Financial review of operations
for the six months ended 30 June 2005 (continued)
| |
2004
Revenue
six months
ended
30 June
|
|
Effect of
exchange
rates
|
|
Acquisitions/
disposals
|
|
Increase/
(decrease)
|
|
2005
Revenue
six months
ended
30 June
|
|
|
£million
|
|
£million
|
|
£million
|
|
£million
|
|
£million
|
|
 |
| Specialties |
64.0
|
|
(2.2
|
)
|
32.3
|
|
(1.2
|
)
|
92.9
|
|
|
|
| Pigments |
40.0
|
|
(0.6
|
)
|
7.5
|
|
(0.3
|
)
|
46.6
|
|
|
| Chromium |
53.1
|
|
(1.3
|
)
|
-
|
|
10.2
|
|
62.0
|
|
|
|
| Specialty Rubber |
22.7
|
|
0.1
|
|
-
|
|
1.2
|
|
24.0
|
|
|
| Inter-company |
(3.0
|
)
|
0.1
|
|
-
|
|
1.0
|
|
(1.9
|
)
|
|
|
| |
176.8
|
|
(3.9
|
)
|
39.8
|
|
10.9
|
|
223.6
|
|
|
Specialties
Revenue at Specialties was £28.9 million higher than the previous year at £92.9 million. The Servo acquisition added £33.0 million to revenue while currency movements reduced it by £2.2 million. Excluding the effects of currency and acquisitions, revenue was 2 per cent lower than the previous year. Prices improved by 4 per cent versus the first half of 2004, but volumes were around 6 per cent lower due to softer demand in the coatings sector in both Europe and North America.
Operating profit before exceptional items was £0.7 million lower than the first half of 2004 at £6.4 million. Lower sales volumes were compensated by higher prices and the Servo acquisition added £1.3 million to operating profit. In addition, the revaluation of Hectorite ore at its mine in California contributed £0.8 million to its result in the first half of 2005. Fixed costs were higher than the previous year and this will be addressed in the second half of 2005 by the announced rationalisation at Servo and the reduction in central administration costs.
Pigments
Revenue at Pigments for the first half of 2005 was £6.6 million higher than the previous year at £46.6 million. Excluding the Servo acquisition, which added £7.5 million of sales and the effects of currency, revenue was essentially flat. Prices improved by around 6 per cent but were offset by lower volumes due to softer demand in the coatings sector in both Europe and North America.
Operating profit before exceptional items was £0.3 million higher than the first half of 2004 at £0.3 million. Higher selling prices more than offset the effects of lower volumes, but energy and raw material cost inflation, which was particularly evident in the second half of 2004, had a dampening effect. The Servo acquisition contributed around £0.7 million to operating profit.
Financial review of operations continues on the next page >
[Page 2 of 5]
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