Interim Management Statement

RNS Number : 3048W

Morgan Crucible Co PLC

17 November 2010

 



Press Release

Interim Management Statement 

The Morgan Crucible Company plc

17^th November 2010

The statement below constitutes Morgan Crucible's Interim Management Statement for the period from 4^th July to 17^th November 2010.

·    The Group has continued to see positive trading momentum over the period since it reported its half year results

·    Profits for the full year are now expected to be in the top half of analyst forecasts*

·    In the ten month period to October year-on-year revenue growth was c.7%. Excluding NP Aerospace and at constant currency, revenue growth over the same period was c.16%, compared to the c.10% reported at the half year

·    Good progress is being made to realise the benefits of the divisional streamlining that was announced at the interim results. Our expectation remains to deliver at least £5m of cost savings in 2011 rising to £6-8m in 2012

·    The Group's net debt to EBITDA ratio is expected to be comfortably below 2 times at the year end, driven by good cash generation from the positive trading performance

* Analyst forecasts for 2010 EBITA (before restructuring) are between £98.8m and £109.0m.

Outlook

With the Group continuing to see good trading momentum across most of its end markets, our outlook remains positive.  In addition our ongoing focus on higher margin niche end markets, coupled with continuing benefits from cost base reductions, leaves us well placed for further progress into 2011.

Morgan Ceramics Division

The Technical Ceramics and Thermal Ceramics businesses were merged in July 2010 and are now run under a single integrated leadership team which is making good progress to realise both cost synergies and revenue growth opportunities.

Technical Ceramics Business

The majority of markets that Technical Ceramics serve have been showing improved demand during the year.  US markets, in particular, have recovered strongly, Asian demand is growing well and Europe, though more subdued, is also showing a positive trend. Across the Technical Ceramics business, strong order intake through the year has resulted in order books building steadily from the trough levels of 2009.

Aerospace markets have recovered well from the slowdown seen in mid 2009 with our US metals business, in particular, benefitting from its alignment with this sector.

Demand for consumer electronics has been robust and the take-up of our new products in hard disk drive applications is very encouraging. The medical device market remains soft for the time being, mainly due to destocking in the supply chain, but there are some signs of recovery potential for 2011. In power generation, the continued weakness of the industrial gas turbine market held back our Certech businesses, in both the US and Europe, whilst solar, which started the year slowly, picked up in the second half. 

Thermal Ceramics Business

Thermal Ceramics continued to see improving end market demand across all regions in the third quarter of the year. As a result, order books in emerging markets, particularly China and India, have continued to improve and the North America and Europe regions have also seen an increase in activity.

The chemical and petroleum sector remains robust with good demand in the Middle East and Latin America. Iron and steel demand has recovered from a very low base, as well as revenues from the automotive industry.

Morgan Engineered Materials Division

Advanced Materials &Technology Business - (formerly Carbon)

The Advanced Materials & Technology business has continued to recover across the broad range of its end markets in the third quarter of the year. Of particular note has been the strength of growth in our China business. The cost reduction initiatives started in 2009 and continuing in 2010, combined with our commitment to a low cost strategy, continue to yield benefits in our operating profit levels. We continue to pursue opportunities in the renewable energy sector with growing success in both the wind and solar energy markets.

NP Aerospace

NP Aerospace is expected to deliver 2010 revenues in line with our previously stated expectations of c.£120m. The business continues to pursue a number of domestic and international opportunities with existing and new customers. To support this, we have officially launched NP Aerospace in the US, opening an office in Detroit, and we are actively engaged with potential new customers on current and future US programmes.

 Molten Metal Systems

The strong performance in the Molten Metal Systems business in the first half has continued through the third quarter and we have continued to see increased demand levels in emerging markets.

Financial position

There was no material change in the financial position of the Group during the period. The Group's net debt to EBITDA ratio is expected to be comfortably below 2 times at the year end.

For further enquiries:

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

 

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