4th Quarter Trading Update

Cookson Group PLC
18 January 2005

18 January 2005



FOURTH QUARTER 2004 TRADING UPDATE AND

OUTCOME OF STRATEGIC REVIEW



Cookson Group plc, the international materials science company, will present the
outcome of its strategic review to analysts and shareholders at 9:30am today.  A
copy of the strategy review slides will be available on the Cookson website,
www.cooksongroup.co.uk, from 9:30am today.  A full archived webcast will be
available from 3:30pm today.



In conjunction with today's presentation, the Company provides the following
commentary on trading during the fourth quarter of 2004.  All financial
information is preliminary and unaudited; sales and operating profit comparisons
are at constant exchange rates.



Fourth Quarter Trading Update



Performance for the Group in the fourth quarter of 2004 was consistent with the
indication given in the Third Quarter Trading Update issued on 5 November 2004.
As a result, profit before tax and exceptional items for the year is expected to
be in line with current market forecasts and significantly higher than 2003.
Group sales for the fourth quarter of 2004 were up on both the preceding quarter
and the same quarter in 2003 and operating profit also improved over the same
periods.  Cash generation was strongly positive in the fourth quarter and, as a
result, net borrowings at the end of 2004 were lower than at 31 December 2003.



Electronics division



Fourth quarter sales were similar to the preceding quarter and up on the fourth
quarter of 2003.  Sales for each sector were also similar to the preceding
quarter, with the Assembly Materials and Laminates sectors up on the same
quarter in 2003 but marginally lower in Chemistry.  As anticipated, year-on-year
sales growth across the division was lower in the fourth quarter than in the
first three quarters of 2004.  This was largely due to the sharp improvement
registered in the last quarter of 2003 which impacted comparisons with the prior
year; this was also in line with the experience of the wider electronics
industry.  Cost saving and efficiency measures ensured that profitability in the
fourth quarter continued to improve both sequentially and year-on-year.



Ceramics division



Sales and operating profits in the fourth quarter improved strongly over both
the preceding quarter and the prior year's fourth quarter.  Global steel
production, the division's main market, remained robust, as did the performance
of the division's Iron & Steel sector, and, collectively, the non-steel sectors
of the division also performed soundly.



Precious Metals division



The division experienced slower than anticipated peak holiday season sales,
reflecting softness in consumer demand in its key US and UK markets.
Nevertheless, sales and operating profit in the fourth quarter of 2004 improved
significantly over the preceding quarter and, although marginally down on the
fourth quarter of 2003, profits for the year were up on 2003.



Investments/Restructuring/Disposals



Since the Third Quarter Trading Update, further initiatives to increase
operating efficiency and reduce the cost base have been implemented in the
Electronics division.  These incorporate additional reductions in the division's
overhead structure, primarily in the USA, and downsizing production at the
Laminates sector's US East Coast facility.  It is also intended to reduce
Laminates capacity in Germany by some 75% and discussions with the local works
council are currently underway.  The one-off operating exceptional charge for
these initiatives is expected to amount to some £8 million in 2004, of which £5
million relates to cash costs.



The Group's investment in a 17-year revenue sharing agreement with Electric
Lightwave, Inc. relating to a fibre-optic cable network between Portland and Los
Angeles in the USA, for which royalties of £0.4 million per annum are currently
received, has been revalued.  This followed a reappraisal of the underlying
economics of the agreement and results in a non-operating exceptional charge of
some £18 million in 2004.



In December 2004, the Ceramics division sold two underperforming businesses
which make silica and zircon bricks used in glass melting furnaces with plants
in Belgium and Germany.  These businesses had sales of £21 million in 2004.  The
cash consideration received of £1 million resulted in a loss on disposal of £33
million, including a write-off of goodwill of £8 million.



The 'fraternity ring' activities of the Precious Metals division's US operations
- which had annualised sales in 2004 of c.£3 million - were sold in December
2004 for £3 million at a net gain of £1 million.



Outlook



Based on the first two weeks' trading and current order book levels, it is
anticipated that the generally solid trading environment seen in the fourth
quarter will continue in the first quarter of 2005.



Cookson's preliminary results for 2004 will be announced on 15 March 2005.





Outcome of Strategic Review



Since July 2004, when Nick Salmon was appointed Chief Executive, the Board has
conducted a detailed review of all Cookson's businesses and the strategic
options open to the Group for maximising shareholder value.



This review has determined that the optimum strategy for realising Cookson's
full potential is to focus on enhancing the operating performance of Cookson's
core businesses, whilst disposing of some non-core elements from within all
three of the Group's divisions.  Disposal proceeds from such transactions over
the next two years are expected to be over £100 million.



The Board intends to return Cookson to the dividend list as soon as possible,
with dividends being funded from free cash flow.





Commenting on the strategic review, Cookson Chief Executive Nick Salmon said:



'Over the past six months I have been pleased to confirm my initial impressions
that Cookson has strong market positions in all our business sectors, with
highly competitive products and technology and an excellent geographic
footprint.



'We are very confident that the chosen strategy of focusing on enhancing the
operating performance of our core businesses, whilst reducing debt through a
programme of non-core disposals and improved cash flow, will deliver value to
shareholders.



'We are already acting decisively in accelerating the rate of change that this
strategy requires, in restructuring or exiting underperforming businesses,
initiating the disposal programme and in driving further costs out of the
business.'



Shareholder/analyst enquiries:


Nick Salmon, Chief Executive                            020 7061 6500
Dennis Millard, Group Finance Director                  020 7061 6500
Lisa Williams, IR Manager                               020 7061 6500



Media enquiries:


John Olsen, Hogarth Partnership                         020 7357 9477





Note:

This announcement contains forward looking statements about Cookson.  Although
the Company believes its expectations are based on reasonable assumptions, any
such statements may be influenced by factors that could cause actual outcomes
and results to be materially different from those predicted.  These forward
looking statements are subject to numerous risks and uncertainties that could
cause actual results to differ materially from those in such statements, certain
of which are beyond the control of Cookson.



About Cookson Group

Cookson Group is a leading materials science company which provides materials,
processes and services to customers worldwide. The Group's operations are formed
into three divisions - Electronics, Ceramics and Precious Metals. The
Electronics division is a leading manufacturer and supplier of materials and
services to the electronics industry, primarily serving fabricators and
assemblers of printed circuit boards, assemblers of semiconductor packaging and
the electrical and industrial markets. The Ceramics division is a world leading
supplier of advanced flow control and refractory products and systems to the
iron and steel industry and is also a leading supplier of refractory lining
materials for iron and steelmaking and other industrial processes. The Precious
Metals division is a leading supplier to the jewellery industry of fabricated
precious metals products.



Headquartered in London, Cookson employs over 16,000 people in more than 35
countries and sells its products in over 100 countries.







Cookson Group plc, 265 Strand, London WC2R 1DB

Tel:  [phone], Fax: [phone]




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