arrangementsin the Rest of the World, and £21.6 million to unfunded post-retirement definedbenefit arrangements, being mainly healthcare benefit arrangements in the US. In February 2006, it was agreed with the Trustee of the Group's UK plan, to make'top-up' payments (in addition to the normal cash contributions) of £26.5million in 2007. The level of these additional 'top-up' payments will bereviewed in consultation with the Trustee when the next triennial valuation isavailable in Autumn 2007. In the first half of 2007, additional 'top-up'payments of £14.8 million have been made (first half 2006: £12.8 million). The total charge to the income statement in the first half of 2007 for allpension plans (including defined contribution plans) was £8.5 million, areduction of £2.9 million over the first half of 2006. Of this charge, £7.2million (first half 2006: £9.1 million) has been deducted in arriving at tradingprofit and £1.3 million (first half 2006: £2.3 million) has been included withinfinance charges. Total pension cash contributions amounted to £19.3 million inthe first half of 2007 (first half 2006: £17.7 million). Shareholder/analyst enquiries: Cookson Group plcNick Salmon, Chief Executive Tel: +44 (0)20 7822 0000Mike Butterworth, Group Finance DirectorAnna Hartropp, Investor Relations ManagerMedia enquiries:John Olsen Hogarth Partnership Tel: +44 (0)20 7357 9477 Cookson management will make a presentation to analysts on 2 August 2007 at 10:30am (UK time). This will be broadcast live on Cookson's website. An archiveversion of the presentation will be available on the website from late afternoonon 2 August. Forward Looking Statements This announcement contains certain forward-looking statements which may includereference to one or more of the following: the Group's financial condition,results of operations, cash flows, dividends, financing plans, businessstrategies, operating efficiencies or synergies, budgets, capital and otherexpenditures, 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 herebyidentified 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, arenecessarily based on assumptions reflecting the views of Cookson and involve anumber of known and unknown risks, uncertainties and other factors that couldcause actual results, performance or achievements to differ materially fromthose expressed or implied by the forward-looking statements. Suchforward-looking statements should, therefore, be considered in light of variousimportant factors. Important factors that could cause actual results to differmaterially from estimates or projections contained in the forward-lookingstatements include without limitation: economic and business cycles, the termsand conditions of Cookson's financing arrangements, foreign currency ratefluctuations, competition in Cookson's principal markets, acquisitions ordisposals of businesses or assets and trends in Cookson's principal industries. The foregoing list of important factors is not exhaustive. When relying onforward-looking statements, careful consideration should be given to theforegoing factors and other uncertainties and events, as well as factorsdescribed in documents the Company files with the UK regulator from time to timeincluding its annual reports and accounts. Such forward-looking statements speak only as of the date on which they aremade. Except as required by the Rules of the UK Listing Authority and the LondonStock Exchange and applicable law, Cookson undertakes no obligation to updatepublicly or revise any forward-looking statements, whether as a result of newinformation, future events or otherwise. In light of these risks, uncertaintiesand assumptions, the forward-looking events discussed in this announcement mightnot occur. Cookson Group plc, 165 Fleet Street, London EC4A 2AE Registered in England and Wales No. 251977 www.cooksongroup.co.uk Condensed Group Income StatementFor the six months ended 30 June 2007 Half Half year Continuing Discontinued year Continuing Discontinued 2006 Full year operations operations 2007 operations operations restated 2006 (note 2) Notes £m £m £m £m £m £m £mRevenue 3 784.9 1.5 786.4 803.3 62.2 865.5 1,661.4Manufacturing costs - raw materials (375.6) (0.2) (375.8) (381.5) (28.9) (410.4) (797.4)- other (186.0) (1.2) (187.2) (194.5) (18.6) (213.1) (400.8)Administration, selling and (144.9) (0.2) (145.1) (157.6) (8.4) (166.0) (305.0)distribution costsTrading profit 3 78.4 (0.1) 78.3 69.7 6.3 76.0 158.2Rationalisation of operating 4 (2.3) - (2.3) (8.8) - (8.8) (34.7)activitiesProfit relating to 5 1.5 - 1.5 1.8 - 1.8 13.1non-current assetsCurtailment gains relating 6 - - - - - - 8.6to employee benefitsProfit from operations 3 77.6 (0.1) 77.5 62.7 6.3 69.0 145.2Finance costs 7 (27.6) - (27.6) (28.5) - (28.5) (53.8)Finance income 7 16.4 - 16.4 13.9 - 13.9 25.4Share of post-tax profit of 1.1 - 1.1 0.5 - 0.5 1.4joint venturesNet profit/(loss) on 8 0.2 - 0.2 (1.5) - (1.5) (4.7)disposal of continuingoperationsProfit before tax 67.7 (0.1) 67.6 47.1 6.3 53.4 113.5Income tax costs - ordinary activities 9 (18.5) - (18.5) (18.1) (0.6) (18.7) (38.5) - exceptional items 9 (1.5) - (1.5) (1.8) - (1.8) (5.3)Net post-tax profit/(loss) 10 - 0.3 0.3 - (6.4) (6.4) (3.3)on disposal of discontinuedoperationsProfit for the period 47.7 0.2 47.9 27.2 (0.7) 26.5 66.4 Profit for the periodattributable to:Parent company equity 46.5 0.2 46.7 24.9 (0.7) 24.2 62.9holdersMinority interests 1.2 - 1.2 2.3 - 2.3 3.5Profit for the period 47.7 0.2 47.9 27.2 (0.7) 26.5 66.4 Headline profitbefore taxTrading profit 78.3 76.0 158.2Share of post-tax profit of 1.1 0.5 1.4joint venturesNet finance costs (11.2) (14.6) (28.4)Headline profit before tax 1 68.2 61.9 131.2Income tax costs (18.5) (18.7) (38.5)- ordinary activitiesProfit attributable to (1.2) (2.3) (3.5)minority interestsHeadline profit attributable 48.5 40.9 89.2to parent companyequity holders Earnings per share (pence) 11Basic 24.1 0.1 24.2 13.1 (0.4) 12.7 32.8Diluted 24.0 0.1 24.1 13.0 (0.4) 12.6 32.6 Headline earnings per share 1, 11(pence)Basic 25.2 - 25.2 18.4 3.0 21.4 46.6Diluted 25.1 - 25.1 18.3 3.0 21.3 46.3 Condensed Group Statement of Cash FlowsFor the six months ended 30 June 2007 Half year 2006 Half year restated Full year 2007 (note 2) 2006 Notes £m £m £m Cash flows from operating activitiesProfit from operations 77.5 69.0 145.2Adjustments for:Rationalisation of operating activities 2.3 8.8 34.7Profit relating to non-current assets (1.5) (1.8) (13.1)Curtailment gains relating to employee benefits - - (8.6)Depreciation 17.2 19.6 37.0EBITDA 1 95.5 95.6 195.2Net increase in trade and other working capital (82.2) (47.9) (29.2)Net operating outflow related to assets and liabilities classified (1.1) (8.8) (7.2)as held for saleOutflow related to rationalisation of operating activities 4 (8.0) (9.2) (16.1)Additional funding contributions into Group pension plans 14 (14.8) (12.8) (25.5)Cash (utilised by)/generated from operations (10.6) 16.9 117.2 Interest paid (11.0) (14.4) (28.3)Interest received 2.1 3.3 6.3Income taxes paid (12.0) (11.0) (27.5)Net cash (outflow)/inflow from operating activities (31.5) (5.2) 67.7 Cash flows from investing activitiesPurchase of property, plant and equipment (24.4) (14.6) (43.2)Proceeds from the sale of property, plant and equipment 5 4.9 2.8 16.6Acquisition of subsidiaries and joint ventures, net of cash acquired (1.1) (0.9) (4.1)Disposal of subsidiaries and joint ventures, net of cash disposed of 8, 10 22.4 56.9 59.4Dividends received from joint ventures 0.8 0.9 0.9Purchase of property classified as held for sale (9.0) - -Other investing outflows, including additional costs for prior (1.3) (2.8) (3.1)periods' disposalsNet cash (outflow)/inflow from investing activities (7.7) 42.3 26.5Net cash (outflow)/inflow before financing activities (39.2) 37.1 94.2 Cash flows from financing activitiesRepayment of borrowings 13 (12.0) (28.4) (29.9)Settlement of forward foreign exchange contracts (12.4) (7.4) (5.4)Proceeds from the issue of share capital 0.7 5.9 8.0Proceeds from the sale of treasury shares - - 0.9Dividends paid to equity shareholders 12 (13.5) (9.6) (15.4)Dividends paid to minority shareholders (1.5) (2.4) (3.0)Net cash outflow from financing activities (38.7) (41.9) (44.8)Net (decrease)/increase in cash and cash equivalents 13 (77.9) (4.8) 49.4 Cash and cash equivalents (including bank overdrafts)Cash and cash equivalents at beginning of period 105.0 63.5 63.5Effect of exchange rate fluctuations on cash and cash equivalents 0.2 (3.3) (7.9)Net (decrease)/increase in cash and cash equivalents 13 (77.9) (4.8) 49.4Cash and cash equivalents at end of period 27.3 55.4 105.0 Free cash flowNet cash (outflow)/inflow from operating activities (31.5) (5.2) 67.7Additional funding contributions into Group pension plans 14.8 12.8 25.5Purchase of property, plant and equipment (24.4) (14.6) (43.2)Proceeds from the sale of property, plant and equipment 4.9 2.8 16.6Dividends received from joint ventures 0.8 0.9 0.9Dividends paid to minority shareholders (1.5) (2.4) (3.0)Free cash flow 1 (36.9) (5.7) 64.5 Condensed Group Balance SheetAs at 30 June 2007 30 June 2006 30 June 31 Dec restated 2007 2006 (note 2) Notes £m £m £mAssetsProperty, plant and equipment 226.5 222.4 230.9Intangible assets 421.0 429.0 448.3Interests in joint ventures 11.4 11.6 11.5Investments 15.4 15.8 17.4Income tax recoverable 1.9 2.3 2.3Deferred tax assets 10.7 11.3 12.3Other receivables 8.0 9.8 12.2Total non-current assets 694.9 702.2 734.9 Cash and short-term deposits 13 47.3 111.9 60.6Inventories 192.7 171.2 177.2Trade and other receivables 344.6 303.0 315.5Income tax recoverable 0.4 1.1 1.6Derivative financial instruments 4.1 1.7 -Assets classified as held for sale 9.0 18.6 21.1Total current assets 598.1 607.5 576.0Total assets 1,293.0 1,309.7 1,310.9 EquityIssued share capital 19.4 19.3 19.3Share premium account 6.9 6.3 4.2Other reserves (24.9) (17.0) (0.1)Retained earnings 512.6 466.2 428.2Total parent company shareholders' equity 514.0 474.8 451.6Minority interests 9.3 9.4 11.2Total equity 523.3 484.2 462.8 LiabilitiesInterest-bearing loans and borrowings 13 192.3 188.1 268.4Employee benefits 14 126.7 155.1 188.8Other payables 14.5 19.5 27.1Provisions 20.9 22.5 8.1Deferred tax liabilities 23.6 21.8 21.6Total non-current liabilities 378.0 407.0 514.0 Interest-bearing loans and borrowings 13 100.0 104.3 40.9Trade and other payables 232.2 241.9 249.7Income tax payable 31.7 27.7 23.3Provisions 27.0 32.7 17.1Derivative financial instruments 0.8 6.1 0.5Liabilities directly associated with assets classified as held for - 5.8 2.6saleTotal current liabilities 391.7 418.5 334.1Total liabilities 769.7 825.5 848.1Total equity and liabilities 1,293.0 1,309.7 1,310.9 Net debtInterest-bearing loans and borrowings - non-current 192.3 188.1 268.4 - current 100.0 104.3 40.9Cash and short-term deposits (47.3) (111.9) (60.6) Net debt 1 245.0 180.5 248.7 Condensed Group Statement of Recognised Income and Expense For the six months ended 30 June 2007 Half year Half year Full year 2007 2006 2006 £m £m £m Exchange differences on translation of the net assets of foreign (11.3) (51.5) (81.1)operationsNet investment hedges 3.7 13.7 25.3Actuarial gain on employee benefits plans 11.4 19.1 21.8Change in fair value of available-for-sale investments - (0.7) 0.2Net income/(expense) recognised directly in equity 3.8 (19.4) (33.8)Profit for the period 47.9 26.5 66.4Total recognised income and expense for the period 51.7 7.1 32.6 Total recognised income and expense for the period attributable to:Parent company equity holders 50.2 5.4 29.9Minority interests in - profit for the period 1.2 2.3 3.5 - foreign exchange translation 0.3 (0.6) (0.8) differencesTotal recognised income and expense for the period 51.7 7.1 32.6 Notes to the interim financial statements 1 Basis of preparation General information These condensed interim financial statements have been prepared using the sameaccounting policies as used in the preparation of the Group's annual financialstatements for the year ended 31 December 2006. They do not include all of theinformation required for full annual financial statements, and should be read inconjunction with the consolidated financial statements of the Group for the yearended 31 December 2006. The financial information presented in this document isunaudited, but has been reviewed by the Company's auditor. The comparative figures for the financial year ended 31 December 2006 are notthe Company's statutory accounts for that financial year. Those accounts havebeen reported on by the Company's auditor and delivered to the Registrar ofCompanies. The report of the auditor was unqualified, did not include referenceto any matters to which the auditor drew attention by way of emphasis withoutqualifying its report and did not contain a statement under section 237(2) or(3) of the Companies Act 1985. These sections address whether proper accountingrecords have been kept, whether the Company's accounts are in agreement withthose records and whether the auditor has obtained all the information andexplanations necessary for the purposes of its audit. Disclosure of exceptional items International Accounting Standard ("IAS") 1, Presentation of FinancialStatements, provides no definitive guidance as to the format of the incomestatement, but states key lines which should be disclosed. It also encouragesadditional line items and the re-ordering of items presented on the face of theincome statement when appropriate for a proper understanding of the entity'sfinancial performance. In keeping with the spirit of this aspect of IAS 1, theCompany has adopted a policy of disclosing separately on the face of itsCondensed Group Income Statement the effect of any components of financialperformance considered by the Directors to be exceptional, or for which separatedisclosure would assist both in a better understanding of the financialperformance achieved and in making projections of future results. Bothmateriality and the nature and function of the components of income and expenseare considered in deciding upon such presentation. Such items may include, interalia, the financial effect of any profits or losses arising on businessdisposals, major rationalisation or restructuring activity, curtailment gains orlosses relating to employee benefits, profits or losses on sale or impairment ofnon-current assets and other items, including the taxation impact of theaforementioned items, which have a significant impact on the Group's results ofoperations either due to their size or nature. Non-GAAP financial measures The Company uses a number of non-Generally Accepted Accounting Practice ("non-GAAP") financial measures in addition to those reported in accordance withIFRS. Because IFRS measures reflect all items which affect reported performance,the Directors believe that certain non-GAAP measures, which reflect their viewof the underlying performance of the Group, are important and should beconsidered alongside the IFRS measures. The following non-GAAP measures arereferred to in this report. (a) Net sales value Net sales value is calculated as the total of revenue less the amount includedtherein related to any precious metal component. The Directors believe that netsales value provides an important measure of the underlying sales performance ofthe Group's Precious Metals division. (b) Return on sales and return on net sales value Return on sales is calculated as trading profit divided by revenue. Return onnet sales value is calculated as trading profit divided by net sales value. TheDirectors believe that return on sales provides an important measure of theunderlying trading performance of the Group and the Group's Ceramics andElectronics divisions and that return on net sales value provides an importantmeasure of the underlying trading performance of the Group's Precious Metalsdivision. (c) Organic revenue growth Organic revenue growth, from a prior period comparative to the current period,is calculated after having adjusted the revenue of the comparative period sothat it is stated using the same exchange rates as used in the current periodand, for those businesses for which metals are a key raw material (notably fortin, gold and silver), the same average metal prices as incurred in the currentperiod. In addition, revenue related to current period acquisitions is removedand, for any business disposals or significant business closures, the comparatorperiod revenue is adjusted such that both current and comparator period have acomparable period of revenue contribution from those businesses. The Directorsbelieve that organic revenue growth gives an important measure of the underlyingrevenue generation capacity of the Group. (d) Trading profit Trading profit, defined as profit from operations before the costs ofrationalisation of operations, the profit or loss relating to non-current assetsand curtailment gains or losses relating to employee benefits, is separatelydisclosed on the face of the Condensed Group Income Statement. The Directorsbelieve that trading profit is an important measure of the underlying tradingperformance of the Group. (e) EBITDA EBITDA is calculated as the total of trading profit before depreciation andamortisation charges. The Directors believe that EBITDA provides an importantmeasure of the underlying financial performance of the Group. (f) Headline profit before tax Headline profit before tax is calculated as the net total of trading profit,share of post-tax profit of joint ventures and net finance costs, excluding anycomponent of net finance costs considered to be exceptional by the Directors.The Directors believe that headline profit before tax provides an importantmeasure of the underlying financial performance of the Group. (g) Headline earnings per share Headline earnings per share is calculated as the total of headline profit beforetax, income tax costs associated with ordinary activities and profitattributable to minority interests, divided by the weighted average number ofordinary shares in issue during the period. The Directors believe that headlineearnings per share provides an important measure of the underlying earningcapacity of the Group. (h) Free cash flow Free cash flow, defined as net cash flow from operating activities after netoutlays for the acquisition and disposal of non-current assets, dividends fromjoint ventures and dividends paid to minority shareholders, but beforeadditional funding contributions into Group pension plans, is disclosed on theface of the Condensed Group Statement of Cash Flows. The Directors believe thatfree cash flow gives an important measure of the underlying cash generationcapacity of the Group. (i) Net debt Net debt comprises the net total of current and non-current interest-bearingloans and borrowings and cash and short-term deposits. The Directors believethat net debt is an important measure as it shows the Group's aggregate netindebtedness to banks and other external financial institutions. 2 Restatement of comparative information During 2006, the Directors continued to assess the detailed impact of IFRS onthe presentation of the Group's consolidated financial statements and, as aconsequence, made changes to the accounting treatment and presentation ofcertain items in the Group's consolidated financial statements for 2006. Two ofthose changes, namely those relating to the presentation of the interest costand expected returns associated with the Group's defined benefit pension andother post-retirement benefit plans and the amortisation and impairment ofintangibles, had already been made in the Group's 2006 Interim Report. The otherchanges, which are explained below, are reflected in this report as restatementsof the comparative information for the six months ended 30 June 2006. Disposal of businesses from continuing operations In the Group's Interim Report for 2006, the loss on disposal of operations whichwere not classified as discontinued operations due to their size and importance,was calculated post-tax and presented on the face of the Condensed Group IncomeStatement below income tax costs. In this report, profits and losses on disposalof continuing operations are reported pre-tax as a separate line item belowprofit from operations and before profit before tax. Comparative figures for2006 have been restated accordingly, such that a loss on disposal of continuingoperations of £1.5m has been reported in arriving at profit before tax; profitbefore tax has reduced by £1.5m; income tax costs on exceptional items haveincreased by £0.2m and profit for the period is unchanged. This change inaccounting treatment, which the Directors believe provides the user of thefinancial statements with more relevant information in relation to the resultsfrom continuing operations, has no impact upon the Group's previously reportednet cash flows, financial position, total recognised income and expense orearnings per share. Cash flows from financing activities In the Group's Interim Report for 2006, cash flows resulting from the settlementof forward foreign exchange contracts were disclosed within the Condensed GroupStatement of Cash Flows as a component of cash flows from operating activities.The Directors believe that such items should more appropriately be presented asa component of cash flows from financing activities and comparative figures for2006 have been restated accordingly. This change in presentation has no impactupon the Group's previously reported net cash flows, financial position, totalrecognised income and expense or earnings per share. Bank overdrafts In the Group's Interim Report for 2006, bank overdrafts were disclosed withinthe Condensed Group Balance Sheet as a component of cash and cash equivalents.The Directors believe that such items should more appropriately be presented asa component of interest-bearing loans and borrowings and comparative figures for2006 have been restated accordingly. This change in presentation has no impactupon the Group's previously reported net cash flows, financial position, totalrecognised income and expense or earnings per share. Investments In the Group's Interim Report for 2006, certain assets held in Rabbi Trusts weredisclosed in the Condensed Group Balance Sheet as a component of other financialassets. The Directors believe that such items should more appropriately bepresented within non-current investments and comparative figures for 2006 havebeen restated accordingly. This change in presentation has no impact upon theGroup's previously reported net cash flows, financial position, total recognisedincome and expense or earnings per share. 3 Segment information For reporting purposes the Group is organised into three main business segments,Ceramics, Electronics and Precious Metals, which form the basis of thedisclosures below. Segment revenue represents revenue to external customers andsegment results include items directly attributable to a segment as well asthose items that can be allocated on a reasonable basis. The impact ofacquisitions in the period was not material. Half year 2007 Half year 2006 Full year 2006 Revenue Profit Revenue Profit Revenue Profit £m £m £m £m £m £m Ceramics 386.1 52.6 383.5 42.6 756.6 89.5Electronics 269.4 26.8 281.0 27.1 554.7 58.5- Assembly Materials 153.8 12.9 161.9 12.7 319.3 28.2- Chemistry 115.6 13.9 119.1 14.4 235.4 30.3Precious Metals 129.4 3.1 138.8 4.3 278.3 11.0Corporate costs (4.1) (4.3) (8.7)Continuing operations 784.9 78.4 803.3 69.7 1,589.6 150.3Discontinued operations 1.5 (0.1) 62.2 6.3 71.8 7.9Group trading profit 78.3 76.0 158.2Rationalisation of operating (2.3) (8.8) (34.7)activitiesProfit relating to non-current 1.5 1.8 13.1assetsCurtailment gains relating to - - 8.6employee benefitsTotal Group 786.4 77.5 865.5 69.0 1,661.4 145.2 Of the total cost of rationalisation of operating activities of £2.3m (2006:half year £8.8m; full year £34.7m), £0.2m related to Ceramics (2006: half year£5.7m; full year £22.9m), £0.6m to Electronics (2006: half year £2.9m; full year£8.7m) and £1.5m to Precious Metals (2006: half year £0.2m; full year £2.4m). Inthe full year 2006, a further £0.1m related to discontinued operations and £0.6mto corporate activities. Of the Electronics costs of £0.6m, £0.1m related toAssembly Materials (2006: half year £1.9m; full year £7.0m) and £0.5m toChemistry (2006: half year £1.0m; full year £1.7m). Of the total profit relating to non-current assets of £1.5m (2006: half year£1.8m; full year £13.1m), £0.2m related to Ceramics (2006: half year nil; fullyear £0.1m loss), and £1.3m related to Electronics (2006: half year £1.4m; fullyear £14.3m). In 2006, corporate activities contributed a profit of £0.4m at thehalf year and a loss of £1.1m in the full year. Of the Electronics profit of£1.3m, £1.6m related to Assembly Materials (2006: half year £1.4m; full year£1.5m) and a loss of £0.3m to Chemistry (2006: half year nil; full year £12.8m). 4 Rationalisation of operating activities The rationalisation of operating activities charge of £2.3m (2006: half year£8.8m; full year £34.7m) represents the cost of a number of initiativesthroughout the Group aimed at reducing the Group's cost base and re-aligning itsmanufacturing capacity. Cash costs of £8.0m were incurred in the first half of2007 (2006: half year £9.2m; full year £16.1m) in respect of the rationalisationand redundancy initiatives commenced both in this period and in prior periods. 5 Profit relating to non-current assets The disposal of non-current assets during the first six months of 2007 generatedcash proceeds of £4.9m (2006: half year £2.8m; full year £16.6m) and resulted ina profit of £1.5m (2006: half year £1.8m; full year £13.1m). 6 Curtailment gains relating to employee benefits Curtailment gains of £8.6m arose in the full year results for 2006, resultingfrom reductions in liabilities arising from the closure of the Group's twolargest US defined benefit pension plans to new members and the freezing of thebenefits of existing members therein, together with reductions in the level ofbenefits provided through certain of the Group's US post-retirement healthcareplans. 7 Finance costs and finance income Included within finance costs is the interest cost associated with theliabilities of the Group's defined benefit pension and other post-retirementbenefit plans of £12.9m (2006: half year £12.9m; full year £26.1m) and includedwithin finance income is the expected return on the assets of the Group'sdefined benefit pension plans of £11.6m (2006: half year £10.6m; full year£19.6m). 8 Net profit/(loss) on disposal of continuing operations The net profit on disposal of continuing operations of £0.2m (2006: half year£1.5m loss; full year £4.7m loss) principally comprised a profit on disposal ofa refractory brick-making business in the US, which was formerly part of theCeramics division, partially offset by additional costs relating to prior years'disposals. The loss reported in the half year and full year of 2006 arose on the disposalof a number of businesses from the Ceramics and Electronics divisions. The taxcharge associated with these disposals was £0.2m in the first half and £0.6m inthe full year and is included within income tax costs relating to exceptionalitems (note 9). 9 Income tax costs The total charge for income tax of £20.0m (2006: half year £20.5m; full year£43.8m) comprises a tax charge on ordinary activities of £18.5m (2006: half year£18.7m; full year £38.5m), together with a £1.5m (2006: half year £1.8m; fullyear £5.3m) charge relating to exceptional items. The effective tax rate for theperiod of 27.5% (2006: half year 32.8%; full year 31.3%) relates to continuingoperations and is calculated by reference to the income tax cost on ordinaryactivities of £18.5m (2006: half year £18.1m; full year £38.2m) and headlineprofit before tax excluding the Group's share of post-tax joint venture incomeof £67.2m (2006: half year £55.1m; full year £121.9m). The total charge relatingto exceptional items includes a charge of £1.7m (2006: half year £1.7m; fullyear £3.1m) relating to deferred tax on goodwill, a credit of £0.3m (2006: halfyear £0.4m; full year £2.1m) in relation to rationalisation costs and a chargeof £0.1m (2006: half year £0.3m; full year £3.7m) in relation to non-currentassets. Additionally in 2006, tax charges arose on the net profit/(loss) ondisposal of continuing operations of £0.2m for the half year and £0.6m for thefull year. 10 Net post-tax profit/(loss) on disposal of discontinued operations The net post-tax profit on disposal of discontinued operations of £0.3mprincipally arose on the disposal of Monofrax Inc., a US-based manufacturer offused-cast refractory products, which represented a separate major line ofbusiness within the Ceramics division, partially offset by additional costsrelating to prior years' disposals of discontinued operations. The net profit ondisposal, which is subject to completion adjustments, is stated after a goodwillwrite-off of £4.3m. The net post-tax loss on disposal of discontinued operations of £6.4m in thefirst half of 2006 related to the completion of the disposal of the Group'sLaminates business. Of the £3.3m post-tax loss on disposal of discontinuedoperations in the full year 2006 results, £5.8m related to the disposal of theLaminates business, £0.2m of additional costs were incurred in relation to thedisposal in 2005 of the Group's Specialty Coating Systems ("SCS") business and aprofit of £2.7m arose in relation to additional consideration receivable inrespect of the disposal of the Group's Speedline business in 2003. 11 Earnings per share ("EPS") EPS and headline EPS are calculated using a weighted average number of ordinaryshares of 192.8m (2006: half year 190.8m; full year 191.5m). For the purposes ofcalculating diluted EPS, the weighted average number of ordinary shares isadjusted to include the weighted average number of ordinary shares that would beissued on the conversion of all dilutive potential ordinary shares. Potentialordinary shares are only treated as dilutive when their conversion to ordinaryshares would decrease earnings per share, or increase loss per share, fromcontinuing operations. The fully diluted weighted average number of ordinaryshares in issue during the period was 193.4m (2006: half year 192.1m; full year192.8m). 12 Dividends Half year Half year Full year 2007 2006 2006 £m £m £m Amounts recognised as distributions to equity holders during the period:Final dividend for 2006 of 7.0p per ordinary share 13.5 - -Interim dividend for 2006 of 3.0p per ordinary share - - 5.8Final dividend for 2005 of 5.0p per ordinary share - 9.6 9.6Total dividends paid in the period 13.5 9.6 15.4 The Directors have declared an interim dividend of 4.25p per ordinary share(2006: 3.0p) in respect of the year ending 31 December 2007. The dividend willbe paid on 15 October 2007 to ordinary shareholders on the register at 28September 2007. Based upon the number of ordinary shares in issue at 30 June2007, the total cost of the dividend would be £8.2m (2006: £5.8m). 13 Borrowings Balance at Foreign Balance at 1 January exchange Non-cash 30 June 2007 adjustment Acquisitions movements Cash flow 2007 £m £m £m £m £m £mCash and cash equivalentsShort-term deposits 68.0 (0.2) - - (67.8) -Cash at bank and in hand 43.9 0.4 - - 3.0 47.3Bank overdrafts (6.9) - - - (13.1) (20.0) (77.9) Borrowings, excluding bank overdraftsCurrent (97.4) 1.3 (2.5) - 18.6 (80.0)Non-current (188.8) 2.6 - - (6.6) (192.8)Capitalised borrowing costs 0.7 - - (0.2) - 0.5 12.0 Net debt (180.5) 4.1 (2.5) (0.2) (65.9) (245.0) 14 Employee benefits The balance of £126.7m in respect of employee benefits as at 30 June 2007results from an interim actuarial valuation of the Group's defined benefitpension and other post-retirement obligations as at that date (31 December 2006:£155.1m; 30 June 2006: £188.8m) and comprises the following arrangements: 30 June 31 Dec 30 June 2007 2006 2006 £m £m £m Defined benefit deficitUK defined benefit pension plan 62.4 78.3 96.2US defined benefit pension plans 29.9 39.8 48.7ROW defined benefit pension plans 12.8 13.6 15.0Other post-retirement benefit obligations, mainly US healthcare 21.6 23.4 28.9arrangementsEmployee benefits 126.7 155.1 188.8 For valuation purposes, the discount rates used were 5.82% for the UK (31December 2006: 5.12%; 30 June 2006: 5.22%) and 6.30% for the US (31 December2006: 5.89%; 30 June 2006: 6.32%). The mortality assumptions used in the Group'sactuarial valuations at 30 June 2007 were consistent with those used as at 31December 2006 as detailed in the Group's 2006 Annual Report. The reduction of £15.9m in the deficit of the UK pension plan resulted mainlyfrom additional funding contributions made in the period, the stabilising impactof the plan's investment strategy having resulted in the effects of the discountrate and inflation rate assumption changes on the plan liabilities being largelycompensated for by the change in value of the interest rate and inflation swapstaken out under the strategy. As expected, this investment strategy has led to asignificant reduction in the risk that the value of the plan's assets fallsmaterially relative to the liabilities, thus increasing the overall stability ofthe IAS 19 funding ratio of the plan (the ratio of plan assets to planliabilities), which was 82% as at 30 June 2007 (78% as at 31 December 2006). The reduction of £9.9m in the deficit of the US pension plans resulted mainlyfrom the increase in the discount rate. The deficit of £29.9m in respect of theUS pension plans as at 30 June 2007 does not reflect assets of £8.1m which areheld in Rabbi Trusts in order to satisfy certain of the underlying USliabilities, but which may not be reported as pension assets under IFRS. In addition to the regular funding contributions into the Group's UK definedbenefit pension plan, in agreement with the plan Trustee, the Company has madeadditional funding contributions aimed at accelerating the reduction in the plandeficit. Additional contributions of £14.8m were made in the six months ended 30June 2006 (2006: half year £12.8m; full year £25.5m). The total charge against trading profit in the income statement for the sixmonths to 30 June 2007 in respect of the Group's defined benefit pension andother post-retirement obligations was £3.6m (2006: half year £5.1m; full year£8.8m). 15 Exchange rates The Group reports its results in pounds sterling. A substantial portion of theGroup's revenue and profits are denominated in currencies other than poundssterling. It is the Group's policy to translate the income statements and cashflow statements of its overseas operations into pounds sterling using averageexchange rates for the period reported (except when the use of average ratesdoes not approximate the exchange rate at the date of the transaction, in whichcase the transaction rate is used) and to translate balance sheets using periodend rates. The principal exchange rates used were as follows: Period end rates of exchange Average rates of exchange for the period 30 June 30 June 31 Dec Half year Half year Full year 2007 2006 2006 2007 2006 2006 US dollar ($ per £) 2.01 1.85 1.96 1.97 1.79 1.84Euro (• per £) 1.48 1.45 1.48 1.48 1.46 1.47 Singapore dollar (S$ per £) 3.07 2.92 3.00 3.01 2.88 2.92Chinese renminbi (RMB per £) 15.3 14.8 15.3 15.2 14.4 14.7South African rand (ZAR per £) 14.1 13.2 13.8 14.1 11.3 12.5Japanese yen (Y per £) 247 211 233 237 207 214 This information is provided by RNS The company news service from the London Stock Exchange

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