LONDON, Jan. 18 -- Cookson Group today forecast higher fourth-quarter sales sequentially and year-on-year and affirmed previous guidance for annual profits before tax and one-time items. The firm acknowledged major reductions in capacity at its underperforming laminates division.

The company said it expects a net profit of £31 million in 2004. It forecast a net gain of £25 million in 2005. Cash from operations was strongly positive in the fourth quarter, the company said in a statement.

For the Electronics Group, fourth-quarter sales were similar to the third quarter and up vs. Q4 2003. Sales for each sector were also similar to the preceding quarter, Cookson said, with assembly materials and laminates up year-over-year and chemistry marginally lower.

In its third quarter, Electronics posted £169 million in sales, with assembly materials accounting for £73 million, chemistry for £62 million and laminates for £33 million.

Cookson's chemistries division continues to be the company jewel. Chemistries, which includes Enthone, recorded revenues of about £250 million in 2004, and the return on sales and operating profits before charges were nearly 12%. PCB sales made up 31% of total chemistries sales. In all, the chemistry group contributed 55% of Cookson Electronics' operating profit. The top 10 customers were AT&S, Elec and Eltek, Intel, Sanmina-SCI, Schlotter, TMSC, Viasystems, UMC, Wurth and Wus.

Laminates sales (Polyclad)totaled about £130 million, up from about £110 million in 2003. The operating profit before charges was about 2%, reversing three years of losses. Polyclad's top 10 customers were Elec and Eltek, EPC, Hitachi, Invotec, Photocircuits, Ruwel, Sanmina-SCI, Teradyne, Viasystems and Wurth. Those companies made up 55% of Polyclad's 2004 sales.

During the quarter, laminates capacity at the company's Germany facilities was cut 75%. Overhead in the U.S. -- much of it at the executive level -- and laminates production in New Hampshire was also reduced. Cookson will take a charge of £8 million in 2004, £5 million in cash. It brought the year's total to £23 million in charges.

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

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