Interim Management Statement

RNS Number : 0143S

Morgan Crucible Co PLC

14 November 2011

 



Press Release

Interim Management Statement 

The Morgan Crucible Company plc

14^th November 2011

The Morgan Crucible Company plc, the Advanced Materials Group, today issues its 'Interim Management Statement' covering trading for the period 4^th July to 14^th November 2011.

·    The Group has continued to trade well since the half year results despite the increased uncertainty in the macro-economic environment.  Of particular note in this positive trading has been the continuing progress on the Group's strategic growth initiatives in emerging markets and in new products and technologies

·    As a result, performance remains firmly in line with the Board's previous expectations

·    The Group is on track to make substantial progress in 2011 towards all three of its stated 2013 financial targets with significant improvements in profit before tax, underlying operating profit margin and Operating Return on Capital Employed

·    Good ongoing cash generation since the half year, combined with the continued focus on improving capital efficiency, means that the net debt to EBITDA ratio at this year-end is forecast to improve to below 1.3 times compared to 1.7 times at the end of 2010.

Ceramics Division

The Ceramics Division consists of the Technical Ceramics and Thermal Ceramics businesses.

The Technical Ceramics business has continued to trade well in the period since the  half year. The positive market conditions seen in the first half of 2011 across all geographies have generally continued, with aerospace and general industrial equipment markets in particular being robust. As the production ramp for next generation Hard Disk Drive (HDD) products continues we have made further investments to expand our capacity. Whilst the flooding in Thailand has caused minor interruptions, the overall HDD program remains in line with our expectations.

Our Thermal Ceramics business has also continued to trade well since the half year with particularly encouraging performance from the North American region. The transition to Superwool, most particularly in Europe, combined with a general positive mix shift and merger benefits from combining the two businesses last year, have also supported this improving performance.

Work on reducing our cost base from the merger of the Thermal and Technical businesses continues and we remain well on track to deliver the £5 million benefits forecast for 2011.

The Division's philosophy of targeting markets with strong secular growth and less general economic cyclicality, and of focusing on differentiated and demanding technical solutions, means that we are still seeing good orders and momentum.

Engineered Materials Division

The Engineered Materials Division consists of the Advanced Materials and Technology business (AM&T), the NP Aerospace business and the Molten Metal Systems business (MMS).

The Division's overall performance has continued in line with expectations despite some challenges from the macroeconomic environment, particularly in Europe. Ambitious growth initiatives combined with efficiency drives and migration to low cost manufacturing are continuing to deliver positive results.

AM&T has continued with strong revenue through October, at levels comfortably above those for the equivalent period in 2010. First half US body armour business was not repeated to the same degree in the second half but this has been offset by continued strong growth of our high temperature product line in the second half of the year. China revenue continues to outpace the wider market driven by continued share growth in our electrical business and market penetration in high temperature products. We have also experienced good growth in our seal & bearing business through the course of the year across all regions, while electrical revenues continue to reflect solid growth over 2010.

NP Aerospace trading has been marginally ahead of expectations which gives us confidence in achieving a modest increase in our previous forecast of c£90 million revenue. The joint venture established to deliver integrated vehicle systems to the UK MoD Mastiff fleet, has received a contract for a further tranche of vehicles for delivery in the second and third quarters of next year worth £15 million to NP Aerospace.

The MMS business has seen a continued pattern of revenue growth through the first ten months of the year as we continue to enjoy success in the emerging markets from aggressive growth strategies that are yielding solid share gains.

Financial position

Good  cash generation since the half year combined with the continued focus on improving capital efficiency means that the net debt to EBITDA ratio at this year-end is forecast to improve to below 1.3 times compared to 1.7 times at the end of 2010.

There were no other material changes in the financial position of the Group during the period.

Outlook

Given the uncertainty in the global macro-economic outlook in recent months, the Board is mindful that trading conditions may become more challenging going forward. Nevertheless, we believe that a combination of strategic growth initiatives in the emerging markets, successful on-going roll-out of new products and technologies and continued benefits from actions on the operational cost base leave the Group well placed to continue to make further progress.

For further enquiries:

Mark Robertshaw	Morgan Crucible	01753 837000
Kevin Dangerfield	Morgan Crucible	01753 837000
Mike Smith/Nina Coad	Brunswick	0207 404 5959

 

END

 

 

IMSGLBDBBBBBGBS