Materials science company Cookson disappointed investors on Wednesday after experiencing a poor performance in the Fused Silica business and an overall decline in revenues during the first half of the year.
Revenue for the period was down 4.0% on an underling basis, from £1,421m to £1,300m, pushing headline pre-tax profit down 3.0% to £127.6m (2011: £132.1m) and basic pre-tax profit down 22% to £93.5m (2011: £119.7m). Year-on-year net debt increased from £428.8m to £450.5m.
Whilst the Engineered Ceramics division saw marginal improvement in its three largest businesses, trading conditions in its smaller Fused Silica business continue to be very difficult and its resultant losses have impacted the group's overall performance.
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The business has been affected by the marked downturn in the global solar industry which started in mid-2011 and has proved deeper and more extended than previously anticipated. The firm said "decisive action" has been taken to restructure this business.
Nick Salmon, Chief Executive, said: "These results reflect a satisfactory first half performance in our main businesses, with a particularly strong profit improvement in the Performance Materials and Precious Metals Processing divisions. Our financial position remains strong, and we have taken further steps to significantly de-risk the group's pension arrangements.
"Looking to the second half, we expect Performance Materials to benefit from its normal seasonal weighting, and Precious Metals Processing should maintain its good performance. Recent signs of a general weakening in the global economy and slowing industrial production point to somewhat softer demand in Engineered Ceramics' main end-markets and, in response, we are taking the necessary management actions.
"Overall, we continue to make progress towards the three year performance targets set out in January 2011, and the recently announced strategic review of options to further enhance performance and unlock shareholder value is proceeding as planned."
The firm opted to pay an interim dividend of 7.50p per share (2011: 7.25p).
The share price fell 6.88% to 555p by 09:51.
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