Cookson improves margins despite rising costs

Cookson, the FTSE 250 materials science firm, has reported a rise in revenue, margins and pre-tax profit in the year ended December 31st, despite increasing raw materials prices.

Revenue rose 11% at reported rates (9% at constant currency rates) from £2,546m to £2,826m, which the group says is partly down to the passing through of significantly higher metals prices for tin, silver and gold.

Return on sales at 10.3% compared 9.9% the previous year. If metals prices had remained at average 2010 levels, the margin would have been 10.9%. Meanwhile, basic profit before tax increased 12% from £189.4m to £211.6m.

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The company said that it is making good progress on its return on sales margin target of 12% by 2013 (at constant metal prices).

The dividend per share was increased from 11.50p to 21.75p.

In a statement the firm said: "While the macro-economic outlook remains uncertain, feedback from our customers and third party industry forecasters continues to indicate mid-single digit growth globally in our main end-markets in 2012, with generally weaker demand in Europe offset by continued growth in the Americas and Asia-Pacific.

"Both our Engineered Ceramics and Performance Materials divisions are well positioned to deliver further performance improvement based on their global market coverage, strong presence in higher growth developing markets, leading technologies and strong new product pipelines, high technical service element and value selling competence. The board is confident of the group's ability to achieve further progress in the current year towards its 2013 targets."

Net debt increased from £329.7m to £363.9m, while free cash flow at the year-end rose from £63.7m to £90.1m.

The firm also announced that Steve Corbett, who is already President and Chief Executive Officer of Cookson's Performance Materials division, is set to join the board as Executive Director from May 1st.

The share price rose 3.36% to 693.00p by 14:24.

NR