Specialities and Pigments
Sales in Specialties and Pigments were £104.0 million in the first half of 2004, 4 per cent lower than the same period last year. On a constant currency basis, and after allowing for businesses disposed in the previous year, sales increased by 4 per cent.

Operating profit before goodwill and exceptionals was £7.2 million versus £9.7 million in the same period last year.

Sales in Specialties in the first half of 2004 were down 4 per cent versus the first half of 2003, while on a constant currency basis they were up 3 per cent. Volumes were up 8 per cent largely due to new business in the growing but lower margin markets in Asia, Latin America and the Middle East. Additional sales to some larger customers where rebates are more prominent had a mitigating effect on realised sales values and margins. Prices improved in some key sectors, but were on average at levels similar to the previous year.

Operating profit was lower than the first half of 2003. Higher constant currency sales were offset by higher energy, raw material and freight costs, as well as planned spending increases in innovation and ERP implementation costs. Currency also negatively impacted operating profit.

Sales in Pigments for the first half of 2004 were 4 per cent lower than the previous year. On a constant currency basis, and after allowing for businesses disposed in the previous year, sales were up 7 per cent. Volumes improved by 4 per cent and prices improved in key sectors.

Operating profit was lower than the first half of 2003. Higher sales on a constant currency basis were offset by higher raw material costs, while the impact from energy and currency was relatively small.

Financial review of operations continues on the next page >
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