Interim Management Statement

RNS Number : 2473G

Morgan Crucible Co PLC

10 May 2011

 



Press Release

Interim Management Statement 

The Morgan Crucible Company plc

10^th May 2011

The Morgan Crucible Company plc ('Morgan Crucible'), the advanced materials company, is today holding its annual general meeting and issuing its 'Interim Management Statement' regarding trading for the first four months of 2011 and outlook for the full year 2011.

·    The Group has performed better than previously expected in the first four months of the year with good trading momentum across its end markets and geographies

·    In the four month period to April revenue increased by c.10%, at reported rates, against the comparable period last year, although year on year comparisons will become increasingly challenging as 2011 progresses

·    Net restructuring and one-off costs are now expected to be less than £5 million in 2011, the majority of which will be incurred in the first half of the year

·    Underlying operating profit margins (EBITA post restructuring and one-off costs) continued to improve, driven by positive trading and ongoing operational initiatives

·    In April, the Group refinanced its bank facilities with a new 5 year, £150 million revolving credit facility

Outlook

The good trading momentum, which was broadly based across end markets and geographies, together with improving performance in the first four months of the year give the Group confidence in being modestly ahead of expectations at the half year. The outlook for the full year also remains positive based on the performance to date.

Ceramics Division

The Ceramics Division consists of the Technical Ceramics and Thermal Ceramics businesses that were merged in the second half of 2010.

The Technical Ceramics business has made a good start to 2011. The improved market conditions in the second half of 2010 across all geographies have continued through the first four months of this year. The aerospace and general industrial markets have been particularly robust. The investments made in 2010 for next generation HDD products are operational and supporting the production ramp which continues in line with our expectations.

As anticipated, our later cycle Thermal Ceramics business has continued to see a recovery in its markets which we saw coming through at the end of 2010 and the recovery of these markets and geographies remains in line with our expectations.

Work on reducing our cost base from the merger of the Thermal and Technical businesses continues. We are on track to deliver the anticipated £5 million benefits we planned for 2011.

The order intake has been encouragingly positive across the Division.

Engineered Materials

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

The first four months of 2011 has seen good performance from AM&T (excluding NP Aerospace) with revenue well above 2010 levels and strong order book intake. The business in China continues to grow at a rapid pace and is on track for another year of very good growth. Demand in America continues to improve across most sectors and trading conditions in Europe are beginning to show signs of further improvement. The electrical and seal & bearing businesses continue to trade well, maintaining the momentum from 2010 and nearing pre-recession levels. Clean energy initiatives are continuing to generate results. Our high temperature order book and revenues have grown robustly from the start of the year and are anticipated to continue growing throughout the remainder of the year. The lithium ion acquisition, Hairong (China), has begun the year as anticipated, while wind revenue continues to increase with further business wins across the world.

As expected, NP Aerospace is trading below 2010 levels.  Our robust order intake in both vehicle and personal protection provides good visibility and confidence that full year revenue will be in line with previous guidance at c.£90 million. We remain focused on expanding our market presence beyond the UK and our efforts have recently resulted in a first prototype order from a major US vehicle OEM.

MMS revenue to April was well ahead of the comparable period last year with order intake also healthy. We continue to deliver strong growth from India and China where our low cost manufacturing bases are also facilitating operational efficiency improvements.

Financial position

There have been no material changes to the financial position of the Group in the first four months of 2011. The refinancing of the bank revolver was successfully completed in April with a £150 million facility at improved pricing terms, with all eight relationship banks who had participated in the previous facility.

The net restructuring and one off costs for 2011 are now expected to be less than £5 million. Costs of restructuring of c.£7 million are now expected to be offset by the sale of  excess land and buildings in the first half and anticipated further sales in the second half of the year.

For further enquiries:

Mark Robertshaw	Morgan Crucible	01753 837000
Kevin Dangerfield	Morgan Crucible	01753 837000
Rollo Head/Clare Hunt	Finsbury	020 7251 3801

This statement constitutes Morgan Crucible's Interim Management Statement for the period from 3rd January 2011 to 9th May 2011 as required by the UK Listing Authority's Disclosure and Transparency Rules.

 

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