Interim Management Statement

RNS Number : 6572K

Morgan Crucible Co PLC

23 April 2010

 



Press Release

Interim Management Statement 

The Morgan Crucible Company plc

23^rd April 2010

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 and financial performance for the first quarter of 2010 and outlook for the full year 2010.

This statement constitutes Morgan Crucible's Interim Management Statement for the period from 4^th January to 22^nd April 2010 as required by the UK Listing Authority's Disclosure and Transparency Rules.

·    The Group has had an encouraging start to 2010. Overall we have seen trading conditions improve with steadily increasing levels of order intake since the fourth quarter of 2009.

·    Demand in Asia is robust, improving in most end markets in North America and stable in Europe.

·    Operating profits and margins are above the comparable period for 2009 and in line with management expectations, benefiting from the positive impact of cost savings made in 2009.

·    We continue to manage our cost base carefully so that the business will benefit fully from any operational leverage as revenues continue to recover.

 Commenting on the year to date performance and outlook, Mark Robertshaw, Chief Executive Officer, said:

"Whilst recognising that it is still early in the year, I am encouraged by the Group's trading so far in 2010. There are signs of end market demand improving in Asia and in North America with Europe showing stability. With the benefits of the cost reductions made last year coming through, we believe that Morgan Crucible is well placed to capitalise on market opportunities going forward.''

Carbon

In the first three months of 2010, our Carbon businesses, excluding NP Aerospace, have achieved good revenue increases compared with both the comparative period in 2009 and in particular against the last three months of 2009.  Encouragingly we are seeing growth in all regions and across most product lines.  The strongest revenue growth has been in China and, to a lesser extent, in the Americas, where we are benefiting from an improvement in the electrical and seal and bearing businesses.  Europe is showing some revenue improvement but not to the same level as other regions. The steady improvement in order intake is giving increased confidence in the sustainability of this recovery across the breadth of our end markets. As expected and previously advised, whilst revenues in NP Aerospace are below those achieved in 2009, they remain in line with our expectations to deliver full year revenues of c£120 million.  We have continued to expand our activities in the renewable energy sectors and we remain optimistic that our initiatives in solar, wind and energy storage hold promise for future growth.

Technical Ceramics

The opening quarter of 2010 has seen the majority of the Technical Ceramics division's markets continue to improve with order books increasing steadily.

Of particular note is the performance of the North American markets where there has been a general pickup in demand for a wide range of applications from aerospace to general industrial markets. We have, however, seen some weakness in the medical device markets where there has been a level of destocking - a situation which we expect to improve in the second half of the year. The production ramp-up for the new range of Hard Disc Drive products is progressing to plan. The European market is still lagging the US but there are improved levels of activity with new orders coming through particularly in thermal processing applications. Our Asian business, although smaller in scale, is reporting improved revenues from both construction and solar power markets. Revenue for industrial gas turbine products remains weak across the globe and the outlook in this market remains subdued. Work to consolidate our California plants is proceeding to plan and the anticipated benefits are coming through.

Thermal Ceramics

Since the beginning of the year, overall market conditions have improved for the Thermal Ceramics division though the situation varies both by region and end market.  While the order intake for industrial insulation applications in Europe has shown little progression, the markets of North America and Latin America are gradually improving and our Asian businesses in general are achieving a clear strengthening of order volumes. More specifically, increasing revenue levels in India and China are encouraging.  In other sectors, the same variations are apparent; the building sector in Europe has been doubly hit by the economic downturn and harsh winter that halted many construction projects, whilst chemical and petroleum markets, which had remained robust throughout the recession period, are now seeing further order improvements, notably from the Latin American market place. In iron and steel the emerging markets are exhibiting signs of a further period of expansion, though this sector remains subdued in mature western markets. 

Molten Metal Systems

Revenues in the Molten Metal Systems division have continued to improve with particularly good growth in Asia. Margins have benefited from the reduction in operating costs implemented in the first half of 2009. The new plant in Suzhou, China, and our expanded Indian operations have all increased output, enabling the business to capitalise on a lower cost base going forward.

Financial position

There was no material change in the financial position of the Group during the first quarter of 2010 except for the increase in its equity stake in NP Aerospace from 60% to 70% for a consideration of £27.2 million to be paid in two tranches; £14.8 million on 1^st April 2010 and the balance in July 2010.

Outlook

Whilst we believe it is too early to talk about sustained long term recovery, our trading year to date and improving levels of order intake, currently leave us optimistic about our business outlook for the remainder of 2010.

For further enquiries:

Mark Robertshaw	Morgan Crucible	01753 837000
Kevin Dangerfield
Mike Smith / Clare Hunt	Finsbury	020 7251 3801

 

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