18th Dec 2007 07:01
Cookson Group PLC18 December 2007 18 December 2007 PRE-CLOSE PERIOD TRADING UPDATE - IN LINE WITH UPPER END OF EXPECTATIONS Cookson Group plc ("Cookson" or "the Group"), a leading materials sciencecompany, issues its pre-close trading update ahead of its 2007 full year resultsexpected to be announced on 11 March 2008. Highlights • Full year results expected to be at the upper end of expectations; • Good progress to date on proposed Foseco acquisition, in accordance with our original timetable. Trading Update Group • Market conditions have been in line with our expectations indicated at the time of the Interim Results and our businesses have performed well within these markets; • The negative currency translation impact of the weaker US dollar in the second half year has been largely offset by the strengthening against sterling of other currencies, notably the euro, in which the Group generates significant profits. Ceramics Global steel production continues to show good growth and is expected to growaround 6% in the second half of 2007 (versus the second half of 2006). Asanticipated, there has been a slowing down in production in Europe partiallyoffset by a pick-up in North America, with continued strong growth inAsia-Pacific. The International Iron and Steel Institute ('IISI') is forecasting6.8% global steel production growth for 2008 (Source: IISI Short Range Outlook -October 2007). Underlying revenue growth for the division in the second half of2007 has continued to run ahead of global steel production. Demand for fusedsilica products, particularly Solar CruciblesTM, has shown high growth withoutput from our new plants in China and Poland ramping up sharply. The division's performance has continued to improve in the second half -measured both against the first half of 2007 and the second half of 2006 -helped, in particular, by a further margin improvement in the Linings business.Return on sales for the division is expected to lie within the 14% to 16% targetrange (as announced in August 2007) for the second half of 2007. Electronics The normal seasonal trend for the division is for higher revenue and tradingprofit in the second half of the year versus the first half, driven by increaseddemand for consumer electronics in the second half. The Assembly Materials sector continues to benefit from growing demand forhigher-margin products, particularly SACXTM - the low-silver content lead-freesolder - and Solder Pastes, which are benefiting from the continuing shift fromwave soldering to surface mount technology. The growth in these higher-marginproducts is expected to result in an improved underlying trading performance,compared to both the first half of 2007 and the second half of 2006. The Chemistry sector saw a continuation of the first half revenue trends withgood growth in plating-on-plastics and corrosion and wear-resistant coatingsproducts for industrial and automotive markets, but weaker growth in surfacefinish products serving the printed circuit board fabrication market withinelectronics. Semi-conductor related product lines saw slightly better demand inthe second half. Underlying trading performance in the second half is thereforeexpected to be better than the first half of 2007, but marginally behind thesecond half of 2006. Given the above, for the division as a whole, the normal seasonal trend ofhigher revenue and trading profit in the second half of the year versus thefirst half is again expected in 2007. Precious Metals While retail jewellery markets in the US and Europe have remained weak,underlying trading performance is expected to be well ahead of the first half,reflecting the normal seasonality of the business, and in line with the secondhalf of 2006. Outlook Our end-markets are currently showing good growth and the outlook for worldwidesteel production, in particular, remains robust. Going forward we also expectto benefit from the investment and restructuring programmes initiated over thelast few years. Assuming current market conditions are maintained in 2008, thencontinued substantial improvement in the Group's performance is anticipated. Foseco Acquisition When the proposed acquisition of Foseco plc ("Foseco") was announced on 11October, it was stated that completion was expected in the first half of 2008and was conditional, amongst other things, on receipt of anti-trust clearancesin the US and EU and approval of both companies' shareholders. The intention todispose of Foseco's Carbon Bonded Ceramics ("CBC") business to expediteanti-trust clearances was also announced. Good progress on these matters isbeing made in accordance with our original timetable, and has included thefollowing: a. The Foseco Scheme of Arrangement document was issued to its shareholders on 8 November 2007. This document indicated a target date for the Foseco EGM of 10 March 2008 and closing of the deal on 4 April 2008, subject to amendment if the anti-trust clearances were not obtained by that date; b. The Cookson Class 1 Circular is expected to be issued to its shareholders on 19 December 2007; c. The anti-trust reviews in the US and EU are progressing well, albeit that these are at an early stage. Initial submissions have been made to, and discussed with, the United States Department of Justice. The European Union 'Form CO' has been submitted in draft form and is under discussion; d. The process to find a buyer for Foseco's CBC business is progressing well with offers now under consideration; e. Cookson's new multi-currency debt facility of approximately £950 million was successfully syndicated to an additional group of twelve banks on 4 December. The syndication was oversubscribed, despite the current tight credit market, reflecting the banking group's support for the acquisition; f. Work on the integration planning is ongoing. We continue to expect the acquisition of Foseco to be completed in the firsthalf of 2008. - Ends - For further information please contact Shareholder/analyst enquiries:Nick Salmon, Chief Executive Cookson Group plcMike Butterworth, Group Finance Director Tel: + 44 (0)20 7822 0000Anna Hartropp, Investor Relations Manager Media enquiries:John Olsen Hogarth Partnership Tel: +44 (0)20 7357 9477 + 44 (0)7770 272082 About Cookson Group plc: Cookson Group plc is a leading materials science company operating on aworldwide basis in Ceramics, Electronics and Precious Metals markets. The Ceramics division is the world leader in the supply of advanced flow controlrefractory products and systems to the global steel industry and a leadingsupplier of specialist ceramics products to the glass, solar and foundryindustries. It is also the regional leader in the US, UK and Australia in thesupply and installation of monolithic refractory linings. The Electronics division is a leading supplier of advanced surface treatment andplating chemicals and assembly materials to the automotive, industrial,construction and electronics markets. The Precious Metals division is a leading supplier of fabricated precious metals(primarily gold, silver and platinum) to the jewellery industry in the US, theUK, France and Spain. Products include alloy materials, semi-finished jewellerycomponents and finished jewellery. 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. Such forwardlooking 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 2AERegistered in England and Wales No. 251977www.cooksongroup.co.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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