2004		2004		2004		2003		2003	2003
	Sales		Operating profit before goodwill amortisation and exceptionals		Operating loss after goodwill amortisation and exceptionals		Sales		Operating profit before amortisation and exceptionals	Operating profit after goodwill amortisation and exceptionals
	£million		£million		£million		£million		£million	£million
Specialties and Pigments	104.0		7.2		1.6		108.1		9.7	2.0
Chromium	53.1		(1.3	)	(2.3	)	62.4		4.8	5.4
Specialty Rubber	22.7		(0.2	)	(0.2	)	21.2		-	(0.1	)
Inter-group	(3.0	)	-		-		(3.0	)	-	-
	176.8		5.7		(0.9	)	188.7		14.5	7.3

Financial results
Sales for the first half of 2004 were £176.8 million, 6 per cent lower than the same period in 2003. On a constant currency basis, and after allowing for businesses disposed in the previous year, net sales increased by 1 per cent. A 4 per cent improvement in Specialties and Pigments and a 7 per cent increase in Specialty Rubber was offset by a 7 per cent decline in Chromium.

Sales volumes increased by 3 per cent with increases in Specialties and Pigments and Specialty Rubber being offset by lower volumes in Chromium. In terms of geography, lower volumes in North America and Europe, largely due to the loss of CCA business in the US and the effect of price increases in Chromium, were more than offset by increased volumes into Asia and the Rest of the World.

Operating profit before goodwill amortisation and exceptionals was £8.8 million (61 per cent) below the same period last year at £5.7 million. The improvement in constant currency sales was offset by increases in raw material and freight costs of around £3.0 million and increases in energy costs of £1.6 million. The weaker US dollar was largely responsible for adverse currency movements, which reduced operating profit by £2.7 million. The first half of 2004 also included planned spending increases on the Group's ERP implementation and the Innovation programme in Specialties.

Profit before tax, goodwill and exceptionals was £3.1 million versus £11.4 million in the first half of 2003, while basic earnings per share were 0.6p versus 2.0p last year, largely due to lower operating profit.

The Group recorded a loss after tax of £3.1 million for the period versus a profit of £4.2 million in the first half of 2003. This was after charging goodwill amortisation of £5.6 million (2003: £6.3 million) and exceptional items of £1.0 million (2003: £0.1 million).

The Group's basic earnings per share was a loss of 0.7p in the current period versus basic earnings per share of 1.0p in the first half of 2003.

Financial review of operations continues on the next page >
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