Trading Statement

Morgan Crucible Co PLC
21 January 2004

                                                                 21 January 2004

                         Morgan Crucible Trading Statement

Overview

Trading since our interim results announcement in September has been in line
with the Board's expectations. Operating profit before goodwill amortisation and
operating exceptionals charges for 2003 is expected to be in excess of £40m.

Our markets, taken overall, have stabilised. Demand in Europe has been steady,
America has been weak, and in Asia, the smallest of our three geographical
markets, demand has grown strongly.

The Thermal business has performed better than anticipated. However, the Auto
and Consumer business has suffered from weak demand this year in its principal
North American market and the Technical Ceramics business has continued to
experience weakness in the Aerospace and Semiconductor markets. As anticipated,
and as discussed at the interim results presentation, deflationary pricing
pressure is a continuing feature of certain of our businesses.

Restructuring

The restructuring programme announced in February 2002 is on track and nearing
completion. We have pressed forward with the initial restructuring projects
identified by our strategic review in 2003, which we outlined at the interim
results. Some of the benefits arising from actions initiated in the second half
were achieved in 2003 but the majority will be realised in 2004. Further
specific actions are planned for 2004.

The Group disposed of a number of non-core activities in 2003 and will continue
to dispose of any businesses that fail to meet the required performance
criteria.

Exceptional Charges

Operating exceptional charges for 2003 are expected to be c.£68m. Of this,
c.£19m relates to non cash asset write-offs, c.£41m to cash spent in 2003 and
c.£8m to provisions made for 2004 expenditure.

As a result of business disposals and surplus property sales, non-operating
corporate exceptional charges for 2003 are expected to be c.£30m, which include
goodwill written-off of c.£24m.

Net Debt and Cash Flow

Net debt at the year end is expected to be c.£249m compared to £252m at the end
of last year. Cash spent on restructuring in 2003 of c.£37m and the £28m
redemption of preference shares in July more than offset the net proceeds from
disposals during the year. The working capital outflow that occurred in the
first six months of the year was reversed, as expected, in the second half.

Outlook

Although our markets stabilised in 2003, the timing of a recovery remains
uncertain. We are not relying on a market upturn to improve Morgan's
performance: instead, we are focusing and simplifying our businesses, optimising
our product mix and reducing costs in real terms in order to drive profitability
and cash flow generation in 2004 and beyond.

Enquiries
Charlotte Hepburne-Scott / Robin Walker, Finsbury            020 7251 3801


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