This trading update precedes the publication of the group’s preliminary results for the year to 31 March 2005, due on 19 May 2005.

FULL YEAR PERFORMANCE EXPECTATIONS

• Group turnover up by 6% to £2.3 billion (up nearly 10% in local currency), driven by further good growth in global plasterboard demand, increased plaster volumes and improved selling prices.


• Underlying profit before tax (before goodwill and exceptional items) up by some 28% to about £285 million (last year £222.8 million).


• Underlying operating profit up more than 20% to around £305 million (last year £249.2 million), after an adverse currency translation impact of circa £5 million and group restructuring costs some £4 million lower than last year’s £20.2 million.


• European operating profit up more than 10% to over £215 million (last year £193.9 million), benefiting from continuing strong demand and high plant utilisation levels, the recovery of substantially higher input costs through selling price increases, and improved performance in Germany and the Nordic countries.


• North American operating profit up nearly 75% to about £70 million (last year £40.1 million), despite a higher restructuring charge, patent protection costs and adverse currency translation, due to a substantial improvement in US selling prices and further good regional demand for wallboard.


• Rest of the World operating profit up more than 20% to over £18 million (last year £15.2 million), driven by a strong performance from a buoyant South African market, improved South American results and further good volume growth in Asia.


• Group cash generation remaining strong, with net debt moving below the previous year-end level of £495.0 million, after the buy-out of most of BPB’s Asian minorities and substantially increased capital expenditure.

GROUP TRADING HIGHLIGHTS

• Group plasterboard volumes up by circa 5%, due principally to good demand growth across Europe (notably in the British Isles, Spain and Eastern Europe), strong volume growth in Asia and South Africa, and continuing high levels of housing and renovation activity in North America.


• Increases in average selling prices for plasterboard across Europe have broadly offset the impact of significant cost increases for energy, freight, steel and polystyrene beads.


• US wallboard average realised prices for the year are up almost 25% to around $117 per 1,000 square feet, with second-half prices averaging about $120, more than offsetting significant cost increases for energy, freight and paperboard liner. BPB’s average selling prices are now spotting around $122.


• Building plaster volumes advancing by more than 6%, with further demand in Spain and Italy, buoyant sales in the British Isles and high growth in the developing markets of Turkey and Egypt.


• External sourcing of plasterboard liner in continental Europe and restructuring actions taken last year in Germany and Belgium are major contributors to annual cost savings representing around 1% of group turnover.


• BPB recently announced a further substantial long-term plasterboard liner supply agreement and the likely closure of the group’s remaining paper mill, located at Aberdeen in the UK, involving an estimated pre-tax exceptional charge of around £35 million.


• Continued investment in supporting BPB’s profitable growth, primarily focusing on the development of a new European information system and the addition of extra management resources to ensure the delivery of BPB’s focused capacity expansion programme over the medium term.

CHIEF EXECUTIVE’S OVERVIEW

Commenting on the group’s full year performance expectations, Richard Cousins, chief executive said:

“BPB will deliver an excellent full year performance, with underlying profits advancing by some 28% to about £285 million. Against the background of growing demand in the group’s key markets, we are moving ahead with our business plan to grow profitably through investment in developing BPB’s global leadership in plasterboard and building plasters.”

Notes to editors

• 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 9.00 am today to discuss this trading update. The dial-in number is +44 (0) 20 7162 0180 and the password is BPB.



- ENDS -




Contacts
Paul Hollingworth, Finance Director (01753 898822)
James Murgatroyd, Finsbury (020 7251 3801)
Available on BPB’s website: www.bpb.com