Trading Update

This trading update is published ahead of the interim announcement of the Group's results for the six months to 30 June 2001, due on 3 September 2001.

Continued market out-performance

Growth in line with expectations

Strong balance sheet and cash flow

In both our full year and AGM statements, we anticipated that the trading environment would be challenging in the current year and this has indeed been the case. However,Group sales and profits are ahead of the comparable period last year and we areconfident that we have out-performed our markets in all our main regions.

UK
In the UK sales and profits have increased in all our principal activities with continuing good performance in insulation, ceilings and partitioning and a particularly strong result in roofing.

Europe
In Europe our businesses have continued to make progress. Demand in France and Benelux has remained strong and both our ceilings and industrial insulation divisions have performed well. This has more than offset a disappointing performance from our embryonic business in Poland.

We anticipated a further decline in the German market and structured our German business to optimise performance in this adverse environment.

While operating profits are below last year's level, our business has traded wellmaintaining sales and significantly out-performing the market.

RoW
Our industrial insulation distribution business in the United States continued to improve on the recovery made in 2000.

We further strengthened our UK market position making 3 small bolt-on acquisitions for a total consideration of £10.4 million.

Balance sheet, cash flow and interest cover remain strong with gearing at a similar level to the year end.