Financial Express (Holdings) Limited (“we”, “our”, “us” and derivatives) are committed to protecting and respecting your privacy. This Privacy Policy, together with our Terms of Use, sets out the basis on which any personal data that we collect from you, or that you provide to us, will be processed by us relating to your use of any of the below websites (“sites”).

  • FEAnalytics.com
  • FEInvest.net
  • FETransmission.com
  • Investegate.co.uk
  • Trustnet.hk
  • Trustnetoffshore.com
  • Trustnetmiddleeast.com

For the purposes of the Data Protection Act 1998, the data controller is Trustnet Limited of 2nd Floor, Golden House, 30 Great Pulteney Street, London, W1F 9NN. Our nominated representative for the purpose of this Act is Kirsty Witter.

WHAT INFORMATION DO WE COLLECT ABOUT YOU?

We collect information about you when you register with us or use any of our websites / services. Part of the registration process may include entering personal details & details of your investments.

We may collect information about your computer, including where available your operating system, browser version, domain name and IP address and details of the website that you came from, in order to improve this site.

You confirm that all information you supply is accurate.

COOKIES

In order to provide personalised services to and analyse site traffic, we may use a cookie file which is stored on your browser or the hard drive of your computer. Some of the cookies we use are essential for the sites to operate and may be used to deliver you different content, depending on the type of investor you are.

You can block cookies by activating the setting on your browser which allows you to refuse the setting of all or some cookies. However, if you use your browser settings to block all cookies (including essential cookies) you may not be able to access all or part of our sites. Unless you have adjusted your browser setting so that it will refuse cookies, our system will issue cookies as soon as you visit our sites.

HOW WE USE INFORMATION

We store and use information you provide as follows:

  • to present content effectively;
  • to provide you with information, products or services that you request from us or which may interest you, tailored to your specific interests, where you have consented to be contacted for such purposes;
  • to carry out our obligations arising from any contracts between you and us;
  • to enable you to participate in interactive features of our service, when you choose to do so;
  • to notify you about changes to our service;
  • to improve our content by tracking group information that describes the habits, usage, patterns and demographics of our customers.

We may also send you emails to provide information and keep you up to date with developments on our sites. It is our policy to have instructions on how to unsubscribe so that you will not receive any future e-mails. You can change your e-mail address at any time.

In order to provide support on the usage of our tools, our support team need access to all information provided in relation to the tool.

We will not disclose your name, email address or postal address or any data that could identify you to any third party without first receiving your permission.

However, you agree that we may disclose to any regulatory authority to which we are subject and to any investment exchange on which we may deal or to its related clearing house (or to investigators, inspectors or agents appointed by them), or to any person empowered to require such information by or under any legal enactment, any information they may request or require relating to you, or if relevant, any of your clients.

You agree that we may pass on information obtained under Money Laundering legislation as we consider necessary to comply with reporting requirements under such legislation.

ACCESS TO YOUR INFORMATION AND CORRECTION

We want to ensure that the personal information we hold about you is accurate and up to date. You may ask us to correct or remove information that is inaccurate.

You have the right under data protection legislation to access information held about you. If you wish to receive a copy of any personal information we hold, please write to us at 3rd Floor, Hollywood House, Church Street East, Woking, GU21 6HJ. Any access request may be subject to a fee of £10 to meet our costs in providing you with details of the information we hold about you.

WHERE WE STORE YOUR PERSONAL DATA

The data that we collect from you may be transferred to, and stored at, a destination outside the European Economic Area (“EEA”). It may be processed by staff operating outside the EEA who work for us or for one of our suppliers. Such staff may be engaged in, amongst other things, the provision of support services. By submitting your personal data, you agree to this transfer, storing and processing. We will take all steps reasonably necessary, including the use of encryption, to ensure that your data is treated securely and in accordance with this privacy policy.

Unfortunately, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our sites; any transmission is at your own risk. You will not hold us responsible for any breach of security unless we have been negligent or in wilful default.

CHANGES TO OUR PRIVACY POLICY

Any changes we make to our privacy policy in the future will be posted on this page and, where appropriate, notified to you by e-mail.

OTHER WEBSITES

Our sites contain links to other websites. If you follow a link to any of these websites, please note that these websites have their own privacy policies and that we do not accept any responsibility or liability for these policies. Please check these policies before you submit any personal data to these websites.

CONTACT

If you want more information or have any questions or comments relating to our privacy policy please email publishing@financialexpress.net in the first instance.

 Information  X 
Enter a valid email address

Elementis PLC (ELM)

  Print      Mail a friend       Annual reports

Friday 12 April, 2002

Elementis PLC

Interim Results


                                 1 August 2001                                 

                                 ELEMENTIS plc                                 

             INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2001             

  * Sales £296.7 million (2000: £288.0 million)
   
  * Operating profit £17.5 million* (2000: £32.2 million*)
   
  * Profit before tax £15.1 million* (2000: £29.5 million*)
   
  * Earnings per share 3.0 pence* (2000: 5.6 pence*)
   
*before goodwill amortisation and exceptionals

Jonathan Fry, Chairman of Elementis plc, said:

'The half year results reflect the tough global economic climate emanating from
the US. As previously indicated, these conditions, combined with substantially
higher energy costs, have resulted in a sharp fall in operating profit. The
outlook for the US economy, and the resulting impact on the global economy, is
the most significant factor in determining short-term prospects for the Group.

'Our immediate focus is on managing the short-term trading position.
Nevertheless, we continue to explore options to maximise shareholder value
including the evaluation of acquisition opportunities against the Group's
strict criteria of price and fit with our major businesses.'

                                   - Ends -                                    

Enquiries

Elementis 020 7398 1400

Jonathan Fry Chairman

George Fairweather Group Finance Director

Anna Passey Head of Corporate Communications

Brunswick 020 7404 5959

Andrew Fenwick

Rupert Young

Overview and financial results

The half year results reflect the tough global economic climate emanating from
the US. As previously indicated, these conditions, combined with substantially
higher energy costs, have resulted in a sharp fall in operating profit.

Sales increased in sterling terms by 3 per cent on the first half of 2000,
reflecting the strengthening of the US dollar. On a constant currency basis,
sales declined by a similar amount. Excluding Chemical Distribution, sales on a
constant currency basis in
North America declined by 9 per cent.

Operating profit before goodwill amortisation and exceptionals was £17.5
million, compared to £32.2 million in the first half and £31.2 million in the
second half of 2000. On a constant currency basis, the impact on operating
profit of the sales decline in North America, excluding Chemical Distribution,
was approximately £5 million. Higher energy costs adversely impacted operating
profit by £7.3 million versus the first half of 2000 on a comparable basis.
Currency transaction and translation effects favourably impacted operating
profit before goodwill amortisation and exceptionals by approximately £1.6
million compared to the first half of 2000.

Profit before goodwill amortisation, exceptionals and tax was £15.1 million
compared to
£29.5 million in the first half of 2000 and £28.9 million in the second half.
Basic earnings
per share before goodwill amortisation and exceptionals was 3.0 pence (2000:
5.6 pence).

Net exceptional charges before tax were £5.1 million (2000: £2.8 million) of
which
£4.6 million comprised costs incurred in preparing and marketing the Company
for sale.
Net cash inflow from operating activities was £0.4 million (2000: £18.1
million).
Net borrowings at the end of June were £72.5 million (2000: £57.7 million).

Dividends and issue of redeemable B shares

The Board has not declared an interim ordinary dividend. Instead, it will
continue with the programme, started in 2000, of issuing and redeeming
redeemable B shares. The Board intends to issue further redeemable B shares to
ordinary shareholders on the register on
29 October 2001, such that they receive redeemable B shares with a total
nominal value of 2.1 pence for each ordinary share held; this is the same as
the comparable issue last year. The issue will be coupled with an offer to
redeem the new shares for cash at their nominal value on 2 November 2001. 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 28 September 2001.

The Board

In July, Lyndon Cole resigned, by mutual consent, as Group Chief Executive. The
process to seek a new Chief Executive is underway but it is too early to give a
timescale for the appointment. Jonathan Fry has temporarily become Executive
Chairman until the new appointment is made.

Strategy

Following the announcement in May that Elementis had terminated discussions
with potential purchasers, the Board continues to explore options to maximise
shareholder value.

The current difficult economic conditions, particularly weak demand and high
energy costs in the US, necessitate our immediate focus on managing the
short-term trading position. Nevertheless, we continue to seek and evaluate
acquisition opportunities against the Group's strict criteria of price and fit
with our major businesses.

Current trading and outlook

Market conditions continue to be in line with those in the first half. The
outlook for the US economy, and the resulting impact on the global economy, is
the most significant factor in determining short-term prospects for the Group.

Energy costs in the second half remain an issue although the impact is expected
to be less severe than in the first half of 2001.

We currently estimate that the Group's energy costs in the second half will
increase by around £2.5 million versus the second half of 2000 on a comparable
basis.

Benefits from ongoing business improvement projects should be increasingly
apparent as the year progresses, particularly when the first phase of Six Sigma
projects are completed.

Review of operations
for the six months to 30 June 2001

                                         2001                      2000       
                                                                              
                                     Sales Operating           Sales Operating
                                             profit*                   profit*
                                  £million  £million        £million  £million
                                                                              
Chromium                          68.2     4.2              65.8     12.0     
                                                                              
Pigments & Specialties            119.7    10.5             118.7    15.6     
                                                                              
Chemical Distribution             87.3     1.9              78.7     3.0      
                                                                              
Specialty Rubber                  25.3     0.9              28.2     1.6      
                                                                              
Inter-group                       (3.8)    -                (3.4)    -        
                                                                              
                                  296.7    17.5             288.0    32.2     

*before goodwill amortisation and exceptionals

Chromium

Operating profit was £4.2 million, compared to £12.0 million in the first half
of 2000, on sales up 4 per cent to £68.2 million. On a constant currency basis,
sales decreased by approximately 2 per cent with volume down by 3 per cent.

Global demand for chromium chemicals is estimated by Elementis to be around the
same as in the first half of 2000. Strong demand for chromic oxide, for use in
metal alloys, was offset by lower US demand for pigmentary applications and
lower demand for chrome sulphate for use in leather tanning, particularly in
the UK.

Sales volume of chromic acid continued to grow, based on the success of the
superior handling properties of our CA21™ chromic acid product. Sales volume of
CA21™ increased by just under 30 per cent compared to the first half of 2000.
Sales volumes of other product categories were lower. Average pricing in
currency of invoice was also down, reflecting increased competition from
Russia.

Higher energy costs adversely impacted operating profit by £5.0 million versus
the first half of 2000 on a comparable basis.

These costs were also £2.0 million higher than in the second half of last year.

Early in 2001, headcount reduced by more than 10 per cent as a result of a
business process re-engineering exercise at Corpus Christi, Texas. The one-off
cost of £2.3 million will largely be recouped over the balance of the year.

A new gas cleaning system for the chromic oxide plant at Eaglescliffe, UK was
commissioned in the first quarter costing £2.6 million. This will further
enhance the business's environmental performance standards. Some production
capacity of chromic oxide for use in metal alloys was unavailable during the
period as a result of the project.

Pigments & Specialties

Operating profit before goodwill amortisation and exceptionals was £10.5
million compared to £15.6 million in the first half of 2000, on sales up 1 per
cent to £119.7 million. On a constant currency basis sales decreased by
approximately 4 per cent.

At Elementis Pigments, sales and operating profit before exceptionals
decreased, mainly as a result of slow overall demand for iron oxide pigments
for coatings, construction and chemicals applications in North America;
profitability of zinc products, carboxylates and catalysts was also lower.
Sales of construction grade Ferrispec™ granular product increased
significantly.

Margins were under pressure largely as a result of higher US energy costs.
Additional production equipment was installed at the Shenzhen facility in
China, further enhancing the business's operating capabilities.

At Elementis Specialties, sales in the first half of 2001 increased as a result
of the stronger US dollar. On a constant currency basis, sales were at a
similar level. Lower sales for coatings applications, particularly in North
America, were offset by very significant growth in rheological additives sales
for the oil exploration market, wet process organoclays being particularly
successful. Sales into the inks market were unchanged. Overall European trading
remained relatively robust compared to North America and Asia. Rheolate™ sales
volumes for aqueous coatings applications were maintained at the same level as
the first half of last year.

Operating profit before goodwill amortisation and exceptionals was lower than
in the first half of 2000, primarily as a result of higher energy and
quarternary amine costs not recouped through pricing and expenditure on
upgrading sales and marketing capabilities, including
e-commerce.

Thixatrol® Max, a new thixotrope rheological additive, was launched in Europe
during the period. This is targeted at solvent based coatings applications.

Chemical Distribution

Operating profit was £1.9 million, compared to £3.0 million in the first half
of 2000, on sales up 11 per cent to £87.3 million. On a constant currency
basis, sales increased by approximately 3 per cent.

Volume grew by 5 per cent due to strong weather-related demand for rock salt in
the northeast of America. Excluding rock salt, volume decreased by 5 per cent,
primarily as a result of the slow-down in the US economy.

Margins narrowed due to difficulties in recovering increased purchase costs
through higher pricing; these increases were primarily energy related. Fixed
costs remained tightly controlled.

Specialty Rubber

Operating profit before exceptionals was £0.9 million, compared to £1.6 million
in the first half of 2000, on sales down 10 per cent to £25.3 million.

The sales decline occurred primarily in North America. This was due to output
reductions by West Coast mining customers because of high energy costs, and the
exit of unprofitable sales lines. Strong sales growth was achieved in South
Africa and Asia. Sales in Europe were impacted by disruption caused by the
aircraft crash at the Yateley, UK, facility
last December and by the decision taken early in the year not to pursue major
new process technology equipment contracts.

Rubber sheet sales recorded double digit growth, reflecting the business's
increased focus on the core Linatex rubber brand. In May, a new product,
LinaCrepe™, was launched. This form of uncured rubber can be moulded into shape
and is particularly suitable for belting, hoses and roller covering
applications.

The programme announced 18 months ago to refocus and simplify the Linatex
business was completed in February 2001 with the closure of the final site in
Montreal. Over the course of the half year, headcount reduced by 81.

The £4.0 million continuous rubber sheet press is on schedule to be installed
in Malaysia by the end of 2001, to reduce operating costs and further enable
Linatex sheet to be produced within tighter thickness tolerances for new
applications and with enhanced bonding capabilities.

Six Sigma

Six Sigma business improvement methodology has now been launched across the
Group. The 13 `blackbelt' team leaders completed their training in July and
training for the next level participants is planned for later in the year. The
first phase of Six Sigma projects cover manufacturing and logistics and will be
completed in the third quarter.

Health, safety and the environment

Compared to the first half of 2000, lost time accident frequency reduced by 42
per cent due to the increased focus on safety and the introduction of a new
incident investigation reporting system which identifies the root causes of
reportable incidents and `near misses'.
Non-compliance with environmental consents rose from 11 to 18 in the first half
of 2001. Each of these is thoroughly investigated and the Board is committed to
reversing this position.

Exceptionals

Exceptional charges before tax were £5.1 million, comprising £4.6 million of
costs incurred in preparing and marketing the Company for sale and £0.5 million
of additional inventory write downs relating to the Specialty Rubber
restructuring completed in the first half of the year. This compared to £2.8
million of net exceptional charges in the first half of 2000.

Cash flow and balance sheet

Net cash inflow from operating activities was £0.4 million, compared to £18.1
million in
the first half of 2000, the decrease being largely a result of lower operating
profit.

Working capital outflow was £21.0 million, compared to £18.5 million in the
first half of 2000. Inventories increased by £5.1 million over the half year.
Programmes are now in place to reverse this trend in the second half. Debtors
increased by £9.5 million, most of which is the normal seasonal effect with
trade debtor days increasing by 3 days. Creditors decreased by £6.4 million,
trade creditor days reducing by 5 days partially due to a change in source of a
significant raw material.

Cash expenditure on fixed assets totalled £7.5 million (2000: £14.9 million),
compared with depreciation of £9.4 million. Major projects were the Elementis
Chromium oxide gas cleaning plant and the Linatex continuous sheet press.
Capital expenditure for the full year is still likely to be modestly ahead of
depreciation.

Net borrowings at the end of June were £72.5 million compared to £41.7 million
at the end of December 2000. Shareholders' funds at the half year were £414.5
million compared to £411.2 million at the end of December 2000.

Consolidated profit & loss account
for the six months to 30 June 2001

                              Before                                                   
                            goodwill                              2001    2000    2000 
                        amortisation     Goodwill                  Six     Six    Year 
                                   & amortisation Exceptionals  months  months   to 31 
                        exceptionals                             to 30   to 30     Dec 
                                                                  June    June         
                                                                                       
                       Note        £     £million     £million       £       £       £ 
                             million                           million million million 
                                                                                       
Turnover - continuing      3 296.7              -            - 296.7   288.0   573.8   
operations                                                                             
                                                                                       
Group operating profit                                                                 
                                                                                       
Before goodwill amortisation 17.5               -            - 17.5    32.2    63.4    
and exceptionals                                                                       
                                                                                       
Goodwill amortisation              - (6.9)                   - (6.9)   (6.4)   (13.3)  
                                                                                       
Exceptionals                       -            - (5.1)        (5.1)   (2.8)   (3.0)   
                                                                                       
                           3 17.5    (6.9)        (5.1)        5.5     23.0    47.1    
                                                                                       
Associates -                       -            -            -       - -       0.1     
continuing operations                                                                  
                                                                                       
Operating profit -           17.5    (6.9)        (5.1)        5.5     23.0    47.2    
continuing operations                                                                  
                                                                                       
Net interest payable         (2.4)              -            - (2.4)   (2.7)   (5.1)   
                                                                                       
Profit on ordinary                                                                     
activities before tax                                                                  
                                                                                       
Before goodwill amortisation 15.1               -            - 15.1    29.5    58.4    
and exceptionals                                                                       
                                                                                       
Goodwill amortisation              - (6.9)                   - (6.9)   (6.4)   (13.3)  
                                                                                       
Exceptionals                       -            - (5.1)        (5.1)   (2.8)   (3.0)   
                                                                                       
                             15.1    (6.9)        (5.1)        3.1     20.3    42.1    
                                                                                       
Tax on profit on           4 (2.1)              -            - (2.1)   (5.1)   (7.8)   
ordinary activities                                                                    
                                                                                       
Profit on ordinary           13.0    (6.9)        (5.1)        1.0     15.2    34.3    
activities after tax                                                                   
                                                                                       
Minority interests -         (0.1)              -            - (0.1)   (0.1)   (0.1)   
equity                                                                                 
                                                                                       
Profit for the               12.9    (6.9)        (5.1)        0.9     15.1    34.2    
financial period                                                                       
                                                                                       
Dividends - non-equity             -            -            -       - -       (0.1)   
                                                                                       
Amount transferred to        12.9    (6.9)        (5.1)        0.9     15.1    34.1    
reserves                                                                               
                                                                                       
Earnings per ordinary      5                                                           
share                                                                                  
                                                                                       
Basic and diluted                                              0.2p     3.5p    7.9p   
                                                                                       
Basic before goodwill                                          3.0p     5.6p    11.6p  
amortisation and                                                                       
exceptionals                                                                           
                                                                                       
Diluted before goodwill                                        3.0p     5.6p    11.5p  
amortisation and                                                                       
exceptionals                                                                           

Consolidated balance sheet
at 30 June 2001

                                                       2001    2000    2000
                                                    30 June 30 June  31 Dec
                                                                           
                                                   £million       £       £
                                                            million million
                                                                           
Fixed assets                                                               
                                                                           
Goodwill                                           233.5    232.5   228.8  
                                                                           
Tangible assets                                    195.7    192.6   192.1  
                                                                           
Investment in associated undertakings              2.1      1.9     2.0    
                                                                           
                                                   431.3    427.0   422.9  
                                                                           
Current assets                                                             
                                                                           
Stocks                                             84.6     75.5    76.7   
                                                                           
Debtors                                            118.6    117.3   109.2  
                                                                           
Cash at bank and in hand                           28.3     72.6    51.2   
                                                                           
                                                   231.5    265.4   237.1  
                                                                           
Creditors: amounts falling due within one year                             
                                                                           
Borrowings                                         12.1     9.3     7.3    
                                                                           
Creditors                                          99.6     111.5   106.2  
                                                                           
                                                   111.7    120.8   113.5  
                                                                           
Net current assets                                 119.8    144.6   123.6  
                                                                           
Total assets less current liabilities              551.1    571.6   546.5  
                                                                           
Creditors: amounts falling due after more than one                         
year                                                                       
                                                                           
Borrowings                                         88.7     121.0   85.6   
                                                                           
Government grants                                  0.6      0.7     0.6    
                                                                           
                                                   89.3     121.7   86.2   
                                                                           
Provisions for liabilities and charges             44.7     49.0    46.6   
                                                                           
                                                   134.0    170.7   132.8  
                                                                           
                                                   417.1    400.9   413.7  
                                                                           
Capital and reserves                                                       
                                                                           
Called up share capital                            24.4     23.3    23.6   
                                                                           
Share premium                                      1.1      1.1     1.1    
                                                                           
Capital redemption reserve                         33.8     11.6    20.4   
                                                                           
Profit and loss account                            355.2    362.4   366.1  
                                                                           
Shareholders' funds                                414.5    398.4   411.2  
                                                                           
Minority interests                                 2.6      2.5     2.5    
                                                                           
                                                   417.1    400.9   413.7  
                                                                           
Shareholders' funds                                                        
                                                                           
Equity                                             411.7    396.7   409.2  
                                                                           
Non-equity                                         2.8      1.7     2.0    
                                                                           
                                                   414.5    398.4   411.2  
                                                                           
Net borrowings                                     (72.5)   (57.7)  (41.7) 

Cash flow statement
for the six months to 30 June 2001

                                                        2001    2000  2000  
                                                         Six     Six  Year  
                                                      months  months  to 31 
                                                       to 30   to 30   Dec  
                                                        June    June        
                                                                            
                                               Note        £       £    £   
                                                     million million million
                                                                            
Net cash inflow from operating activities            0.4     18.1    58.4   
                                                                            
Returns on investments and servicing of                                     
finance                                                                     
                                                                            
Interest received                                    3.7     4.4     9.3    
                                                                            
Interest paid                                        (6.5)   (6.1)   (14.4) 
                                                                            
Taxation                                             (4.6)   (2.0)   (4.5)  
                                                                            
Capital expenditure and financial investment                                
                                                                            
Purchase of fixed assets                             (7.5)   (14.9)  (22.1) 
                                                                            
Disposal of fixed assets                             0.1     6.1     6.7    
                                                                            
Acquisitions and disposals                                                  
                                                                            
Disposal of businesses in prior years                (0.2)   (0.4)   (1.0)  
                                                                            
Cash (outflow)/inflow before use of liquid           (14.6)  5.2     32.4   
resources and financing                                                     
                                                                            
Financing and management of liquid resources     6   10.7    (6.4)   (35.7) 
                                                                            
Decrease in cash                                 7   (3.9)   (1.2)   (3.3)  

Reconciliation of operating profit to net cash inflow from operating activities

for the six months to 30 June 2001

                                                        2001    2000    2000
                                                         Six     Six    Year
                                                      months  months   to 31
                                                       to 30   to 30     Dec
                                                        June    June        
                                                                            
                                                           £       £       £
                                                     million million million
                                                                            
Operating profit                                     5.5     23.0    47.2   
                                                                            
Goodwill amortisation                                6.9     6.4     13.3   
                                                                            
Depreciation (less grants credited)                  9.4     8.5     17.3   
                                                                            
Share of profits of associated undertakings          -       -       (0.1)  
                                                                            
Profit on disposal of fixed assets                   -       (0.2)   -      
                                                                            
Exceptionals in operating profit                     5.1     2.8     3.0    
                                                                            
Cash outflow on exceptionals                         (4.3)   (2.2)   (3.9)  
                                                                            
Increase in stocks                                   (5.1)   (1.0)   (1.8)  
                                                                            
Increase in debtors                                  (9.5)   (14.8)  (8.4)  
                                                                            
Decrease in creditors                                (6.4)   (2.7)   (2.2)  
                                                                            
Decrease in provisions                               (1.2)   (1.7)   (6.0)  
                                                                            
Net cash inflow from operating activities            0.4     18.1    58.4   

Statement of total recognised gains and losses
for the six months to 30 June 2001

                                                        2001    2000    2000
                                                         Six     Six    Year
                                                      months  months   to 31
                                                       to 30   to 30     Dec
                                                        June    June        
                                                                            
                                                           £       £       £
                                                     million million million
                                                                            
Profit for the financial period                      0.9     15.1    34.2   
                                                                            
Currency translation differences                     17.1    16.5    19.4   
                                                                            
Taxation on currency translation differences         (1.3)   (1.7)   (2.0)  
on foreign currency borrowings                                              
                                                                            
Total recognised gains for the financial             16.7    29.9    51.6   
period                                                                      

Reconciliation of movements in shareholders' funds

for the six months to 30 June 2001

                                                        2001    2000    2000
                                                         Six     Six    Year
                                                      months  months   to 31
                                                       to 30   to 30     Dec
                                                        June    June        
                                                                            
                                                           £       £       £
                                                     million million million
                                                                            
Profit for the financial period                      0.9        15.1 34.2   
                                                                            
Dividends - redeemable B shares                      -             - (0.1)  
                                                                            
Amounts transferred to reserves                      0.9        15.1 34.1   
                                                                            
Redemption of redeemable B shares (including         (13.4)  (11.9)  (20.7) 
issue costs)                                                                
                                                                            
Currency translation differences                     17.1       16.5 19.4   
                                                                            
Taxation on currency translation differences         (1.3)   (1.7)   (2.0)  
on foreign currency borrowings                                              
                                                                            
Net increase in shareholders' funds                  3.3        18.0 30.8   
                                                                            
At beginning of the financial period                 411.2     380.4 380.4  
                                                                            
At end of the financial period                       414.5     398.4 411.2  

Notes to the financial statements

  * Accounting policies
   
Basis of preparation The financial information for the first six months of 2001
and 2000, 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
2000.

  * Exchange rates
   
For the six months to 30 June 2001, the average sterling exchange rate was
$1.44 and €1.61 (2000: $1.57 and €1.64, year to 31 December 2000: $1.52 and €
1.64). The sterling exchange rate at 30 June 2001 was $1.41 and €1.66 (2000:
$1.51 and €1.58, 31 December 2000: $1.49 and €1.59).

  * Segmental information
   
  * 
   
       Group turnover        Group operating profit         
                                                            
                2001    2000    2000    2001    2000    2000
                 Six     Six    Year     Six     Six    Year
              months  months          months  months        
               to 30   to 30   to 31   to 30   to 30   to 31
                June    June     Dec    June    June     Dec
                                                            
                   £       £       £       £       £       £
             million million million million million million
                                                            
Analysis by                                                 
activity                                                    
                                                            
Chromium                                                    
                                                            
Before       68.2    65.8    131.7   4.2     12.0    23.7   
exceptionals                                                
                                                            
Inter-group  (3.8)   (3.4)   (6.9)   -       -       -      
turnover                                                    
                                                            
Exceptionals -       -       -       -       -       0.7    
                                                            
             64.4    62.4    124.8   4.2     12.0    24.4   
                                                            
Pigments &                                                  
Specialties                                                 
                                                            
Before                                                      
goodwill     119.7   118.7   234.9   10.5    15.6    31.1   
amortisation                                                
and                                                         
exceptionals                                                
                                                            
Goodwill     -       -       -       (6.9)   (6.4)   (13.3) 
amortisation                                                
                                                            
Exceptionals -       -       -       -       (1.4)   (1.4)  
                                                            
             119.7   118.7   234.9   3.6     7.8     16.4   
                                                            
Chemical     87.3    78.7    160.0   1.9     3.0     6.0    
Distribution                                                
                                                            
Specialty                                                   
Rubber                                                      
                                                            
Before       25.3    28.2    54.1    0.9     1.6     2.6    
exceptionals                                                
                                                            
Exceptionals -       -       -       (0.5)   (1.4)   (2.3)  
                                                            
             25.3    28.2    54.1    0.4     0.2     0.3    
                                                            
Group        -       -       -       (4.6)   -       -      
exceptionals                                                
                                                            
Total                                                       
                                                            
Before                                                      
goodwill     296.7   288.0   573.8   17.5    32.2    63.4   
amortisation                                                
and                                                         
exceptionals                                                
                                                            
Goodwill     -       -       -       (6.9)   (6.4)   (13.3) 
amortisation                                                
                                                            
Exceptionals -       -       -       (5.1)   (2.8)   (3.0)  
                                                            
             296.7   288.0   573.8   5.5     23.0    47.1   

Group turnover and operating profit are derived from continuing operations.

Group exceptionals comprise costs incurred in preparing and marketing the
Company for sale.

3 Segmental information (continued)

                            Group turnover         Group operating profit   
                                                                            
                          2001     2000     2000     2001     2000      2000
                           Six      Six     Year      Six      Six      Year
                        months   months            months   months          
                         to 30    to 30    to 31    to 30    to 30 to 31 Dec
                          June     June      Dec     June     June          
                                                                            
                      £million £million £million £million £million  £million
                                                                            
Analysis by area of                                                         
operations                                                                  
                                                                            
North America         200.5    194.5    389.0    6.2      17.6     33.4     
                                                                            
Europe                84.7     83.1     163.4    (1.1)    4.6      12.2     
                                                                            
Rest of the World     11.5     10.4     21.4     0.4      0.8      1.5      
                                                                            
                      296.7    288.0    573.8    5.5      23.0     47.1     

                                                     2001     2000      2000
                                                      Six      Six      Year
                                                   months   months to 31 Dec
                                                    to 30    to 30  £million
                                                     June     June          
                                                 £million £million          
                                                                            
Group turnover analysed by geographical markets                             
                                                                            
North America                                   191.5     183.7    368.3    
                                                                            
Europe                                          72.4      72.9     143.0    
                                                                            
Rest of World                                   32.8      31.4     62.5     
                                                                            
                                                296.7     288.0    573.8    

  * Taxation
   
The tax charge of £2.1 million (2000: £5.3 million) is based on an estimated
effective tax rate on profit before goodwill amortisation and exceptionals for
the year to 31 December 2001 of 14 per cent (2000: 18 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 and the utilisation of surplus
ACT. Tax on exceptional charges was £nil million
(2000: £0.2 million credit).

  * Earnings per ordinary share
   
  * 
   
                                                        2000     2000         
                                               2001      Six     Year         
                                         Six months   months    to 31         
                                         to 30 June    to 30      Dec         
                                              pence     June    pence         
                                          per share    pence      per         
                                                         per    share         
                                                       share                  
                                                                              
Basic earnings per ordinary share                   0.2      3.5      7.9     
                                                                              
Goodwill amortisation                               1.6      1.5      3.1     
                                                                              
Exceptionals net of taxation                        1.2      0.6      0.6     
                                                                              
Basic earnings per ordinary share before goodwill   3.0      5.6      11.6    
amortisation and exceptionals                                                 

Basic earnings per ordinary share are based on profit for the period of £0.9
million (2000: £15.1 million, year to 31 December 2000: £34.1 million) and on
the weighted average number of ordinary shares in issue during the period of
431.5 million (2000: 431.5 million, year to 31 December 2000: 431.5 million).
Basic earnings per ordinary share before goodwill amortisation and exceptionals
are based on earnings of £12.9 million (2000: £24.1 million, year to 31
December 2000: £50.0 million).

Diluted earnings per ordinary share are based on an adjusted weighted average
number of shares of 435.0 million (2000: 433.5 million,
year to 31 December 2000: 434.1 million).

  * Financing and management of liquid resources
   
  * 
   
                                                        2000                
                                               2000                         
                                      2001      Six     Year                
                     Six months to 30 June   months                         
                                  £million    to 30    to 31                
                                               June      Dec                
                                           £million                         
                                                    £million                
                                                                            
Redemption of B shares (including issue             (13.4)   (11.9)  (20.7) 
costs)                                                                      
                                                                            
Increase/(decrease) in net borrowings               24.1     5.5     (15.0) 
                                                                            
                                                    10.7     (6.4)   (35.7) 

Redeemable B shares, of nominal value £14.2 million, were issued for nil
consideration during the period (2000: £13.3 million; year to
31 December 2000 £22.4 million).

  * Reconciliation of net cash flow to movement in net borrowings
   
  * 
   
                                                        2000     2000         
                                               2001      Six     Year         
                                         Six months   months    to 31         
                                         to 30 June    to 30      Dec         
                                           £million     June £million         
                                                    £million                  
                                                                              
Change in net borrowings resulting from cash flows:                           
                                                                              
Decrease in cash in the period                      (3.9)    (1.2)    (3.3)   
                                                                              
(Increase)/decrease in borrowings                   (5.0)    0.7      40.4    
                                                                              
Decrease in liquid resources                        (19.1)   (6.2)    (25.4)  
                                                                              
                                                    (28.0)   (6.7)    11.7    
                                                                              
Currency translation differences                    (2.8)    (5.5)    (7.9)   
                                                                              
(Increase)/decrease in net borrowings               (30.8)   (12.2)   3.8     
                                                                              
Net borrowings at beginning of the financial period (41.7)   (45.5)   (45.5)  
                                                                              
Net borrowings at end of the financial period       (72.5)   (57.7)   (41.7)  

  * Contingent liabilities
   
The Group was notified of a potential warranty claim in 1998, under the
contract for the sale of Pauls Malt Limited, 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.

Independent review report to Elementis plc

Introduction

We have been instructed by the Company to review the financial information for
the six months ended 30 June 2001, comprising the consolidated profit and loss
account, balance sheet, cash flow statement, statement of total recognised
gains and losses, reconciliation of movements in shareholders' funds and
related notes. 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 directors
are responsible for preparing the Interim Report in accordance with the Listing
Rules of the Financial Services Authority which 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 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 United Kingdom 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 2001.

PricewaterhouseCoopers, London

Chartered Accountants

1 August 2001

13

6

                                                                           Page

13

                                      13                                       

                                       7