Press Information

17 February 2005

Preliminary results for the year ended 31 December 2004

• Dr. Kevin Matthews appointed to Board of Elementis as a non-executive director
• Elementis Chromium announces price increases

Financial Highlights

• Sales £389.2 million (2003: £368.2 million)
• Operating profit before goodwill amortisation and exceptionals £11.8 million (2003: £24.5 million)
• Profit before tax, goodwill amortisation and exceptionals £6.2 million (2003: £18.3 million)
• Earnings per share before goodwill amortisation and exceptionals 1.4p (2003: 3.0p)
• Operating loss £2.5 million (2003: profit of £10.9 million)
• Loss before tax £7.8 million (2003: profit of £5.5 million)
• Basic loss per share 1.8p (2003: earnings of 1.0p)
• Net year end borrowings £90.2 million including £36.3 million for the acquisition of Sasol Servo (2003: £46.9 million)
• Net year end gearing 30 per cent* (2003: 16 per cent*)
  
  *ratio of net borrowings to shareholders' funds plus net borrowings

Business Highlights

• By January 2005 Chromium chemicals prices up 25 per cent from late 2003 low point
• Volumes and prices up in Specialties, Pigments and Specialty Rubber
• Accelerated sales growth and increased synergy expectations in Specialties
• Chinese Pigments plant complete and commissioning underway
• Specialty Rubber restored to profitability

Geoff Gaywood, Chief Executive of Elementis plc, said:
"Although external conditions were exceptionally challenging, 2004 has seen the implementation of the major transformational steps in the Elementis strategy."

"The chromium chemicals market turned and by January 2005 prices had reached their highest level since 2001. This positive trend is expected to continue. Specialties completed a key acquisition, the successful integration of which, together with geographical expansion and new product introductions drove a 37 per cent sales increase in US dollar terms. Our new world-scale Pigments plant in China is complete and will transform the cost base of this business. Specialty Rubber has demonstrated its performance potential and we have now begun the process of considering the strategic options for this business."

"However, rapidly escalating energy, raw material and freight costs, adverse currency movements and extreme weather conditions in Northern and Central America have hampered performance and eroded profitability. Higher variable costs and a weak US dollar are likely to remain a challenge in 2005 and are the subject of intense management focus."

"Current trading conditions are characterised by good demand in all business sectors and a general upward movement in prices with the benefits of the structural improvements implemented during 2004 expected to become increasingly apparent during 2005. We anticipate progressive price increases in chromium chemicals, supported by expanding demand and a tightening of global supply; organic growth in Specialties and cost savings ahead of plan from the Sasol Servo acquisition; significant cost benefits from the new Chinese pigments plant; further strong sales growth at Specialty Rubber and operational efficiencies as a result of the implementation of the ERP system."

Download full results in Adobe Acrobat® format [465 Kb]

An interview with Geoff Gaywood in video/audio format can be viewed on www.elementis.com and www.cantos.com from 0700 hours GMT.

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