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Acquisition of subsidiaries: a cash outflow of £25.8 million (HY 2011: £nil) arose<br />
principally relating to the acquisition of Metallurgica, which completed on 29 March 2012.<br />
Disposal of subsidiaries: a net cash inflow of £14.8 million (HY 2011: £nil) arose<br />
principally relating to the disposal of the US operations of the Precious Metals Processing<br />
business, which completed on 1 May 2012.<br />
Free cash flow<br />
Free cash outflow for the first half of 2012 was £3.8 million, £9.2 million lower than the<br />
£13.0 million outflow in the first half of 2011.<br />
The free cash inflow for the year ended June 2012 was £52.7 million (FY 2011: £43.5<br />
million).<br />
Net cash flow before financing<br />
Net cash outflow before financing for the first half of 2012 was £16.9 million, £4.3 million<br />
lower than the first half of 2011 due principally to the increase in cash inflow from<br />
operating activities described above.<br />
Net cash flow from financing activities<br />
Net cash outflow from financing activities (before movement in borrowings) was<br />
£55.2 million (HY 2011: £31.1 million), principally comprising the following:<br />
Net increase in borrowings: there was an increase of £38.5 million in the period (HY 2011:<br />
£36.4 million).<br />
Purchase of treasury shares: a cash outflow of £14.8 million (HY 2011: £4.4 million) arose<br />
relating to the purchase by the Employees Benefit Trust in March 2012 of Cookson shares<br />
in respect of the award of shares to employees under the Cookson Group Long-Term<br />
Incentive and Deferred Share plans.<br />
Dividends paid: a cash outflow of £40.3 million arose in respect of the payment in June<br />
2012 of the final dividend for 2011 (HY 2011: £31.8 million).<br />
Capital contribution to Alent businesses: this totalled £34.6 million during the period (HY<br />
2011: £0.3 million).<br />
Net decrease in cash and cash equivalents<br />
The net decrease in cash and cash equivalents arising from the cash flows described above<br />
was £72.1 million in the first half of 2012, compared with £52.3 million in the first half of<br />
2011. After a £2.4 million negative foreign exchange adjustment (HY 2011: £nil), this<br />
resulted in cash and cash equivalents at the end of the period of £54.1 million (HY 2011:<br />
£64.5 million), a decrease of £10.4 million.<br />
3.1.2 Comparison of the year ended 31 December 2011 with the year ended 31 December<br />
2010<br />
Net cash inflow from operating activities<br />
In 2011, <strong>Vesuvius</strong> generated £100.0 million of net cash inflow from operating activities,<br />
£16.8 million higher than in 2010.<br />
The cash outflow of £60.1 million from trade and other working capital reflects the increase<br />
in underlying revenue in 2011 and the high level of commodity metal prices at year-end.<br />
Cash outflow for restructuring was £9.4 million in 2011, following the £14.8 million paid in<br />
2010, of which the majority in each year related to the cost-saving initiatives commenced in<br />
the current and prior years. The cash impact of the disposal of the US Precious Metals<br />
Processing business, which completed on 1 May 2012, is expected to be broadly neutral.<br />
The cash outflow for additional pension plan funding contributions included the following:<br />
UK Plan: payments totalling £7.0 million were made into the UK Plan in 2011 based upon<br />
the current agreement with the UK Plan Trustee.<br />
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