Cookson Reports Jump in Sales and Profits

Mar. 2 -- Cookson Group plc reported a 30% growth in revenues and 126% rise in trading profits in 2010, with 40% sales growth in its assembly materials (solders and related products) business. However revenue growth was strongly influenced by higher prices of tin, silver and other raw materials, which limited the improvement in its return on sales.

The Group’s electronics division (including assembly materials and plating chemicals) reported revenues of UK£721 million, 36% higher than 2009. After adjusting for raw materials and exchange rate changes underlying revenue increased by 18%. The division’s trading profit of £71 million was 81% higher than the prior year and the return on sales margin was 9.8% (2009: 7.4%). The company estimated that the effect on revenue of passing through higher commodity metals prices reduced the reported margin by about 1.3 percentage points.

In a statement Cookson noted the strength of the electronics business last year and looked forward to further single-digit growth in 2011. “Electronics end-markets progressively improved during the year with particularly strong growth in demand for personal computers, mobile phones and automotive electronics. According to estimates from Henderson Ventures, global production of electronic equipment (measured in US dollars at constant currency) grew in 2010 by 17%, following the 11% decrease in 2009. Global PC unit shipments (both traditional and tablet PCs) were estimated to be 21% higher, whilst global unit shipments of mobile phones increased 29%. Other strong areas of growth within consumer electronics included flat screen TVs, games consoles and e-readers. “

The company attributed its healthy results to the revival in the electronics sector and “the continuation of the strategy to focus on higher margin, enhanced technology products. For solder products more value-added products such as solder paste (for which volumes were up 30%) have been stronger than the more commoditised products such as bar solder (up 10%), partially reflecting the continuing shift from wave soldering to surface mount technology for the production of PCBs.”