| Strong results from cookson |
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2007 was another year of good progress for the Cookson Group, driven by a continued strong improvement in the Ceramics division's performance. Group revenue from continuing operations increased by 6% and trading profit grew 17% at constant exchange rates. Headline profit before tax increased by 14% and strong profit growth in lower tax jurisdictions resulted in a lower tax charge. As a result, headline earnings per share were up 17% to 54.3 pence. Net debt at 31 December 2007 was £51 million (2006: £181 million), having raised £151 million from the share placing in October. The worldwide pension deficit reduced from £155 million to £96 million, reflecting cash contributions of £45 million and favourable discount rate movements. Ceramics division The division’s underlying revenue increased by 11% to £781 million. Trading profit increased 25% to £109.4 million and the return on sales margin for the second half of 2007 reached 14.4%, consistent with the new margin target range of 14% to 16% announced last August. Global steel production, our main end-market, grew 8% in 2007 and our underlying revenue growth exceeded steel production growth in all regions. Sales of our market-leading steel flow control products, used in the enclosed continuous casting process, grew 9% to £372 million. Linings activity worldwide grew 11% to £310 million, with particularly strong growth in NAFTA. Worldwide, the linings margin reached 7.7% (pre divisional and central cost allocations), up from 5.8% in 2006. Fused silica revenue grew 23% to £52 million driven by a 50% rise in sales of Solar Crucibles™, reflecting the continuing strong growth rates in the worldwide production of photovoltaic (or solar) cells. Production capacities are being expanded in the higher-growth products and regions. In 2007, two new Solar Crucible™ plants were completed, one in Poland and one in China and work has started on building three more (one in the Czech Republic and two more in China). Also in 2007, new slide-gate (steel flow control) facilities in Mexico and Poland were completed, linings production in India and Mexico was expanded, and a local supplier of linings products in China was acquired which gives us a base from which to expand linings operations in Asia. Several further expansion projects were announced for completion in 2008, including foundry crucible facilities in China and Mexico and VISO™ (steel flow control) facilities in China and Europe. Commenting on the Group’s results and outlook, Nick Salmon, Chief Executive, said: “2007 was another year of good progress for the Group. This was driven by a continued strong improvement in the Ceramics division, which produced almost two-thirds of the Group's trading profit for the year. Ceramics will be further enhanced by the acquisition of Foseco, which we expect to complete next month. “The positive end-market trends experienced by Ceramics over the second half of last year have continued and we are increasing production capacities in the higher-growth products and regions. In Electronics, we expect some slowing of growth rates for consumer electronics, but have been implementing efficiency improvements to offset this. Precious Metals faces a weak retail environment, but its performance should be helped by recent and ongoing significant cost base reductions. “We therefore anticipate a continuing strong performance in 2008.” |
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