Interim Management Statement

RNS Number : 6337S

Morgan Advanced Materials PLC

11 November 2013

 

Press Release

Interim Management Statement 

Morgan Advanced Materials plc

11^th November 2013

Morgan Advanced Materials plc, the advanced materials company, is today issuing the following "Interim Management Statement" regarding trading from 1^st July 2013 to 10^th November 2013.

Trading since the half year has been in line with management's expectations with revenue in the second half of the year similar to that in the first half on a constant currency basis while EBITA margins continue to improve as a consequence of our self-help initiatives. Order books have remained stable with a modestly positive book to bill ratio year to date and our outstanding order book at the end of October being 3% above the same time last year at constant currency. Since the half year Sterling has strengthened against most of the currencies in which the Group trade and if these present exchange rates remain through to year end the translational effect would reduce reported revenue and EBITA for the full year by 3-4%.

The new "One Morgan" organisation structure and restructuring actions are all proceeding to plan with the full £10 million of benefits the Group expected to achieve coming through this year. The costs of these actions are now estimated to be c£11 million for the full year.

One of the key strategies of the Group in recent years has been to reshape its portfolio, focussing on higher growth, higher margin markets. As part of the changes made to the Group during the course of this year a strategic review of the portfolio is on-going and has identified a range of exit and/or sale initiatives across a number of smaller product/technology and end market areas. The Group is looking to accelerate its portfolio reshaping through a combination of these initiatives as well as continued positive mix shift. As a result of this review, we expect to sell or exit c£20m of revenue over the coming months of loss-making or breakeven activities. The non-cash write offs of this are expected to be c£13m in 2013.

Across our three geographical regions, North America, Europe and Asia/Rest of World trading conditions have remained broadly similar to the first half of the year.  Book to bill ratios across all three regions have remained stable and similar to our half year position with the ratio at just over one times year to date. In North America, as elsewhere geographically, the business has not seen a pick-up in the large project/infrastructure build business despite a high level of enquiries. Reduced business in the Hard Disk Drives in the second half has been offset by improving performance elsewhere particularly in the carbon businesses as a result of the  rationalisation actions taken this year. In Asia/Rest of World the markets and geographies the Group serves, mainly in industrial sectors, have remained stable but showing little sign of positive industrial momentum with China and India yet to show signs of improvement. In Europe, trading conditions have similarly not changed since the first half with again the carbon businesses showing improving performance this year through the rationalisation actions undertaken and some recovery in its end markets.

Financial position

There were no significant events or transactions during the period which resulted in a material impact on the financial position of the Group.

For further enquiries:

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

This statement constitutes Morgan Advanced Materials plc's Interim Management Statement for the period from 1^st July 2013 to 10^th November 2013 as required by the UK Listing Authority's Disclosure and Transparency Rules.

The Group's next communication will be at our 'Capital Markets Day' presentation on the 21^st November.

 

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