Trading for the year-to date has seen greater regional variation than has been the case for some time. Positive sales performances have been recorded in Australia, Latin America and Europe with Eastern Europe in particular continuing to achieve significant growth. These increases, however, have been largely offset by weaker sales in the US and in some South East Asian markets. Pricing in the majority of our markets around the world has been stable although there continues to be some pressure in the UK, while the strength of the Czech currency is having a significant adverse effect on the value of Cutisin's export business. Elsewhere currency effects are generally positive.
Increased energy prices are clearly a major source of pressure on manufacturing cost and this is expected to continue to be the case during the second half of this year.
We remain committed to improving the business through improving our products, technologies and market positioning. As previously reported, we are accelerating our investment in Cutisin and we are also well advanced in actions for developing and improving our other operations. As a result, while the business is facing some cost and market challenges in the immediate future, the outlook for the latter stages of 2006 into 2007 continues to be encouraging. The Directors therefore remain confident and optimistic about the future prospects for the company.
| Graeme Alexander | Chief Executive | 01236 879191 |
| John Neilson | Finance Director | 01236 879191 |
| Jon Coles/Mark Antelme | Brunswick | 020 7404 5959 |