Cookson warns of subdued second half

Industrial materials science firm Cookson fell lower on Thursday after it said it expects the overall performance in the second half to be lower than the first.

However, the group - which operates in the Ceramics, Electronics and Precious Metals markets - assured that its full-year results will still be "substantially ahead" of 2010: "2011 should be another year of strong progress", the statement said.

In the Ceramics division, Cookson expects some moderate softening in steel production volume trends for the rest of the year, particularly in Europe, but the group said that it has seen no material slow-down in its customers' activity levels. However, in the solar power end-market, which Cookson assures is relatively small, the fall in demand since mid-year has deepened further and is expected to continue into 2012.

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The Precious Metals unit is now expected to break even for the full-year, as growth in Europe is offset by losses in the US. The firm said that it has launched a strategic review of the US business and expects to downsize operations in the country - leading to a one-off charge to be taken in the full-year results.

Meanwhile, Electronics has performed better-than-expected as it saw a strengthening of demand. The division's performance in the second half was better than the first.

"The macroeconomic situation remains uncertain and contingency plans are in place to respond promptly to market conditions. Feedback from our customers and third party industry forecasts continue to indicate mid-single digit growth in our main end-markets in 2012, albeit with low growth in Europe," Cookson said.

By 10:55, shares were down 4.10% at 442p.

BC