Trading Statement

Morgan Crucible Co PLC
08 July 2005

The Morgan Crucible Company plc, ('Morgan') the specialist materials company, is
issuing this trading update ahead of its half year results for the period ended
4th July 2005, scheduled for 2nd August 2005.


Trading Highlights


   •    Morgan has continued to make good progress during the first half of 2005
        and expects to announce operating profit results that are in line with the
        consensus of analysts' expectations.


   •    The European market environment has weakened further in the first half of
        2005. This has particularly impacted the Magnetics and Crucibles businesses
        given their higher proportion of European sales. Nevertheless, the Group has
        been able to offset this with demand remaining robust in our North American
        and Asian markets combined with the ongoing success of our profit
        improvement programme.


   •    Like-for-like sales have continued to grow comfortably ahead of GDP with
        turnover from continuing business being circa 5% higher in the first six
        months on a constant currency basis than the equivalent period last year.


   •    Restructuring charges for the six-month period, as part of the profit
        improvement programme, are in the region of £11m with a cash spend of circa
        £12m.


   •    Net debt, which is predominantly dollar denominated to provide a natural
        hedge, is expected to be broadly in line with the equivalent period last
        year on a constant currency basis.


Commenting on the results, Chief Executive Officer, Warren Knowlton said:

'Morgan is continuing to deliver on its profit improvement plan while at the
same time posting top-line growth well in advance of GDP. Morgan is benefiting
from the overall strength of its diversified global portfolio which has helped
to insulate it from the worst effects of a weakening European market witnessed
in the first half of this year. It is pleasing that we continue to offset the
negative impacts of raw material and energy price inflation. Overall, we are
making good progress towards the goal of double-digit operating profit margins
by the end of 2006.'

For further information please contact:

The Morgan Crucible Company plc
Victoria Gould, Director of Group Communications 01753 837 000

Finsbury Group
Charlotte Hepburne-Scott / Robin Walker          020 7251 3801


Divisional Trading Comment

Carbon
The Carbon division has performed well in the first half of the year compared to
the equivalent period in 2004. Performance has been strong in the traditional
brush and seals and bearings markets. First half sales in the armour and
semiconductor markets have also been good although the outlook for the second
half in these markets is more difficult to predict. The business continues to
benefit from good market conditions in the Americas. Trading conditions have
been difficult in Europe, although some sales growth has been generated. The
Asian business, particularly in China, has taken advantage of the organic growth
in the region and our ongoing investment. The division is benefiting from the
recent restructuring plans, including the rationalisation of a number of smaller
sites, continuing overhead reduction and an ongoing move to low cost
manufacturing countries.

Magnetics
The Magnetics division has seen continued revenue growth compared to the same
period in 2004, however, the European market environment has weakened in the
first half of 2005 making trading conditions more challenging. In particular,
the permanent magnets business has traded below expectations due to the weak
demand for semiconductor applications and customers' loss of their business to
Asian competitors. Our joint venture with San Huan, the largest rare earth
magnets producer in China, began trading in May which is expected to help the
permanent magnets business going forward. The materials and parts business has
performed well driven by strong demand in the electronic article surveillance
application. The cores and components business has also performed well through
good growth in the installation and telecommunication markets compared to 2004
and with a strong order book for the second half of the year. Raw material price
increases in nickel and cobalt in the latter half of 2004 will negatively impact
first half results; however margins are expected to improve in the second half
as ongoing cost reductions and falling cobalt prices benefit the bottom line.

Thermal Ceramics
The Thermal Ceramics division has performed well in the first half of the year
compared to the equivalent period in 2004. The business has continued to expand
its geographic presence with the formation of a 70% Joint Venture with Hubei
Kailong in China. This, along with expansion and modernisation of facilities in
China, India, Australia and Korea, has enabled the division's growth momentum in
Asia to continue in double digits. As a result, the business is well advanced in
its goal of balancing its turnover between the trading blocks of Europe,
Americas and Asia. In addition the launch of a new high temperature bio-soluble
fibre (Superwool 607HT) is enabling Thermal to be at the forefront of developing
new products adapted to the needs of current legislative and environmental
demands of the European and American markets.


Crucibles

Overall trading conditions worsened for Crucibles in the first half of 2005,
against a background of generally poorer economic forecasts and falling demand
in Europe. This was exacerbated by rapid rises in raw material prices and fuel
and energy costs, which put pressure on margins and dented confidence in the
prospects for recovery of the foundry sector and its supply chain. This extended
also to North America, where capital equipment sales faltered and some
destocking by distributors was evident. Asia and South America appeared immune
to this trend and here good progress continues to be made.


Technical Ceramics
The Technical Ceramics division is continuing its positive 2004 momentum of
improving top and bottom line performance. Of particular note was the strong
growth in the USA in sales for the new generation of computer hard disk drives.
This was complemented by significant sales growth into the medical market, as
well as continued demand for laser and power tube products. The move to lower
cost manufacturing areas took a further step with the purchase of the minority
shareholding in our joint venture in Yixing, China coupled with the continued
transfer of selected additional manufacturing operations from Europe to this
region. Operating profit improvements from the cost reduction plans are
continuing to come through, including the successful relocation of a major UK
manufacturing site, and the rationalisation of a US distribution site.






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