This trading update precedes the publication of the group’s interim results and dividend for the six months to 30 September 2004, due on 18 November.

FIRST HALF PERFORMANCE EXPECTATIONS

• Group turnover up around 5% to over £1.1 billion (up 10% in local currency), driven by further good growth in global plasterboard demand and improved selling prices.


• Underlying profit before tax (before goodwill and exceptional items) of around £143 million, up 33% on the corresponding period (£107.8 million), after an adverse currency translation impact of some £5 million and group restructuring costs of circa £6 million (£10 million corresponding period).


• European operating profit up by more than 10% on the corresponding period (£97.1 million), with further good overall volume growth, better selling prices and improving operating efficiencies offsetting higher input costs and some £3 million of additional UK pension costs.


• North American operating profit more than double the corresponding period’s £17.3 million, despite significant cost inflation, due to improved US selling prices and further good regional sales volume growth.


• Rest of the World operating profit up around 30% on the corresponding period (£7.3 million), benefiting from continued strong volume growth in Asia and buoyant demand in South Africa.

FIRST HALF TRADING HIGHLIGHTS

• Group plasterboard volumes will increase by around 7%, due principally to further volume growth in the British Isles, Eastern Europe and Asia, and continuing strong levels of housing and renovation activity in the US and Canadian markets.


• Average selling prices for plasterboard across Europe are modestly higher compared to the corresponding period. In the US wallboard market, the average realised price increased to around $114 per 1,000 square feet, an improvement of some $24 on the average for the corresponding period; BPB selling prices are currently averaging around $120.


• Overall building plaster volumes are expected to increase by around 6%, with good sales growth in the British Isles, Italy, Egypt and Turkey, and increased demand in Spain following planned recent investments in lightweight plaster technology.


• Commodity cost inflation has affected underlying group operating profit by approximately £25 million as a result of worldwide increases in the prices of oil, gas, freight and steel and rising costs for US paperboard liner.


• Cash generation remains strong, facilitating the group’s programme of investing in further opportunities for profitable growth in plasterboard and building plasters. Net debt is expected to be around the previous year-end level despite the cost of buying-out most of BPB’s minority interests in Asia and substantially higher capital investment in the last six months.

CHIEF EXECUTIVE’S OVERVIEW

Commenting on the group’s first half trading update and the full year outlook, Richard Cousins, chief executive said:

“ BPB will deliver an excellent first half performance with underlying profit advancing by 33%, driven by sustained positive trends in sales volumes and pricing levels in our key markets.

Following our strong performance in the second half of last year, and with the impact of the continuing rise in commodity costs worldwide, we anticipate a less rapid rate of profit improvement during this year’s second-half but still expect good overall progress for the year as a whole.”

• BPB is the world leader in the supply of plasterboard and gypsum plasters, and a major supplier of insulation, ceiling tiles and related products for interiors, serving growing markets for building systems in over 50 countries.


• There will be an analysts’ conference call at 9.00am today to discuss this trading update. The dial-in number is +44 (0) 20 7162 0183 and the password is BPB.