FORM 6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13(a)-16 OR 15(d)-16 OF THE SECURITIES EXCHANGE ACT OF 1934

~~November~~May 1926, ~~2003~~2004 Commission file number 333-12714

LUCITE INTERNATIONAL
GROUP HOLDINGS LIMITED

(Exact Name of Registrant Guarantor as Specified in its Charter)

England and Wales
(Jurisdiction of incorporation or organisation)

Queens Gate, 15-17 Queens Terrace, Southampton SO14 3BP, United Kingdom
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F

Form 20-F ~~[X]~~x Form 40-F ~~[ ]~~o

Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934

Yes [o ] No ~~[X]~~x

TABLE OF CONTENTS

UNAUDITED CONSOLIDATED ~~FINANCIAL~~PROFIT AND LOSS ACCOUNTS UNAUDITED CONSOLIDATED BALANCE SHEETS UNAUDITED CONSOLIDATED STATEMENTS OF TOTAL RECOGNISED GAINS AND LOSSES UNAUDITED CONSOLIDATED CASH FLOW STATEMENTS NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OPERATING AND FINANCIAL REVIEW AND PROSPECTS ~~SIGNATURE~~

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNTS

			Three months ended		~~Three months ended~~							~~Nine months ended~~
					September 30,				September 30,			September 30,			September 30,
			March 31,				March 31,
					2002				2003			2002			2003
			2003				2004
	Notes		£’m		~~£’m~~		£’m		~~£’m~~			~~£’m~~			~~£’m~~
Turnover	3	3		179		~~147~~		170		~~175~~			~~437~~			~~528~~
Operating costs before amortisation of goodwill and other intangible assets	4	4		(164	)	~~(138~~	)	(155	)	~~(153~~	)		~~(413~~	)		~~(473~~	)
Amortisation of goodwill and other intangible assets	4	4		(1	)	(2	)	(1	)	(2	)		(4	)		(4	)
Total operating costs	4	4		(165	)	~~(140~~	)	(156	)	~~(155~~	)		~~(417~~	)		~~(477~~	)
Operating profit	3, 4	~~3, 4~~		14		7		14		20			20			51
Net interest payable and similar charges	5	5		(16	)	—		2		~~(10~~	)		~~(20~~	)		~~(35~~	)
Profit on ordinary activities before taxation						7				10			—			16
Profit/(loss) on ordinary activities before taxation				(2	)			16
Taxation on loss on ordinary activities						(1	)			(1	)		(1	)		(3	)
Taxation on profit/(loss) on ordinary activities				(1	)			(3	)
Profit/(loss) on ordinary activities after taxation				(3	)	6		13		9			(1	)		13
Equity minority interests				(1	)	—		(1	)	(1	)		(1	)		(3	)
Profit/(loss) for the financial period				(4	)	6		12		8			(2	)		10

See the accompanying notes to the unaudited consolidated financial statements

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

UNAUDITED CONSOLIDATED BALANCE SHEETS

					December 31,				September 30,
			December 31, 2003				March 31, 2004
					2002				2003
	Notes		£’m				£’m
	Notes				£’m				£’m
Fixed assets
Fixed assets
Intangible assets				83				82
Intangible assets						89				84
Negative Goodwill				(5	)			(5	)
Negative Goodwill						(6	)			(5	)
Tangible assets				332				323
Tangible assets						358				338
				410				400
						441				417
Current assets
Current assets
Stocks	7			75				74
Stocks		7				75				76
Debtors				107				117
Debtors						96				118
Cash at bank and in hand				30				27
Cash at bank and in hand						11				29
				212				218
						182				223
Total assets				622				618
Total assets						623				640
Creditors – amounts falling due within one year				(115	)			(122	)
Creditors — amounts falling due within one year						(119	)			(125	)
Net current assets				97				96
Net current assets						63				98
Total assets less current liabilities				507				496
Total assets less current liabilities						504				515
Creditors – amounts falling due after more than one year				(332	)			(306	)
Creditors — amounts falling due after more than one year						(330	)			(336	)
Provisions for liabilities and charges				(27	)			(29	)
Provisions for liabilities and charges						(32	)			(31	)
Net assets				148				161
Net assets						142				148
Shareholder’s equity
Shareholder’s equity
Called up equity share capital				175				175
Called up equity share capital						175				175
Profit and loss account				(42	)			(30	)
Profit and loss account						(45	)			(37	)
Total equity shareholder’s funds				133				145
Total equity shareholder’s funds						130				138
Equity minority interests				15				16
Equity minority interests						12				10
Capital employed				148				161
Capital employed						142				148

See the accompanying notes to the unaudited consolidated financial statements

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF
TOTAL RECOGNISED GAINS AND LOSSES

	Three Months Ended					~~Nine Months Ended~~
	September 30,			September 30,		September 30,			September 30,
	March 31,			March 31,
	2002			2003		2002			2003
	2003			2004
	£’m			£’m		~~£’m~~			~~£’m~~
Profit /(loss) for the financial period		6(4	)		812		(2	)		10
Currency translation differences on foreign currency net investments		(5—	)		2—		~~(13~~	)		(2	)
Total recognised gains & losses relating to the period		1(4	)		1012		~~(15~~	)		8

See the accompanying notes to the unaudited consolidated financial statements

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

UNAUDITED CONSOLIDATED CASH FLOW STATEMENTS

		Three Months Ended	~~Three Months Ended~~							~~Nine Months Ended~~
			September 30,				September 30,			September 30,			September 30,
		March 31,				March 31,
			2002				2003			2002			2003
		2003				2004
		£’m	~~£’m~~			£’m	~~£’m~~			~~£’m~~			~~£’m~~
Operating profit			14	7			14	20			20			51
Depreciation of tangible fixed assets	~~Depreciation of tangible fixed assets~~		10	9			10	9			30			28
Amortisation of intangible fixed assets	~~Amortisation of intangible fixed assets~~		1	2			1	2			4			4
(Increase) / decrease in stocks	~~(Increase) / decrease in stocks~~		(1	(5)	)		—	9			2			—
	Decrease / (increase) in debtors			8				7			(17	)		(19	)
Increase in debtors			(28	)			(10	)
	Increase / (decrease) in creditors			4				(9	)		1			4
Increase in creditors			17				4
Movement on provisions	~~Movement on provisions~~		1	1			—	(1	)		2			—
Exceptional cash flows	~~Exceptional cash flows~~		(1	(1)	)		—	—			(2	)		(1	)
Net cash flow from operating activities			13	25			19	37			40			67
Interest paid	~~Interest paid~~		(4	(3)	)		(3	(3)	)		~~(15~~	)		~~(15~~	)
	New issue High Yield Bond fees			—				—			—			(1	)
Returns on investments and servicing of finance			(4	)			(3	)
Returns on investments and servicing of finance				(3	)			(3	)		(15	)		(16	)
Taxation paid			—				(1	)
Taxation paid				(2	)			(1	)		(4	)		(3	)
Capital expenditure and financial investment			(4	)			(7	)
Capital expenditure and financial investment				(8	)			(6	)		(16	)		(15	)
Issue of debt due within one year			1				—
Equity dividends paid to minorities				—				(1	)		(3	)		(3	)
Issue of debt due after more than one year			5				4
Distribution to minority interests				—				(3	)		—			(3	)
Repayment of debt due within one year			—				—
	Issue of debt due after more than one year			—				—			2			37
Repayment of debt due after one year			—				(15	)
	Repayment of debt due within one year			(5	)			—			(8	)		(8	)
Financing			6				(11	)
	Repayment of debt due after one year			(6	)			(6	)		(4	)		(38	)
Increase/(decrease) in cash			11				(3	)
Financing				(11	)			(6	)		(10	)		(9	)
Increase/(decrease) in cash				1				17			(8	)		18

See the accompanying notes to the unaudited consolidated financial statements

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1 Business description

1		Business description

		Lucite International Group Holdings Limited is a wholly owned subsidiary of Lucite International Limited. Lucite International Limited does not trade and has no investments other than Lucite International Group Holdings Limited and an interest in the newly formed Lucite International China Holdings Limited with the remaining interest being held by a subsidiary of Lucite International Group Holdings Limited. The principal shareholder and ultimate controlling party of Lucite International Limited is Charterhouse Capital Partners LLP through funds managed by it. Lucite International Group Holdings Limited is a non-trading holding company for the remainder of the subsidiary companies included in the Lucite International Group. Lucite International Group Holdings Limited and its subsidiary companies (together referred to as “Lucite International” or “the Company”) are engaged in the production and distribution of methacrylate monomers, the principal building block of acrylic, and the production and distribution of acrylic-based polymers, resins, sheet and composites. These products are manufactured at facilities located in the Americas, Europe and Asia and are sold throughout the world.

2		Basis of preparation

		The accounting policies used to prepare these financial statements are consistent with those adopted in the financial statements for the year ended December 31, 2003 as reported in our annual report on Form 20-F filed on April 1, 2004.

		The financial statements and notes included within this form 6-K should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 20-F, where additional footnotes can be found.

		In the opinion of management, the accompanying unaudited consolidated financial statements of Lucite International Group Holdings Limited and subsidiaries (the Company) contain all adjustments, including usual recurring adjustments, necessary to present fairly, in all material respects, the Company’s consolidated financial position as of March 31, 2004 and December 31, 2003 and the consolidated results of operations, net profit and cash flows for the three month periods ended March 31, 2004 and March 31, 2003. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 20-F. The results of operations for the three-month period ended March 31, 2004 are not necessarily indicative of the results to be expected for the full year.

Lucite International Group Holdings Limited is a wholly owned subsidiary of Lucite International Limited. Lucite International Limited does not trade and has no investments other than Lucite International Group Holdings Limited and an interest in the newly formed Lucite International China Holdings Limited with the remaining interest being held by a subsidiary of Lucite International Group Holdings Limited. The principal shareholder and ultimate controlling party of Lucite International Limited is Charterhouse Development Capital Limited through funds managed by it. Lucite International Group Holdings Limited is a non-trading holding company for the remainder of the subsidiary companies included in the Lucite International Group. Lucite International Group Holdings Limited and subsidiary companies (together referred to as “Lucite International” or “the Company”) are engaged in the production and distribution of methacrylate monomers, the principal building block of acrylic, and the production and distribution of acrylic based polymers, resins, sheet and composites. These products are manufactured at facilities located in the Americas, Europe and Asia and are sold throughout the world.

2 Basis of preparation

The accounting policies used to prepare these financial statements are consistent with those adopted in the financial statements for the year ended December 31, 2002 as reported on Form 20-F filed on April 11, 2003.

The financial statements and notes included within this form 6-K should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 20-F, where additional footnotes can be found.

In the opinion of management, the accompanying unaudited consolidated financial statements of Lucite International Group Holdings Limited and subsidiaries (the Company) contain all adjustments including usual recurring adjustments necessary to present fairly, in all material respects, the Company’s consolidated financial position as of September 30, 2003 and December 31, 2002 and the consolidated results of operations, net profit and cash flows for the three and nine month periods ended September 30, 2003 and September 30, 2002. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 20-F. The results of operations for the three and nine month periods ended September 30, 2003 are not necessarily indicative of the results to be expected for the full year.

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Segmental reporting

		Three Months Ended	~~Three Months Ended~~							~~Nine Months Ended~~
			September 30,				September 30,			September 30,			September 30,
		March 31,				March 31,
			2002				2003			2002			2003
		2003				2004
		£’m	~~£’m~~			£’m	~~£’m~~			~~£’m~~			~~£’m~~
Group turnover
Turnover
Upstream	~~Upstream~~		132	~~104~~			125	~~126~~			~~298~~			~~385~~
Downstream	~~Downstream~~		69	66			69	71			~~205~~			~~210~~
Inter-class elimination	~~Inter-class elimination~~		(22	~~(23~~)	)		(24	~~(22~~)	)		~~(66~~	)		~~(67~~	)
				147				175			437			528
			179				170
Group operating profit
Operating profit
Upstream	~~Upstream~~		8	5			9	18			6			41
Downstream	~~Downstream~~		6	4			5	4			18			14
				9				22			24			55
Operating profit			14				14
	Amortisation of goodwill and other intangible assets			(2	)			(2	)		(4	)		(4	)
Depreciation
	Operating profit			7				20			20			51
Upstream			7				7
Depreciation
Downstream			3				3
	Upstream			7				8			23			22
			10				10
	Downstream			2				1			7			6
Amortisation
				9				9			30			28
Upstream			1				1
Downstream			—				—
			1				1

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Cost of sales, gross profit, distribution and administrative expenses

		Three Months Ended	~~Three Months Ended~~							~~Nine Months Ended~~
			September 30,				September 30,			September 30,			September 30,
		March 31,				March 31,
			2002				2003			2002			2003
		2003				2004
		£’m	~~£’m~~			£’m	~~£’m~~			~~£’m~~			~~£’m~~
Turnover			179	~~147~~			170	~~175~~			~~437~~			~~528~~
Cost of sales			(140	~~(115~~)	)		(132	~~(132~~)	)		~~(342~~	)		~~(407~~	)
Gross profit			39	32			38	43			95			~~121~~
Distribution costs	~~Distribution costs~~		(12	~~(10~~)	)		(11	~~(10~~)	)		~~(34~~	)		~~(32~~	)
Administrative expenses before amortisation and research and development costs	~~Administrative expenses before amortisation and research and development costs~~		(10	~~(10~~)	)		(10	(9)	)		~~(28~~	)		~~(28~~	)
Amortisation of goodwill and other intangible fixed assets	~~Amortisation of goodwill and other intangible fixed assets~~		(1	(2)	)		(1	(2)	)		(4	)		(4	)
Research and development costs	~~Research and development costs~~		(2	(3)	)		(2	(2)	)		(9	)		(6	)
Total administrative expenses	~~Total administrative expenses~~		(13	~~(15~~)	)		(13	~~(13~~)	)		~~(41~~	)		~~(38~~	)
Total operating expenses			(25	~~(25~~)	)		(24	~~(23~~)	)		~~(75~~	)		~~(70~~	)
Operating profit			14	7			14	20			20			51

Net interest payable and similar charges

	Three months ended						~~Nine months ended~~
	September 30,			September 30,			September 30,		September 30,
	March 31,			March 31,
	2002			2003			2002		2003
	2003			2004
	£’m			£’m			~~£’m~~		~~£’m~~
Interest payable on senior credit facilities		43			32			9		8
Interest payable on senior notes		34			5			10		12
Amortisation of debt issue costs		—			—			1		1
Net interest payable		7			7
Net interest payable		7			8			20		21
Foreign exchange (gain)/loss on external debt		9			(9	)
Foreign exchange loss on external debt		(7	)		2			—		14
Net interest payable and similar charges		16			(2	)
Net interest payable and similar charges		—			10			20		35

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

6 EBITDA EBITDA is presented not as an alternative measure of operating results or cash flows from operations as determined in accordance with generally accepted accounting principles, but because it is an accepted financial indicator of the ability to incur and service debt. EBITDA is not necessarily comparable with similarly titled measures presented by other companies. As a performance measurement, EBITDA closely represents operating profit and can be reconciled to it in the following way:

EBITDA is presented not as an alternative measure of operating results or cash flows from operations as determined in accordance with generally accepted accounting principles, but because it is an accepted financial indicator of the ability to incur and service debt. EBITDA is not necessarily comparable with similarly titled measures presented by other companies. As a performance measurement, EBITDA closely represents operating profit and can be reconciled to it in the following way:


	Three months ended
	March 31,		March 31,
	2003		2004
	£’m		£’m
Operating profit		14		14
Depreciation and amortisation of goodwill and intangible assets		11		11

EBITDA		25		25

	Three months ended				Nine months ended
	September 30,		September 30,		September 30,		September 30,
	2002		2003		2002		2003
	£’m		£’m		£’m		£’m
Operating profit		7		20		20		51
Depreciation and amortisation of goodwill and intangible assets		11		11		34		32
EBITDA		18		31		54		83

Stocks

	December 31,		~~September~~March 3031,
	2002		2003
	2003		2004
	£’m		£’m
Raw material and consumables		2629		2426
Finished goods and goods for re-sale		49		52
Finished goods and goods for resale		46		48
		75		7674

Bank and other borrowings

During June 2003 the Company issued 50 million Euro of 10.25% senior notes due May 15, 2010. These new notes are not fungible with the existing notes issued May 2000 but have substantially similar terms as them. The new notes were issued at 104% and the premium of 2 million Euro associated with the issue is being written off over the life of the notes. An offer was made in September to the holders of the existing notes to exchange their existing notes for new notes having the same terms as the notes offered in June 2003 and constituting a single series of notes. This offer closed on October 1, 2003 and the majority of notes have been exchanged.


	December 31,			March 31,
	2003			2004
	£’m			£’m
Senior credit facilities:
Term loan A		37			35
Term loan B		69			67
Term loan C		45			43
Revolving Credit Facility		19			4
Senior notes		176			167
Finance leases		4			4
Unamortised senior notes premium		2			1
Unamortised issue costs		(8	)		(7	)

Total debt excluding China bank loans		344			314
China bank loans		—			4

Total debt		344			318

The proceeds of the recent offering were used to make a voluntary prepayment to the senior banks of 30 million Euro with the balance used to repay the revolving credit balance until required to be drawn upon for investment in the China Project and to pay the associated transaction fees.

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

		December 31,			September 30,
		2002			2003
		£’m			£’m
Senior credit facilities:
	Term loan A		69			44
	Term loan B		69			71
	Term loan C		50			48
	Revolving Credit Facility		32			14
Senior notes			130			140
New issue Senior notes			—			37
Unamortised issue costs			(7	)		(9	)
Total Debt			343			345

9		Other information

		On 25 March 2003, the Company received notification that the European Commission would investigate Lucite International Limited and Lucite International UK Limited with regard to possible participation in anti-competitive practices contrary to Article 81 of the Treaty of Rome. Such investigation is a preliminary step and does not imply that the Company has engaged in any unlawful activities relating to anti-competitive practices. There is no strict deadline to complete anti-competitive inquiries and their duration is determined by the complexity of each case, the exercise of the rights of defence and by the Commission’s procedures. Lucite International Limited is co-operating fully with the European Commission on these matters. It is not possible at this stage to estimate what the outcome of this investigation will be.

9 Other information

On 25 March 2003, the Company received notification that the European Commission would investigate Lucite International Limited and Lucite International UK Limited with regard to possible participation in anti-competitive practices contrary to Article 81 of the Treaty of Rome. Such investigation is a preliminary step and does not imply that the Company has engaged in any unlawful activities relating to anti-competitive practices. There is no strict deadline to complete anti-competitive inquiries and their duration is determined by the complexity of each case, the exercise of the rights of defence and by the Commission’s procedures. Lucite International Limited is co-operating fully with the European Commission on these matters. It is not possible at this stage to estimate what the outcome of this investigation will be.

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

10 SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN UK AND US ACCOUNTING PRINCIPLES

10		Summary of significant differences between UK and US accounting principles

		The financial statements are prepared and presented in accordance with UK GAAP, which differs in certain significant respects from US GAAP. The following is a summary of the effect on net income and shareholder’s equity of the differences between UK GAAP and US GAAP.

		Effect on the loss for the financial period of differences between UK GAAP and US GAAP

The financial statements are prepared and presented in accordance with UK GAAP, which differs in certain significant respects from US GAAP. The following is a summary of the effect on net loss and shareholders’ equity of the differences between UK GAAP and US GAAP.


			Three months ended
			March 31,			March 31,
			2003			2004
			£’m			£’m
Profit/(loss) for the financial period under UK GAAP				(4	)		12
Adjustments to conform with US GAAP :
Depreciation of tangible fixed assets				1			1
Amortisation of goodwill	(i	)		1			1
Amortisation of other intangibles	(i	)		(3	)		(3	)
Pensions				—			—
Capitalisation of interest less amortisation				—			—
Foreign exchange gain/(loss) on debt				(4	)		3
Fair value of derivative financial instruments				3			—
Deferred taxation:
Arising on UK GAAP results				—			(2	)
Arising on other US GAAP adjustments				(1	)		1

Net Profit/(loss) under US GAAP				(7	)		13

Effect on the loss for the financial period of differences between UK GAAP and US GAAP

		Three months ended						Nine months ended
		September 30,			September 30,			September 30,			September 30,
		2002			2003			2002			2003
		£’m			£’m			£’m			£’m
Profit/(loss) for the financial period under UK GAAP			6			8			(2	)		10
Adjustments to conform with US GAAP:
	Purchase accounting adjustments:
	Depreciation of tangible fixed assets		1			1			4			4
	Amortisation of goodwill		2			2			4			4
	Amortisation of other intangibles		(3	)		(3	)		(10	)		(9	)
	Capitalisation of interest less amortisation		—			1			1			1
	Amortisation of loan arrangement fees		—			(1	)		—			(1	)
	Pensions		—			—			(1	)		—
	Foreign exchange loss on debt		—			—			(6	)		(2	)
	Fair value of derivative financial instruments		—			(1	)		—			(1	)
	Deferred taxation:
	Arising on UK GAAP results		—			—			1			—
	Arising on other US GAAP adjustments		—			—			1			(1	)
Net Profit/(loss) under US GAAP			6			7			(8	)		5

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Effect on consolidated shareholder’s funds of differences between UK GAAP and US GAAP

			December 31, 2002				September 30, 2003
						December 31, 2003				March 31, 2004
			~~£’m~~			£’m	~~£’m~~			£’m
Consolidated shareholder’s funds under UK GAAP				~~130~~			133	~~138~~			145
Adjustments to conform with US GAAP:
Adjustments to conform with US GAAP :
	Purchase accounting adjustments			(20	)			(21	)
Business combinations							(21	)			(22	)
Exchange translation on goodwill and intangible assets	~~Exchange translation on goodwill and intangible assets~~			2			(9	1)			(11	)
	Capitalisation of interest less amortisation			7				8
Pensions							(6	)			(6	)
	Capitalisation of loan arrangement fees			1				—
Capitalisation of interest less amortisation							9				9
	Pensions			(3	)			(3	)
Fair value of derivative financial instruments		(ii)					1				1
	Fair value of derivative financial instruments			—				(1	)
Deferred taxation							30				29
	Deferred taxation			28				27
Consolidated shareholder’s funds under US GAAP							137				145
Consolidated shareholder’s funds under US GAAP				145				149

For an explanation of the significant differences between UK GAAP and US GAAP please refer to the annual Form 20-F.

Derivative financial instruments

The Company does not engage in derivatives trading, market-making or other speculative activities. The Company has entered into agreements to manage certain exposures to fluctuations in the price of natural gas, a major feedstock. It uses swap and cap and collar contracts to provide stability to the Company’s exposure to changes in the price of natural gas. These contracts generally involve the exchange of variable gas costs for costs which lie within a contracted range. Net amounts paid or received are reflected as adjustments to operating costs.

Changes in the fair value of derivative financial instruments are measured at the balance sheet date and recognised in current earnings or other comprehensive income depending on whether the derivative is designated as part of a hedge transaction and, if it is, the type of transaction.

Our natural gas contracts are not designated as qualifying hedge instruments under FAS133 and accordingly changes in the fair value of the contracts are reflected in current earnings. As at 30 September 2003 the Company recognised a liability of £0.6 million in respect of these contracts. This is an increase in liability of £1 million for the three months ended September 30, 2003 due to the price of gas futures for the remainder of 2003 lower than the contract strike price.

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(i) Goodwill and intangible assets The annual review of impairment required under FAS 142 was carried out as at June 30, 2003 and the results indicated that no impairment was deemed to exist. The next impairment review will be carried out as at June 30, 2004. The following table sets out intangible asset carrying values and accumulated amortisation in total and by each major class of finite lived intangible asset:

The annual review of impairment required under FAS 142 was carried out as at June 30, 2003 and the results indicated that no impairment was deemed to exist. Intangible asset carrying values and accumulated amortisation in total and by each major class of finite lived intangible asset;


			Accumulated		Weighted
	Gross carrying		amortisation as		average
	value as at March		at March 31,		amortisation
	31, 2004		2004		period

	£’m		£’m		Years
Amortised intangible assets
Core and patented technology		48		22		10
Trade names		7		1		20
Customer relationships		19		4		20
Non-compete agreements		22		20		5

Total amortised intangible assets		96		47
Goodwill		45		—

Total goodwill and other intangible assets under US GAAP		141		47

	Gross Carrying		Accumulated		Weighted average
	value as at		amortisation as at		amortisation
	September 30, 2003		September 30, 2003		period
	£m		£m		Years
Amortised intangible assets
Core and patented technology		54		21		10
Trade names		7		2		20
Customer relationships		20		4		20
Non-compete agreements		25		20		5
Total amortised intangible assets		106		47
Goodwill		45		—
Total goodwill and other intangible assets under US GAAP		151		47

The following table sets out amortisation expense for the three months ended March 31, 2004 and estimated aggregate amortisation expense for each of the five succeeding years:

Amortisation expense for the nine months ended September 30, 2003 and estimated aggregate amortisation expense for each of the five succeeding years;


	£’m
Aggregate amortisation expense:
For the three months ended March 31, 2004		3
Estimated aggregate amortisation expense:
For the year ended December 31, 2004		11
For the year ended December 31, 2005		7
For the year ended December 31, 2006		7
For the year ended December 31, 2007		7
For the year ended December 31, 2008		7

	£m
Aggregate amortisation expense:
For the nine months ended September 30, 2003		9
Estimated aggregate amortisation expense:
For the year ended December 31, 2003		12
For the year ended December 31, 2004		12
For the year ended December 31, 2005		7
For the year ended December 31, 2006		7
For the year ended December 31, 2007		7

		There were no changes to the carrying value of goodwill during the three months ended March 31, 2004.

		(ii) Derivative financial instruments

		During the three months ended March 31, 2004 we entered into contractual arrangements to hedge a portion of our raw material prices against spikes in natural gas prices. The contracts entered into are in the form of swaps, puts and calls, with settlement possible either way depending upon the floating price of natural gas. The fair value of the arrangement as at March 31, 2004 equates to an asset of £0.7m compared to the strike price of the puts/calls and the fixed price of the swaps; this gain made on the contracts would be taken to operating profit under US GAAP. At March 31, 2004 a volume of 4,800 mm-Btu was covered by the arrangement covering the period to October 2004.

There were no changes to the carrying value of goodwill during the nine months ended September 30, 2003.

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

New US Financial Accounting Standards and pronouncements not yet effective In January 2004, the FASB issued FASB Staff Position (“FSP”) 106-1, Accounting and Disclosure Requirements Related to Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”). This FSP addresses the accounting implications of the newly issued Act to an entity that sponsors a postretirement health care plan that provides prescription drug benefits. This Act, signed into law in December 2003 in the United States, introduces a prescription drug benefit under Medicare as well as a federal subsidy to sponsors of certain retiree health care benefit plans. The FSP includes an election to defer accounting for the implications of this new law until specific authoritative guidance to address the accounting treatment has been issued. As such, as a result of the absence of such guidance, any measures included in these financial statements of the accumulated post-retirement benefit obligation (APBO) or net periodic post-retirement benefit cost in the financial statements or accompanying notes do not reflect the effects of the Act on the plan. Authoritative guidance, when issued, could require a change in previously reported information. Recent UK accounting pronouncements In November 2000 the ASB issued Financial Reporting Standard No. 17, “Retirement Benefits” (“FRS 17”). FRS 17 requires pension scheme assets to be measured at market value and pension scheme liabilities to be measured using specified actuarial methods using a corporate bond rate. The resulting surplus or deficit should be immediately recognised in the balance sheet. In the annual financial statements additional analysis was provided in accordance with FRS 17 for which disclosure requirements have been implemented progressively during the previous and current financial years in accordance with the provisions of that standard. Full implementation of the standard has been postponed until 2005. International Financial Reporting Standards (“IFRS”) The European Parliament and Council of the European Union issued a regulation in 2002 that will require all EU listed companies to prepare their consolidated financial statements in accordance with IFRS rather than the existing national GAAP. The regulation takes effect for the accounting periods beginning after January 1, 2005 and consequently the accounting framework under which the Company reports will change. The Company will produce its consolidated financial statements in accordance with IFRS for the year ended December 31, 2005. We are currently evaluating the areas that will be most affected by the adoption of IFRS, including assessing the impact on our underlying systems and financial statements and our US GAAP reconciliations.

In May 2003, the FASB issued SFAS No. 150, Accounting For Certain Financial Instruments with Characteristics of both Liabilities and Equity. The Statement improves the accounting for certain financial instruments that, under previous guidance, issuers could account for as equity and requires that these instruments be classified as liabilities in statements of financial position. This Statement is effective prospectively for financial instruments entered into or modified after May 31, 2003 and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. This statement shall be implemented by reporting the cumulative effect of a change in an accounting principle for financial instruments created before the issuance date of the Statement and still existing at the beginning of the interim period of adoption. The adoption of this Statement does not have a material effect on the results of operations or financial position.

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Cautionary statement concerning forward-looking statements The Company is including the following cautionary statement in this Form 6-K to make applicable and take advantage of the safe harbour provisions of Section 21E of the Securities Exchange Act of 1934, as amended, for any forward-looking statements made by, or on behalf of, the Company. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements which are other than statements of historical facts. From time to time, the Company may publish or otherwise make available forward-looking statements of this nature. All such subsequent forward-looking statements, whether written or oral and whether made by or on behalf of the Company, are also expressly qualified by these cautionary statements. Certain statements contained herein are forward-looking statements and accordingly involve risk and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The forward-looking statements contained herein are based on various assumptions, many of which are based, in turn, upon further assumptions. The Company’s expectations, beliefs and projections are expressed in good faith and are believed by the Company to have a reasonable basis, including, without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. There can, however, be no assurance that management’s expectations, beliefs or projections will result or be achieved or accomplished. Critical accounting policies and use of accounting estimates The financial statements have been prepared in accordance with generally accepted accounting principles applicable in the United Kingdom but require some degree of judgement regarding the estimates and assumptions used to apply them. The application of these assumptions and judgements affects the reported amounts of profit during the year and the assets and liabilities at the balance sheet date. Actual results may differ from the estimates calculated using these assumptions and judgements. Management believes that accounting policies are critical policies where the assumptions and judgements would have a significant impact on the consolidated financial statements. These critical accounting policies are discussed in the annual financial statements as reported on Form 20-F and there have been no changes to them in the three months ended March 31, 2004. General Unless the context requires otherwise, the information provided in this Form 6-K and the terms “Lucite International”, “we”, “our” and the “Company” refer to Lucite International Group Holdings Limited and its subsidiaries and predecessor businesses as a combined entity. Lucite International Finance plc is a wholly-owned subsidiary of Lucite International Group Holdings Limited and was formed for the purpose of issuing and selling securities and making the proceeds of those issues available to the Company. The business is defined into two distinct segments, the upstream business and the downstream business. The principle products of our upstream business are methyl methacrylates, or MMA, and speciality methacrylates, or SpMAs. We also produce a limited range of high-value SpMAs, which impart specific high performance properties to their end products, such as gloss and adhesion. We also sell liquid sodium cyanide mainly in the United Kingdom, which is used to produce detergents and as an ingredient in pharmaceuticals and agrochemicals. Our downstream business uses the MMA we manufacture to produce and sell methacrylate-based polymers, resins, sheet and composites in thousands of variations.

The Company is including the following cautionary statement in this Form 6-K to make applicable and take advantage of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, for any forward-looking statements made by, or on behalf of, the Company. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements which are other than statements of historical facts. From time to time, the Company may publish or otherwise make available forward-looking statements of this nature. All such subsequent forward-looking statements, whether written or oral and whether made by or on behalf of the Company, are also expressly qualified by these cautionary statements. Certain statements contained herein are forward-looking statements and accordingly involve risk and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The forward-looking statements contained herein are based on various assumptions, many of which are based, in turn, upon further assumptions. The Company’s expectations, beliefs and projections are expressed in good faith and are believed by the Company to have a reasonable basis, including without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. There can though be no assurance that management’s expectations, beliefs or projections will result or be achieved or accomplished.

Critical accounting policies and use of accounting estimates

The financial statements have been prepared in accordance with generally accepted accounting principles applicable in the United Kingdom but require some degree of judgement regarding the estimates and assumptions used to apply them. The application of these assumptions and judgements affects the reported amounts of profit during the year and the assets and liabilities at the balance sheet date. Actual results may differ from the estimates calculated using these assumptions and judgements. Management believes that accounting policies are critical policies where the assumptions and judgements would have a significant impact on the consolidated financial statements. These critical accounting policies are discussed in the annual financial statements as reported on Form 20-F and there have been no changes to them in the three and nine months ended September 30, 2003.

General

Unless the context requires otherwise, the information provided in this Form 6-K and the terms “Lucite International”, “we”, “our” and the “Company” refer to Lucite International Group Holdings Limited and its subsidiaries and predecessor businesses as a combined entity. Lucite International Finance plc is a wholly-owned subsidiary of Lucite International Group Holdings Limited and was formed for the purpose of issuing and selling securities and making the proceeds of those issues available to the Company.

The business is defined into two distinct segments, the upstream business and the downstream business. The principle products of our upstream business are methyl methacrylates, or MMA, and speciality methacrylates, or SpMAs. We also produce a limited range of high-value SpMAs, which impart specific high performance properties to their end products, such as gloss and adhesion. We also sell liquid sodium cyanide mainly in the United Kingdom, which is used to produce detergents and as an ingredient in pharmaceuticals and agrochemicals. Our downstream business uses the MMA we manufacture to produce and sell methacrylate-based polymers, resins, sheet and composites in thousands of variations.

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

OPERATING AND FINANCIAL REVIEW AND PROSPECTS (continued)

Results of Operations for the Three Months Ended ~~September 30~~March 31, ~~2003~~2004 Compared to the Three Months Ended ~~September 30~~March 31, ~~2002~~ 2003 Turnover

Turnover


	Three											Three
	months											months
	ended March											ended March
	31, 2003		Exchange			Volume/Mix			Price			31, 2004

	£’m		£’m			£’m			£’m			£’m
Total turnover		179		(15	)		—			6			170
Percentage increase/(decrease)				(8	%)		—			3	%		(5	%)
Upstream turnover (i)		132		(11	)		(2	)		6			125
Percentage increase/(decrease)				(8	%)		(2	%)		5	%		(5	%)
Downstream turnover (i)		69		(5	)		3			2			69
Percentage increase/(decrease)				(7	%)		4	%		3	%		-	%

~~Total~~(i) upstream and downstream turnover ~~increased~~includes ~~£28 million,~~intra-company orsales ~~19%~~Turnover for the three months ended March 31, ~~from~~2004 ~~£147 million~~was affected by the translation impact of the weaker dollar during the period. The average rate for the three months ended ~~September 30~~March 31, ~~2002~~2003 was $1.84 to £~~175 million~~1.00 compared to average rate for the three months ended ~~September 30~~ March 31, ~~2003~~2004 of $1.60 ~~This~~to ~~increase~~£1.00. ~~primarily~~Approximately ~~reflects~~half ~~improved~~of ~~volumes/mix effects~~our ~~(£9 million~~sales orare ~~6%)~~generated ~~with~~from ~~improving~~US ~~prices~~operations ~~(£23 million~~with oranother 16approximately 20%) ~~offset~~generated ~~by adverse~~within Asia where exchange ~~effects~~rates ~~(£(4)~~are ~~million~~strongly orlinked ~~(3)%)~~to the dollar. ~~Total~~Demand for methacrylate products remained strong during the three months ended March 31, 2004, led by strong consumer demand in Asia in particular. Upstream volumes ~~for~~during the three months ended ~~September 30~~March 31, 2004 were 3% lower than during the three months ended March 31, 2003 resulting in an adverse effect on turnover of 2% when combined with favourable mix effects. Downstream volumes were 5% higher during the three months ended March 31, 2004 compared to March 31, 2003 resulting in a favourable effect on turnover of 4% when combined with adverse mix effects. Raw material prices increased further to unprecedented levels during the three months ended ~~September 30~~March 31, ~~2002~~2004. ~~mainly~~The ~~due~~higher raw material prices are passed through to ~~stronger~~the MMA price subject to the contract lags of between three and six months. This has resulted in higher upstream ~~demand~~prices for the three months ended March 31, 2004 compared to the three months ended March 31, 2003. Downstream prices have also increased during the three months ended March 31, 2004 reflecting the higher feedstock prices. The ability to pass on these higher feedstock prices into downstream products is a function of the relative competitiveness of each downstream market and time.

Turnover from upstream operations increased £22 million, or 21%, from £104 million for the three months ended September 30, 2002 to £126 million for the three months ended September 30, 2003. This increase reflects improving monomer prices (£20 million or 19%) combined with higher sales volumes/mix (£5 million or 5%) net of an adverse exchange impact of £(3) million or (3)% in the three months ended September 30, 2003. This turnover includes £22 million of sales (£23 million for the same period in 2002) to our downstream operations that have not been included in our total turnover due to inter-class eliminations.

Turnover from downstream operations increased £5 million, or 8%, from £66 million for the three months ended September 30, 2002 to £71 million for the three months ended September 30, 2003. Improved prices across all downstream businesses have caused a £1 million or 2% increase in turnover compared to the three months ended September 30, 2002. Downstream volumes for the three months ended September 30, 2003 have increased by 1% compared to the three months ended September 30, 2002, with mix effects this has resulted in a increase of £5 million or 8% to the downstream turnover for the three months ended September 30, 2003 compared to September 30, 2002. Exchange movements have had an adverse impact of approximately £(1) million or (2)% on downstream turnover for the three months ended September 30, 2003.

Cost of Sales

Cost of sales was £132 million for the three months ended September 30, 2003 which is an increase of £17 million, or 15%, compared to the three months ended September 30, 2002. The increase arises due to 5% higher volumes sold combined with higher average raw material prices during the three months ended September 30, 2003 compared to the same period last year.

Net Operating Expenses

Net operating expenses decreased £2 million or 8% from £25 million for the three months ended September 30, 2002 to £23 million the three months ended September 30, 2003 due to lower administration and research and development costs.

Distribution costs were £10 million for the three months ended September 30, 2003 comparable to the previous year.

Administration costs decreased £1 million or 10% from £10 million for the three months ended September 30, 2002 to £9 million for the three months ended September 30, 2003.

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

OPERATING AND FINANCIAL REVIEW AND PROSPECTS (continued)

Results of Operations for the Three Months Ended ~~September 30~~March 31, ~~2003~~2004 Compared to the Three Months Ended ~~September 30~~March 31, ~~2002~~2003 (continued) Cost of Sales

Net Interest Payable and Similar Charges


									Raw
									material
									prices net
	Three								of			Three
	months								production			months
	ended March								cost			ended March
	31, 2003		Exchange			Volume/Mix			savings			31, 2004

	£’m		£’m			£’m			£’m			£’m
Total cost of sales		140		(12	)		(1	)		5			132
Percentage increase/(decrease)				(9	%)		—			3	%		(6	%)
Upstream cost of sales		109		(9	)		(2	)		4			102
Percentage increase/(decrease)				(8	%)		(2	%)		4	%		(6	%)
Downstream cost of sales		54		(4	)		1			4			55
Percentage increase/(decrease)				(7	%)		2	%		7	%		2	%

~~Net~~Cost ~~interest~~of ~~payable~~sales ~~and~~for ~~similar~~the ~~charges~~three ~~increased~~months byended ~~£10 million~~March 31, ~~from~~2004 ~~£nil~~ was affected by the translation impact of the weaker dollar during the period. The average rate for the three months ended ~~September 30~~March 31, ~~2002~~2003 was $1.84 to £~~10 million~~1.00 compared to average rate for the three months ended ~~September 30~~March 31, ~~2003~~2004 of $1.60 ~~This~~to ~~increase~~£1.00. Approximately half of our production is ~~due~~generated ~~almost~~from ~~entirely~~US ~~to exchange~~operations ~~movements~~with onanother ~~the~~approximately ~~foreign~~20% ~~currency~~generated ~~loans~~within ~~that~~Asia ~~are~~where ~~not~~exchange ~~offset~~rates byare ~~the movement~~strongly inlinked ~~foreign~~to ~~currency~~the ~~net~~dollar. ~~assets~~Raw ~~(£3 million~~material ~~loss~~costs ~~for~~increased during the three months ended ~~September 30~~March 31, ~~2003~~2004, ~~compared~~leading to ~~£7 million~~a ~~gain~~large price variance within cost of sales for the upstream business. As MMA represents approximately 75% to 85% of the raw material cost for our downstream business the increased MMA prices during the three months ended ~~September 30~~ March 31, ~~2002).~~2004 ~~Although~~have increased the ~~LIBOR~~cost ~~rates~~of ~~have~~sales ~~reduced~~of ~~for~~the downstream business. A 3% reduction in upstream volume during the three months ended ~~September 30~~March 31, ~~2003~~2004 compared to the ~~same~~three ~~period~~months ~~last~~ended ~~year~~March 31, ~~there was~~2003 ~~additional~~has ~~interest~~resulted ~~payable~~in ~~regarding~~a favourable cost of sales variance of 2% when combined with the ~~deep~~adverse ~~discounted~~impact ~~bond~~of ~~facility~~the ~~put in~~mix ~~place~~of products produced. A 5% volume increase of downstream products during ~~December 2002~~the ~~and~~three ~~additional~~months ~~interest~~ended ~~arising~~March ~~from~~31, 2004 compared to the ~~new bonds~~three ~~issued~~months ended March 31, 2004 has resulted in ~~June 2003~~an adverse cost of sales variance of 2% when combined with the favourable impact of the mix of products produced.

Taxation on Loss on Ordinary Activities

The tax charge was £1 million for the three months ended September 30, 2003 compared to £1 million for the three months ended September 30, 2002.

Equity Minority Interests

Equity minority interests were £1 million for the three months ended September 30, 2003 compared to £nil for the three months ended September 30, 2002 due to a stronger performance from KMC which has a 40% minority interest.

Liquidity and Capital Resources

The cash generated from operating activities was an inflow of £37 million for the three months ended September 30, 2003 compared to an inflow of £25 million for the three months ended September 30, 2002. Working capital balances resulted in an inflow of £7 million for the three months ended September 30, 2003 compared to an inflow of £7 million for the same period last year. A stronger operating result for the three months ended September 30, 2003 resulted in an additional £13 million inflow compared to the same period last year. Provision payments of £1million were made during the three months ended September 30, 2003 compared to £nil for the previous year.

Interest payments of £3 million were made in the three months ended September 30, 2003 (£3 million in the three months ended September 30, 2002) in line with loan agreements pertaining to the financial structure of the group. This consisted of £3 million of senior debt interest (£2 million for the three months ended September 30, 2002) plus interest on the revolving credit facility, sundry lease and other interest payments.

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

OPERATING AND FINANCIAL REVIEW AND PROSPECTS (continued)

Results of Operations for the Three Months Ended ~~September 30~~March 31, ~~2003~~2004 Compared to the Three Months Ended ~~September 30~~March 31, ~~2002~~2003 (continued) Net Operating Expenses

Capital Expenditures


	Three								Three
	months								months
	ended March					Cost			ended March
	31, 2003		Exchange			savings/other			31, 2004

	£’m		£’m			£’m			£’m
Total operating expenses		25		(1	)		—			24
Percentage increase/(decrease)				(4	%)		—			(4	%)
Upstream operating expenses		15		—			(1	)		14
Percentage increase/(decrease)				—			(7	%)		(7	%)
Downstream operating expenses		9		—			—			9
Percentage increase/(decrease)				—			—			—

InNet operating expenses were favourably affected by the translation impact of the weaker dollar during the three months ended ~~September 30~~March 31, ~~2003~~2004. weNet ~~made~~Interest ~~capital~~Payable ~~expenditures~~and ofSimilar ~~£6 million as follows:~~ Charges

	£ million
	£’m
Safety, health and environmental		1
Interest charged for the three months ended March 31, 2003		16
Maintaining asset capacity		3
Exchange movement		(18	)
Growth projects		2
Interest charged for the three months ended March 31, 2004		(2	)
Total capital expenditure		6

~~Financing~~ There was a favourable exchange movement of £9 million relating to external debt not hedged by foreign currency assets for the three months ended March 31, 2004 compared to a £9 million adverse movement for the three months ended March 31, 2003. Taxation on Loss on Ordinary Activities The tax charge was £3 million for the three months ended March 31, 2004 compared to £1 million for the three months ended March 31, 2003. Equity Minority Interests Equity minority interests were £1 million for the three months ended March 31, 2004 compared to £1 million for the three months ended March 31, 2003.

During June 2003 the company undertook a refinancing in order to fund future investment into China by issuing 50 million Euro of 10.25% senior notes at a premium of 2 million Euro. The proceeds were used to make a voluntary repayment of senior debt of £21 million (30 million Euro) and the balance (22 million Euro) to repay £15 million against the revolving credit facility until required for investment in China and pay £1 million of transaction fees.

There was a £7 million repayment on the revolving credit facility during the three months ended September 30, 2003 as a result of strong cash generation during the period.

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

OPERATING AND FINANCIAL REVIEW AND PROSPECTS (continued)

Results of Operations for the ~~Nine~~Three Months Ended ~~September 30~~March 31, ~~2003~~2004 Compared to the ~~Nine~~Three Months Ended ~~September 30~~March 31, ~~2002~~ 2003 (continued) Liquidity and Capital Resources The cash generated from operating activities was an inflow of £19 million for the three months ended March 31, 2004 compared to an inflow of £13 million for the three months ended March 31, 2003. This £6 million improvement in operating cash arose from a lower working capital outflow during the three months ended March 31, 2004 compared to the three months ended March 31, 2003. Working capital balances resulted in an outflow of £6 million for the three months ended March 31, 2004 compared to an outflow of £12 million for the same period last year. Management believes that the working capital position as at March 31, 2004 is adequate to fund operations. Interest payments of £3 million were made in the three months ended March 31, 2004 (£4 million in the three months ended March 31, 2003) in line with loan agreements pertaining to the financial structure of the group. This consisted of £3 million of senior debt interest, including the revolving debt facility (£4 million for the three months ended March 31, 2003). Capital Expenditures In the three months ended March 31, 2004 we made capital expenditures of £7 million as follows:

Turnover


	£’m
Safety, health and environmental		1
Maintaining asset capacity		2
Growth projects		4

Total capital expenditure		7

Total turnover increased £91 million, or 21%, from £437 million for the nine months ended September 30, 2002 to £528 million for the nine months ended September 30, 2003. This increase primarily reflects improved volumes/mix effects (£45 million or 10%) with improving prices (£76 million or 17%) offset by adverse exchange effects of £(30) million or (6)%. Total volumes for the nine months ended September 30, 2003 were 11% higher compared to the nine months ended September 30, 2002, reflecting recovering markets in all regions and in particular stronger upstream demand led by MMA.

Turnover from upstream operations increased £87 million, or 29%, from £298 million for the nine months ended September 30, 2002 to £385 million for the nine months ended September 30, 2003. This increase reflects improving monomer prices (£75 million or 25%) combined with higher sales volumes and mix effects (£34 million or 11%) net of an adverse exchange impact of £(22) million or (7)% in the nine months ended September 30, 2003. This turnover includes £67 million of sales, compared to £66 million for the same period in 2002, to our downstream operations that have not been included in our total turnover due to inter-class eliminations.

Turnover from downstream operations increased by £5 million or 2% from £205 million for the nine months ended September 30, 2002 to £210 million for the nine months ended September 30, 2003. Improved prices across all downstream businesses have caused a £8 million or 4% increase compared to the nine months ended September 30, 2002. Downstream volumes/mix for the nine months ended September 30, 2003 resulted in an increase of £5 million or 2%. Exchange movements have had an adverse impact of approximately £(8) million or (4)% on downstream turnover for the nine months ended September 30, 2003.

Cost of Sales

Cost of sales was £407 million for the nine months ended September 30, 2003, which is an increase of £65 million, or 19%, compared to the nine months ended September 30, 2002. The increase arises due to 11% higher volumes sold combined with higher average raw material prices during the nine months ended September 30, 2003 compared to the same period last year and are at very high absolute levels. The higher raw material prices have resulted in approximately £52 million of additional costs compared to the same period last year. The balance of the increase is due to the increased volumes sold in the nine months ended September 30, 2003 compared to the same period last year offset by lower purchase for resale costs and improved plant efficiencies.

Net Operating Expenses

Net operating expenses reduced £5 million or 7% from £75 million for the nine months ended September 30, 2003 to £70 million for the nine months ended September 30, 2002. This was due to lower research and development costs combined with lower distribution costs. The lower distribution costs arise despite higher volumes sold in the nine months ended September 30, 2003 compared to September 30, 2002. This is due to the mix of products sold.

Administration costs remained at a similar level in the nine months ended September 30, 2002 compared to those in the nine months ended September 30, 2003.

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

OPERATING AND FINANCIAL REVIEW AND PROSPECTS (continued)

Results of Operations for the ~~Nine~~Three Months Ended ~~September 30~~March 31, ~~2003~~2004 Compared to the ~~Nine~~Three Months Ended ~~September 30~~March 31, ~~2002~~2003 (continued) Financing There was a £15 million repayment on the revolving credit facility during the three months ended March 31, 2004 as a result of strong cash generation during the period. The effects of the cash movement on the debt financing of the company are put into context in the following table:

Net Interest Payable and Similar Charges


	December 31,												March 31,
	2003			Cash			Exchange			Other			2004
	£’m			£’m			£’m			£’m			£’m
Term loan A		37			—			(2	)		—			35
Term loan B		69			—			(2	)		—			67
Term loan C		45			—			(2	)		—			43

Total senior debt		151			—			(6	)		—			145
Revolving credit facility		19			(15	)		—			—			4
Senior notes		176			—			(9	)		—			167
Finance lease and other short term borrowing		4			—			—			—			4
Unamortised senior notes premium		2			—			—			(1	)		1
Unamortised issue costs		(8	)		—			—			1			(7	)

Total debt excluding China bank loans		344			(15	)		(15	)		—			314
China bank loans		—			4			—			—			4

Total debt		344			(11	)		(15	)		—			318

Net interest payable and similar charges increased by £15 million or 75%, from £20 million for the nine months ended September 30, 2002 to £35 million for the nine months ended September 30, 2003. This increase is due almost entirely to exchange movements on the foreign currency loans that are not offset by the movement in foreign currency net assets (£14 million loss for the nine months ended September 30, 2003 compared to £nil for the nine months ended September 30, 2002). Although the LIBOR rates have reduced for the nine months ended September 30, 2003 compared to the same period last year, there was continuing additional interest payable regarding the deep discounted bond facility put in place during December 2002 and additional interest arising from the new bonds issued in June 2003.

Taxation on Loss on Ordinary Activities

The tax charge was £3 million for the nine months ended September 30, 2003 compared to £1 million for the nine months ended September 30, 2002. This increase arises mainly due to better operating results in Asia where there are no unutilised losses to offset the liability.

Equity Minority Interests

Equity minority interests were £3 million for the nine months ended September 30, 2003 compared to £1 million for the nine months ended September 30, 2002 due to a stronger performance from KMC which has a 40% minority interest.

Liquidity and Capital Resources

The cash generated from operating activities was an inflow of £67 million for the nine months ended September 30, 2003 compared to an inflow of £40 million for the nine months ended September 30, 2002 an increase of £27 million (or 67%). Working capital balances resulted in an outflow of £15 million for the nine months ended September 30, 2003 compared to an outflow of £14 million for the same period last year. A stronger operating result for the nine months ended September 30, 2003 resulted in an additional inflow of £29 million compared to the same period last year.

Interest payments of £15 million were made in the nine months ended September 30, 2003 (£15 million in the nine months ended September 30, 2002) in line with loan agreements pertaining to the financial structure of the group. This consisted of £7 million of senior debt interest (£7.5 million for the nine months ended September 30, 2002), £7 million of Senior Notes interest (£6 million for the nine months ended September 30, 2002), £1 million interest on the revolving credit facility (£1 million for the nine months ended September 30, 2002) plus sundry lease and other interest payments. The lower senior debt interest payment arises from lower Libor rates, the higher Senior Notes interest arises purely from exchange factors relating to a stronger Euro as the first interest payment on the new issue Euro 50 million bond is not due to be paid until November.

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

~~OPERATING~~Key ~~AND~~financial ~~FINANCIAL~~data ~~REVIEW~~excluding ~~AND~~the ~~PROSPECTS~~costs of building the new MMA facility in China During the latter part of 2003 Lucite International (~~continued~~China) Chemical Industry Company Limited was formed as a wholly owned foreign entity for the purpose of constructing and operating an MMA facility within China (the China project). The results of Lucite International (China) Chemical Industry Company Limited have been fully consolidated into the results of Lucite International Group Holdings Limited for the three months ended March 31, 2004. In order to compare data on an historical basis the following is a summary of key items excluding the costs of the China project: Three months ended March 31, 2004

Results of Operations for the Nine Months Ended September 30, 2003 Compared to the Nine Months Ended September 30, 2002 (continued)


	Including new			New China			Excluding new
	facility in China			facility			facility in China
	£’m			£’m			£’m
Revenue		170			—			170
Operating profit		14			—			14
Fixed Assets		400			9			391
Cash		27			2			25
Total Debt		(318	)		(4	)		(314	)
Capital expenditure (cash flow)		(7	)		(4	)		(3	)

~~Capital~~As ~~Expenditures~~ debt is incurred in Lucite International (China) Chemical Company Limited it is ring-fenced from the remainder of the group and secured solely on the assets of Lucite International (China) Chemical Company Limited. During the three months ended March 31, 2004 £4 million of debt has been incurred with a leading Chinese bank in order to fund the ongoing construction costs of our new MMA facility in China. There has been no further equity injection by Lucite International Group Holdings Limited during the three months ended March 31, 2004.

In the nine months ended September 30, 2003 we made capital expenditures of £15 million as follows:

	£ million
Safety, health and environmental		2
Maintaining asset capacity		5
Growth projects		8
Total capital expenditure		15

Financing

During June 2003 the company undertook a re-financing in order to fund future investment into China by issuing 50 million Euro of 10.25% senior notes at a premium of 2 million Euro. The proceeds were used to make a voluntary repayment of senior debt of £21million (30 million Euro) and the balance (22 million Euro) to repay £15 million against the revolving credit facility until required for future investment in China and to pay £1 million of transaction fees.

There was a £3 million repayment on the revolving credit facility during the nine months ended September 30, 2003 as a result of normal operations. The June senior A repayment of £8 million was made as scheduled. In addition a borrowing of approximately £1 million that was taken out locally in Japan earlier in 2003 has now been fully repaid.

The effects of the cash movement on the debt financing of the company are put into context in the following table:

	December 31,												September 30,
	2002			Cash			Exchange			Other			2003
	£’m			£’m			£’m			£’m			£’m
Term loan A		69			(29	)		4			—			44
Term loan B		69			—			2			—			71
Term loan C		50			—			(2	)		—			48
Total Senior debt		188			(29	)		4			—			163
Revolving Credit Facility		32			(18	)		—			—			14
Senior notes		130			—			10			—			140
Senior notes new issue		—			37			—						37
Finance lease and other short term borrowing		5			(1	)		—			—			4
Unamortised issue costs		(7	)		(1	)					(1	)		(9	)
Total Debt		348			(12	)		14			(1	)		349

LUCITE INTERNATIONAL GROUP HOLDINGS LIMITED

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorised.

Lucite International Group Holdings Limited
Registrant Guarantor

//SIGNED// ANNIE VEERMAN

By: Annie Veerman
Director

Dated ~~November 19~~May 26, ~~2003~~ 2004

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Filing Compare · LUCITE INTERNATIONAL GROUP HOLDINGS LTD