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Elementis PLC (ELM)

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Wednesday 02 August, 2000

Elementis PLC

Interim Results

Elementis PLC
2 August 2000


                               ELEMENTIS plc
             INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2000

                   Elementis demonstrates enhanced performance

*  Sales up 8 per cent to £288.0 million (1999: £266.9 million)
*  Operating profit up 17 per cent to £32.2 million* (1999: £27.5
   million*)
*  Profit before tax up 20 per cent to £29.5 million* (1999: £24.5
   million*)
*  Earnings per share up 24 per cent to 5.6 pence* (1999: 4.5 pence*)

   *before goodwill amortisation and exceptionals


Lyndon Cole, Group Chief Executive of Elementis plc, said:

'The half year results clearly demonstrate that the Group-wide focus on
business re-engineering is delivering results.  Sales growth is being driven
through customer focus and innovation. The Group's lower cost base and
improved health and safety performance are direct results of the operational
excellence programme.

'Customer focus, innovation, people and operational excellence remain the
Group's key drivers of shareholder value; which, as previously stated,
should be reflected in enhanced performance as the year progresses.'


Enquiries

Elementis
Lyndon Cole              Group Chief Executive      020 7398 1400
George Fairweather       Group Finance Director
Anna Passey              Head of Corporate Communications

Brunswick
Andrew Fenwick                                      020 7404 5959
Rupert Young


Overview and financial results

The half year results clearly demonstrate that the Group-wide focus on
business re-engineering, launched in 1999, is delivering enhanced financial
performance.  Sales growth is being driven through customer focus and
innovation.  The Group's lower cost base and improved health and safety
performance are direct results of the operational excellence programme.

Overall market conditions improved during the period with a number of Asian
economies continuing their recovery, but competition remains aggressive.
Average exchange rates for the US dollar and sterling, our key manufacturing
currencies, strengthened against the euro by 11 per cent and 8 per cent
respectively over the first six months of the year.

Operating profit before goodwill amortisation and exceptionals was £32.2
million, up 17 per cent on the first half of 1999 and up 10 per cent on the
second half of 1999.  Currency transaction and translation effects adversely
impacted operating profit by around £1.7 million compared to the first half
of 1999.

Profit before goodwill amortisation, exceptionals and tax was £29.5 million,
up 20 per cent on the first half of 1999 and up 10 per cent on the second
half of 1999.  Basic earnings per share before goodwill amortisation and
exceptionals increased by 24 per cent to 5.6 pence.

Net exceptional charges before tax were £2.8 million (1999: £6.8 million).
Net cash inflow from operating activities was £18.1 million (1999: £32.7
million).  Net borrowings at the end of June were £57.7 million (1999: £60.4
million).


Dividends and issue of redeemable B shares

The Board has not declared an interim ordinary dividend (1999: 2.0 pence).
Instead, it will issue redeemable B shares to ordinary shareholders on the
register on 27 October 2000, such that they receive redeemable B shares with
a total nominal value of 2.1 pence for each ordinary share held.  This will
be coupled with an offer to redeem these new shares for cash at their
nominal value on 2 November 2000.  A further offer will also be made to
existing holders of redeemable B shares to redeem these shares for cash at
their nominal value on the same date.

By not paying an interim dividend on ordinary shares, Elementis estimates
that it will be able to recover £2.3 million of advance corporation tax
previously paid.  A circular providing full details of the issue and
redemption of redeemable B shares will be posted to all ordinary
shareholders on 2 October 2000.


Strategy

The Board of Elementis remains committed to creating value for shareholders
through organic growth and selective acquisitions. We continue to evaluate
acquisition opportunities against the Group's strict criteria of price and
fit with existing businesses.

Business teams have been established to accelerate the adoption of 
e-business opportunities.  Their primary focus is on the use of internet
technology to enhance customer relationships across the globe.


Health, safety and the environment

Focus on health, safety and the environment continues throughout the Group.
Compared to the first half of 1999, lost time accident frequency reduced by
6 per cent although, disappointingly, non-compliance with environmental
consents rose by two to 11; this is now receiving additional management
attention.


The Board

In July, the Board was strengthened by the appointment of Philip Brown,
Company Secretary, as an executive director and Rick McNeel as a non-
executive director.  Philip joined the Group in 1992 and played a major role
in the corporate restructuring to create Elementis plc.  Rick, a US citizen
based in the UK, is Group Vice President of Performance Products within the
chemical business of BP Amoco p.l.c.

Mike Parker stepped down as an executive director in the same month; his
departure follows the recent decision to strengthen business development
functions within individual operating businesses.


Current trading and outlook

Market conditions continue in line with those in the first half.  The
current weakness of the euro and recent increases in energy costs are a
concern.  Customer focus, innovation, people and operational excellence
remain the Group's key drivers of shareholder value which should deliver
further enhanced performance as the year progresses.


Review of operations
for the six months to 30 June 2000

                                   2000                       1999
                              Sales      Operating        Sales    Operating
                                           profit*                   profit*
                           £million       £million     £million     £million
                                                                            
Chromium                       65.8           12.0         58.9          9.5
Pigments & Specialties        118.7           15.6        111.8         14.1
Chemical Distribution          78.7            3.0         73.1          2.7
Specialty Rubber               28.2            1.6         25.7          1.2
Inter-group                    (3.4)             -         (2.6)           -
                           _________     _________    _________    _________
                              288.0           32.2        266.9         27.5
                           =========     =========    =========    =========
                                                                            
*before goodwill amortisation and exceptionals


Chromium

Operating profit before exceptionals was £12.0 million, an increase of 26
per cent on the first half of 1999, on sales up 12 per cent to £65.8
million.

The business estimates that the global chromium chemicals market has grown
modestly in volume terms compared to the first half of last year with
principal growth coming from chromic acid demand for US timber treatment and
metal finishing.  The chrome oxide market is estimated to have grown to a
lesser extent with demand for metal alloys for aerospace applications
remaining low, as predicted.  Towards the end of the period, there were
signs that the Asian leather tanning market for chrome sulphate is starting
to recover.

Elementis Chromium sales volume increased by 20 per cent on the first half
of 1999 with good growth in all product categories.  This reflects the
product focused sales and marketing strategy introduced in the second half
of 1999 which is delivering significant market share growth.  Chrome oxide
and chromic acid volume growth were particularly strong, the latter
reflected increasing demand for the superior handling properties of our
CA21 chromic acid product.  Over 40 per cent of CA21 sales were to new
chromic acid customers acquired since its launch 18 months ago.

Average pricing of chromium products was lower than in the first half of
1999 as a result of a more competitive pricing policy to grow market share,
aggressive competition and the impact of currency.  Compared to the first
half of 1999, the base currencies of major competitors in the Former Soviet
Union and South Africa were significantly weaker against sterling and the US
dollar.  In the six month period, US gas prices doubled.

The new kiln at Corpus Christi, Texas was successfully brought on stream;
the rotary hearth it replaced was shut down in July.  Plans are being
developed to increase capacity by de-bottlenecking downstream processes.
Annualised cost savings from the new kiln, as previously announced, are £2
million, which brings the total annualised cost savings achieved within
Elementis Chromium over the last year to £6 million.

The expanded pure salt plant at Eaglescliffe, UK was also commissioned in
the second quarter.  In July, this site completed one million man hours
without a lost time accident.


Pigments & Specialties

Operating profit before goodwill amortisation and exceptionals was £15.6
million, an increase of 11 per cent on the first half of 1999, on sales up 6
per cent to £118.7 million.  Currency transaction and translation adversely
impacted operating profit by around £1 million compared to the first half of
1999.

At Elementis Pigments, sales and operating profit before exceptionals both
increased.  This reflects strong growth of iron oxide sales into the
construction market and the benefits of the major restructuring and
upgrading programme, partially offset by lower profits on zinc products for
the depressed UK market.

Success in marketing higher value added iron oxide pigments continues, with
double digit sales growth into the toners and catalysts markets.  New
product launches during the period included Decelox for plastics and zinCare
for personal care, both specialty zinc derivatives of our Nanox product.

During the period, the restructuring programme in the UK was completed with
the consolidation of the Northampton distribution and administration centre
into Birtley and the closure of the anhydrous aluminium chloride production
facility at Birtley.  Consolidation of the small pigments manufacturing
facility in Toronto, Canada into the recently upgraded facility at Easton,
US will be completed later this year.

At Elementis Specialties, sales and operating profit before goodwill
amortisation and exceptionals were similarly both up on the first half of
1999, despite the impact of currency.  Strong sales growth was achieved in
the oil exploration drilling, inks and personal care markets; oil
exploration drilling benefitted from a continuing market recovery.
Rheological additives sales growth was strong, particularly water-based
additives for coatings which grew by around 7 per cent against the first
half of 1999;  Rheolate sales increased by 11 per cent.  Sales grew in most
geographical regions, with sales to Japan more than double that achieved in
the first half of 1999, reflecting the direct and technical sales presence
established in May last year.  Performance in Europe was hindered by the
relative weakness of the euro against sterling and the US dollar.

The number of customers evaluating Nanox for personal care products
increased significantly over the half year.  Elementis Specialties has
recently developed powder and gel derivatives of Nanox for UV protection in
clear wood coatings.  A plastic nanocomposite formulation, which utilises
proprietary clay modification technology, is currently on trial with
customers.

In June, the £2 million Rheolate production facility for water-based
coatings in Livingston, Scotland was completed and commissioned; this
enables Elementis Specialties to meet growing worldwide demand for these
technically innovative products.  Capacity was also increased at Livingston
to replace the small high cost production unit in Germany which closed late
last year.

Costs in Pigments & Specialties reduced by £1.5 million on an annualised
basis over the half year, in line with previously announced targets;
exceptional restructuring costs were £1.4 million as previously announced.


Chemical Distribution

Operating profit was £3.0 million, an increase of 11 per cent on the first
half of 1999, on sales up 8 per cent to £78.7 million.  Volume grew by 3 per
cent with strong growth in caustic soda and sodium hypochlorite being
partially offset by low levels of rock salt due to a mild winter in the
northeast of America.  Excluding rock salt, volume grew by 10 per cent.

An internet based ordering system was introduced for customers during the
period as an extension of our vendor managed inventory programme.


Specialty Rubber

Operating profit before exceptionals was £1.6 million, an increase of 33 per
cent on the first half of 1999, on sales up 10 per cent to £28.2 million.
Sales increased in all business units, with the largest, minerals
processing, benefitting from improved copper and gold markets following the
poor trading conditions experienced in the second half of 1999.

The programme to refocus and simplify the Linatex business on its core
specialty rubber capability and profitable sales opportunities is well
underway.  In the first half, the number of operating sites reduced from 25
to 17, headcount by 75 and annualised costs by £1.2 million.  Over the next
nine months, the number of sites will reduce by a further five and
annualised costs by a further £1.8 million, three months ahead of the
previously announced schedule.  Headcount will reduce by a further 75 over
the same period, an increase of 25 on the previous target.  Exceptional
restructuring costs of £1.4 million were charged in the first half with a
further £0.9 million estimated for the balance of the programme, in line with
the previous forecast.

The new £1.5 million rubber conversion and mixing plant in Malaysia is now
commissioned, providing lower cost and more consistent quality feedstock for
the Linatex sheet manufacturing and moulding process.

A £4 million continuous rubber sheet press is to be installed by the end of
2001, to further reduce operating costs and enable Linatex sheet to be
produced within tighter thickness tolerances for new applications and with
enhanced bonding capabilities.


Exceptionals

Exceptional charges before tax were £2.8 million, all relating to previously
announced restructuring in Elementis Pigments and Linatex; this compared to
£6.8 million of net exceptional charges in the first half of 1999.


Cash flow and balance sheet

Net cash inflow from operating activities was £18.1 million, compared to
£32.7 million in the first half of 1999.  Working capital outflow was £18.5
million, compared to £1.1 million in the first half of 1999.  Debtors
increased by £14.8 million over the course of the first six months, £9.9
million of which was attributed to increased sales including the normal
seasonal effect.  Trade debtor days increased by five days in the period,
primarily as a result of sales increases in markets with longer payment
terms.  Stock levels continue to be tightly controlled.

Cash expenditure on fixed assets totalled £14.9 million, most of which
relates to Elementis Chromium, the principal project being the new kiln.

Net borrowings at the end of June were £57.7 million compared to £45.5
million at the end of December 1999.  Shareholders' funds at the half year
were £398.4 million compared to £380.4 million at the end of December 1999.


Consolidated profit & loss account
for the six months to 30 June 2000

                        Before                                             
                         good-                                             
                          will                                             
                        amort-                       2000     1999     1999
                       isation                        Six      Six         
                      & excep- Goodwill            months   months     Year
                       tionals   amort-   Excep-    to 30    to 30    to 31
                                isation  tionals     June     June      Dec
                             £        £        £        £        £        £
                 Note  million  million  million  million  million  million
Turnover                                                                   
Continuing                                                                 
operations          3    288.0        -        -    288.0    266.9    535.1
                       =======  =======  =======  =======  =======  =======
Group operating                                                            
profit
Continuing                                                                 
operations
___________________________________________________________________________
Before goodwill                                                            
amortisation and                                                           
exceptionals              32.2        -        -     32.2     27.5     56.7
Goodwill                                                                    
amortisation                 -     (6.4)       -     (6.4)    (6.3)   (12.5)
Exceptionals                 -        -     (2.8)    (2.8)    (8.2)   (15.3)
___________________________________________________________________________
                    3     32.2     (6.4)   (2.8)     23.0     13.0     28.9
Associates -                                                               
continuing                                                                 
operations                   -        -        -        -        -      0.1
                       _______   _______ _______  _______  _______  _______
Operating profit          32.2     (6.4)   (2.8)     23.0     13.0     29.0
Profit on disposal                                                         
of properties                -         -       -        -      1.4      6.6
                       _______   _______ _______  _______  _______  _______
Profit on ordinary                                                         
activities before                                                          
interest                  32.2     (6.4)    (2.8)    23.0     14.4     35.6
Net interest                                                                
payable                   (2.7)       -        -     (2.7)    (3.0)    (5.4)
                       _______  _______  _______  _______  _______  _______
Profit on ordinary                                                         
activities before
tax
___________________________________________________________________________
Before goodwill                                                            
amortisation and                                                           
exceptionals              29.5        -        -     29.5     24.5     51.4
Goodwill                                                                    
amortisation                 -     (6.4)       -     (6.4)    (6.3)   (12.5)
Exceptionals                 -        -     (2.8)    (2.8)    (6.8)    (8.7)
___________________________________________________________________________
                          29.5     (6.4)    (2.8)    20.3     11.4     30.2
Tax on profit on                                                            
ordinary activities 4    (5.3)        -      0.2     (5.1)    (5.1)   (10.5)
                       _______  _______  _______  _______  _______  _______
Profit on ordinary                                                         
activities after                                                           
tax                       24.2     (6.4)    (2.6)    15.2      6.3     19.7
Minority interests                                                         
- equity                 (0.1)        -        -     (0.1)     0.1      0.3
                       _______  _______  _______  _______  _______  _______
Profit for the                                                             
financial period          24.1     (6.4)    (2.6)    15.1      6.4     20.0
Dividends           5        -        -        -        -     (8.6)    (8.6)
                       _______   _______  _______  _______  _______  _______
Amount transferred                                                         
to/(from) reserves        24.1     (6.4)    (2.6)    15.1     (2.2)    11.4
                       =======   =======  =======  =======  =======  =======
Earnings per        6                                                      
ordinary share
Basic and diluted                                    3.5p     1.5p     4.6p
Basic and diluted                                                          
before goodwill                                                            
amortisation and                                                           
exceptionals                                         5.6p     4.5p     9.3p
                                                                           





Consolidated balance sheet
at 30 June 2000

                                                2000       1999      1999
                                             30 June    30 June    31 Dec
                                            £million   £million  £million
                                                                         
Fixed assets                                                             
Goodwill                                       232.5      236.0     225.5
Tangible assets                                192.6      172.0     182.7
Investment in associated undertakings            1.9        1.8       1.8
                                            ________   ________  ________
                                               427.0      409.8     410.0
                                            ________   ________  ________
Current assets                                                           
Stocks                                          75.5       76.6      71.6
Debtors                                        117.3      122.6     104.9
Cash at bank and in hand                        72.6      212.5      79.9
                                            ________   ________  ________
                                               265.4      411.7     256.4
                                            ________   ________  ________
Creditors: amounts falling due within one                                
year
Borrowings                                       9.3       14.3      11.2
Proposed dividend                                  -        8.7         -
Creditors                                      111.5      114.1     109.4
                                             _______    _______   _______
                                               120.8      137.1     120.6
                                            ________   ________  ________
Net current assets                             144.6      274.6     135.8
                                            ________   ________  ________
Total assets less current liabilities          571.6      684.4     545.8
                                            ________   ________  ________
Creditors: amounts falling due after more                                
than one year                                                            
Borrowings                                     121.0      258.6     114.2
Government grants                                0.7        0.8       0.8
                                            ________   ________  ________
                                               121.7      259.4     115.0
Provisions for liabilities and charges          49.0       52.9      48.1
                                            ________   ________  ________
                                               170.7      312.3     163.1
                                            ________   ________  ________
                                               400.9      372.1     382.7
                                            ========   ========  ========
                                                                         
Capital and reserves                                                     
Called up share capital                         23.3       21.6      21.6
Share premium                                    1.1        1.1       1.1
Capital redemption reserve                      11.6          -         -
Profit and loss account                        362.4      347.0     357.7
                                            ________   ________  ________
Shareholders'funds - equity                   398.4      369.7     380.4
Minority interests - equity                      2.5        2.4       2.3
                                            ________   ________  ________
                                               400.9      372.1     382.7
                                            ========   ========  ========
                                                                         
Net borrowings                                (57.7)     (60.4)    (45.5)


Cash flow statement
for the six months to 30 June 2000
                                       2000             1999         1999
                                 Six months       Six months         Year
                                 to 30 June       to 30 June    to 31 Dec
                          Note     £million         £million     £million
                                                                           
                                                                         
Net cash inflow from                                                     
operating activities                   18.1             32.7         74.1
Returns on investments and                                               
servicing of finance
Interest received                       4.4            5.3            8.8
Interest paid                          (6.1)          (7.1)         (14.4)
Taxation                               (2.0)           0.8           (4.7)
Capital expenditure and                                                  
financial investment
Purchase of fixed assets              (14.9)         (21.9)         (43.9)
Disposal of fixed assets                6.1            2.3           12.0
Acquisitions and disposals                                               
Acquisition of businesses                 -           (0.2)          (0.2)
Disposal of businesses in                                                 
prior years                            (0.4)          (0.2)          (0.5)
Equity dividends paid                     -          (12.9)         (21.6)
                                 ___________     ___________   ___________
                                                                         
Cash inflow/(outflow) before                                             
use of liquid resources and                                              
financing                               5.2           (1.2)           9.6
Financing and management of                                               
liquid resources             7         (6.4)           1.3           (1.7)
                                 ___________     ___________   ___________
(Decrease)/increase in cash                                              
                             8         (1.2)           0.1            7.9
                                 ===========     ===========   ===========


Reconciliation of operating profit to net cash inflow from operating
activities for the six months to 30 June 2000

                                       2000             1999         1999
                                 Six months    Six months to      Year to
                                 to 30 June          30 June       31 Dec
                                   £million         £million     £million
                                                                         
Operating profit                       23.0             13.0         29.0
Goodwill amortisation                   6.4              6.3         12.5
Depreciation (less grants                                                  
credited)                               8.5              8.2         15.3
Share of profits of                                                       
associated undertakings                   -                -         (0.1)
(Profit)/loss on disposal of                                               
fixed assets                           (0.2)               -          0.2
Exceptionals in operating                                                  
profit                                  2.8              8.2         15.3
Cash outflow on exceptionals                                               
                                       (2.2)            (0.7)       (12.2)
(Increase)/decrease in                                                     
stocks                                 (1.0)            11.1         15.0
Increase in debtors                   (14.8)           (11.2)        (6.2)
(Decrease)/increase in                                                   
creditors                              (2.7)            (1.0)        10.6
Decrease in provisions                 (1.7)            (1.2)        (5.3)
                                  __________       __________    __________
Net cash inflow from                                                       
operating activities                   18.1             32.7          74.1
                                  ==========       ==========    ==========


Statement of total recognised gains and losses
for the six months to 30 June 2000

                                         2000            1999          1999
                                   Six months      Six months       Year to
                                   to 30 June      to 30 June        31 Dec
                                     £million        £million      £million
                                                                         
Profit for the financial period          15.1             6.4          20.0
Currency translation differences         16.5             4.8           2.2
Taxation on currency translation                                          
differences on foreign currency                                           
borrowings                               (1.7)           (0.7)         (1.0)
                                    __________      __________    __________
Total recognised gains for the                                             
financial period                         29.9            10.5          21.2
                                    ==========      ==========    ==========


Reconciliation of movements in shareholders' funds
for the six months to 30 June 2000

                                         2000            1999          1999
                                   Six months      Six months       Year to
                                   to 30 June      to 30 June        31 Dec
                                     £million        £million      £million
                                                                         
Profit for the financial period          15.1             6.4          20.0
Dividends - ordinary                        -            (8.6)         (8.6)
                                    __________      __________    __________
Amounts transferred to/(from)                                            
reserves                                 15.1            (2.2)         11.4
Currency translation differences         16.5             4.8           2.2
Taxation on currency translation                                          
differences on foreign currency                                           
borrowings                               (1.7)          (0.7)          (1.0)
Redemption of B shares                  (11.9)             -              -
                                    __________      __________    __________
Net increase in shareholders'                                              
funds                                    18.0             1.9          12.6
At beginning of the financial                                              
period                                  380.4           367.8         367.8
                                    __________      __________    __________
At end of the financial period          398.4           369.7         380.4
                                    ==========      ==========    ==========


Notes

1.   Accounting policies
Basis of preparation.  The financial information for the first six months of
2000 and 1999, which is unaudited but has been reviewed by the Company's
auditors, does not constitute statutory accounts within the meaning of
section 240 of the Companies Act 1985 and it is presented on the basis of
accounting policies set out in the financial statements of Elementis plc for
the year ended 31 December 1999.


2.   Exchange rates
The principal currency in which the Group conducts its business is the US
dollar.  For the six months to 30 June 2000, the average exchange rate was
$1.57 (1999: $1.61, year to 31 December 1999: $1.62).  The US dollar rate at
30 June 2000 was $1.51 (1999: $1.58, 31 December 1999: $1.61).


3.   Segmental information
                         Group turnover              Group operating profit
                   2000        1999       1999      2000      1999     1999
                    Six         six                  Six     Six           
                 months      months               months  months       Year
                  to 30       to 30    Year to     to 30   to 30         to
                   June        June     31 Dec      June    June     31 Dec
                  £mill-       mill-     £mill-    £mill-    ill-     £mill-
                    ion         ion        ion       ion     ion        ion

                                                                            
Analysis by                                                                 
activity
Chromium                                                                    
Before                                                                      
exceptionals       65.8        58.9     118.2      12.0        9.5      20.3
Inter-group                                                                 
turnover           (3.4)       (2.6)     (5.4)        -          -         -
Exceptionals          -           -         -         -       (7.4)     (8.8)
                 ______      ______    ______     ______     ______    ______
                   62.4        56.3     112.8       12.0       2.1      11.5
                 ______      ______    ______     ______     ______    ______
                                                                            
Pigments &                                                                  
Specialties
Before goodwill                                                             
amortisation                                                                
and                                                                         
exceptionals       118.7     111.8       222.9      15.6       14.1      28.5 
Goodwill                                                                     
amortisation          -           -         -       (6.4)      (6.3)    (12.5)
Exceptionals          -           -         -       (1.4)      (0.3)     (5.3)
                 ______      ______    ______      ______    ______    ______
                  118.7       111.8     222.9        7.8       7.5      10.7
                 ______      ______    ______      ______    ______    ______
Chemical                                                                    
Distribution       78.7        73.1     144.5        3.0       2.7       5.5
                 ______      ______    ______      ______    ______    ______
                                                                            
Specialty                                                                   
Rubber
Before                                                                      
exceptionals       28.2        25.7      54.9        1.6       1.2       2.4
Exceptionals          -           -         -       (1.4)     (0.5)     (1.2)
                 ______      ______    ______      ______    ______    ______
                   28.2        25.7      54.9        0.2       0.7       1.2
                 ______      ______    ______      ______    ______    ______
                                                                            
Total before                                                                
goodwill                                                                    
amortisation                                                                
and                                                                         
exceptionals      288.0     266.9       535.1      32.2       27.5      56.7
Goodwill                                                                     
amortisation          -           -         -      (6.4)      (6.3)     (12.5)
Exceptionals          -           -         -      (2.8)      (8.2)     (15.3)
                 ______      ______    ______     ______     ______    ______
                  288.0       266.9     535.1       23.0      13.0      28.9
                 ======      ======    ======     ======     ======    ======



                         Group turnover             Group operating profit

                   2000        1999       1999      2000      1999      1999
                    Six         Six                  Six       Six          
                 months      months               months    months          
                  to 30       to 30  Year to       to 30     to 30   Year to
                   June        June   31 Dec        June      June    31 Dec
                  £mill-      £mill-   £mill-      £mill-    £mill-    £mill-
                    ion         ion      ion         ion       ion       ion
Analysis by                                                                 
area of
operations
North America     194.5       180.6    357.6        17.6       9.9      24.2
Europe             83.1        77.5    157.3         4.6       2.7       4.8
Rest of the                                                                  
World              10.4         8.8     20.2         0.8       0.4      (0.1)
                 ______      ______   ______      ______    ______     ______
                  288.0       266.9    535.1        23.0      13.0      28.9
                 ======      ======   ======      ======    ======     ======


4.   Taxation
The tax charge of £5.3 million (1999: £5.4 million) is based on an estimated
effective tax rate on profit before goodwill amortisation and exceptionals
for the year to 31 December 2000 of 18 per cent (1999: 22 per cent).  The
rate is lower than the standard UK corporation tax rate for a number of
reasons including tax relief on purchased US goodwill, utilisation of
surplus ACT and deferred tax timing differences.
Tax on exceptional charges was a credit of £0.2 million (1999: £0.3
million).


5.   Dividends
No interim ordinary dividend will be paid (1999: 2.0 pence per share).


6.   Earnings per ordinary share
                                     2000           1999           1999
                               Six months     Six months           Year
                               to 30 June     to 30 June      to 31 Dec
                                    pence          pence          pence
                                per share      per share      per share
Basic earnings per ordinary                                              
share                                 3.5            1.5            4.6
Goodwill amortisation                 1.5            1.5            2.9
Exceptionals net of taxation                                            
                                      0.6            1.5            1.8
                                 _________      _________      _________
Basic earnings per ordinary                                                
share before goodwill                                                    
amortisation and                                                         
exceptionals                          5.6            4.5            9.3
                                 =========      =========      =========

Basic earnings per ordinary share are based on profit for the period of
£15.1 million (1999: £6.4 million, year to 31 December 1999: £20.0 million)
and on the weighted average number of ordinary shares in issue during the
period of 431.5 million (1999: 431.5 million, year to 31 December 1999:
431.5 million).  Basic earnings per ordinary share before goodwill
amortisation and exceptionals are based on earnings of £24.1 million (1999:
£19.2 million, year to 31 December 1999: £40.2 million).
Diluted earnings per ordinary share are based on an adjusted weighted
average number of shares of 433.5 million (1999: 431.5 million, year to 31
December 1999: 433.3 million).


7.   Financing and management of liquid resources
                                     2000             1999           1999
                               Six months    Six months to           Year
                               to 30 June          30 June      to 31 Dec
                                 £million         £million       £million
Redemption of B shares                                                 
(including expenses)                (11.9)              -              -
Increase/(decrease) in net                                                
borrowings                            5.5             1.3           (1.7)
                               ___________    ___________    ____________
                                     (6.4)            1.3           (1.7)
                               ===========    ===========    ============

Redeemable B shares, of nominal value £13.3 million, were issued for nil
consideration during the period.

8.    Reconciliation of net cash flow to movement in net borrowings

                                     2000             1999         1999
                               Six months       Six months         Year
                               to 30 June       to 30 June    to 31 Dec
                                 £million         £million     £million
Change in net borrowings                                               
resulting from cash flows:
(Decrease)/increase in cash                                            
in the period                        (1.2)            0.1           7.9
Decrease in borrowings                0.7             6.2         147.7
Decrease in liquid resources                                             
                                     (6.2)           (7.5)       (146.0)
                                __________     ___________    __________
                                                                       
                                     (6.7)           (1.2)          9.6
Currency translation                                                     
differences                          (5.5)          (11.2)         (7.1)
                               ___________     ___________    __________
(Increase)/decrease in net                                             
borrowings                           (12.2)         (12.4)          2.5
Net borrowings at beginning                                              
of the financial period                                                  
                                     (45.5)         (48.0)        (48.0)
                                ___________     ___________    __________
Net borrowings at end of the                                             
financial period                     (57.7)         (60.4)        (45.5)
                                ===========     ===========    ==========


9.   Contingent liabilities
In 1999 the Group was notified of a potential warranty claim, under the
contract for the sale of Pauls Malt, relating to export refunds from the
Intervention Board for Agricultural Produce.  Should such a claim
materialise, this will be vigorously defended and, in any event, in the
opinion of the directors, this will not have a significant effect on the
financial position of the Group.

Auditors' independent review report to Elementis plc

Introduction
We have been instructed by the Company to review the attached financial
information and we have read the other information contained in the interim
report for any apparent misstatements or material inconsistencies with the
financial information.

Directors' responsibilities
The interim report, including the financial information contained therein,
is the responsibility of, and has been approved by the directors.  The
Listing Rules of the Financial Services Authority require that the
accounting policies and presentation applied to the interim figures should
be consistent with those applied in preparing the preceding annual financial
statements except where any changes, and the reasons for them, are
disclosed.

Review work performed
We conducted our review in accordance with the guidance contained in
Bulletin 1999/4 issued by the Auditing Practices Board.  A review consists
principally of making enquiries of Group management and applying analytical
procedures to the financial information and underlying financial data, and
based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed.  A review
excludes audit procedures such as tests of controls and verification of
assets, liabilities and transactions.  It is substantially less in scope
than an audit performed in accordance with Auditing Standards and,
therefore, provides a lower level of assurance than an audit.  Accordingly,
we do not express an audit opinion on the financial information.

Review conclusion
On the basis of our review, we are not aware of any material modifications
that should be made to the financial information as presented for the six
months ended 30 June 2000.

PricewaterhouseCoopers
Chartered Accountants
London