Industrial materials group Cookson beat expectations with a 20 per cent rise in earnings and resumed dividend payments after a strong performance at its ceramics and electronics divisions.
Cookson said it would pay a final dividend for the first time since 2001, with its two biggest divisions on track to reach performance targets after a programme to cut costs and sell businesses to reduce debt built up by 1990s acquisitions.
"These are a good set of results ahead of expectations - overall we would expect market growth in ceramics and electronics in 2006," chief executive Nick Salmon said.
Its precious metals operation employs 250 people in Birmingham's Jewellery Quarter.
Cookson said headline pretax profit for 2005 was £102 million compared with £85 million a year ago. Turnover slipped slightly to £1.48 billion but it said it was ahead of schedule to reach a £100 million sell-off target - the Laminates division has been offloaded.
Only "one or two further, albeit smaller, potential business disposals" are planned.
The firm, which supplies products used in the making of glass, iron and steel, has been helped by an increase in crude steel production led by China.
But its precious metals division, supplying the jewellery industry with fabricated precious metals, faced tougher conditions, particularly in Europe with a 2005 loss.
Cookson said it would recommend a final dividend of 5p for 2005, the first paid since October 2001.
Mr Salmon said he expected the group to sustain dividend payments and flagged another £20 million in restructuring costs per year in 2006 and 2007, centred on ceramics.
"We have not done enough, particularly in our ceramics business.
"We are likely to continue that rate of spend for the next two years before any declines and the bulk of that spend will be in ceramics," Mr Salmon said.
"The majority of that will be in Europe and North America while we will be investing in additional production capacity in Asia Pacific and Brazil."
The ceramics restructuring has already resulted in the merger of two South African factories onto a single site, the closure of a linings factory in Italy, the downsizing of a linings factory in Germany and overhead reductions in the US, the UK and Continental Europe.
The Electronics division has faced downsizing in Sweden, overhead reductions in Europe, and job cuts in Singapore.
Both divisions have also see the relocation of production capacity from the US to Mexico.
In Precious Metals there has been an eight per cent reduction in the US workforce and consolidation into one factory, and the completion of restructuring in France.
Cookson stated: "Demand for finished jewellery products is influenced to a large extent by both consumer confidence and consumer preferences. Consumer confidence was depressed in the US and in Europe and this trend was exacerbated by the shift in customers' discretionary spend away from jewellery products and more towards consumer electronic products such as mobile phones and MP3 players.
"The preference of buyers and wearers of jewellery for white metals and gemstones, which was evident in 2004, continued in 2005."
Soaring gold prices - from $420 an ounce in the first half of the year to $520 at the year end - had not helped.
Hallmarking of gold jewellery items in the UK fell by 18 per cent in 2005 compared to 2004.
Cookson's other products range from flow-control systems for the iron and steel industry to laminates for printed circuit boards.
Headquartered in London, Cookson employs about 16,000 people in more than 35 countries and sells its products in more than 100 countries. ..SUPL: