Trading Statement

Morgan Crucible Co PLC
06 December 2004



The Morgan Crucible Company plc, the specialist materials company, is issuing
this trading update ahead of its full year results for the year ending 4th
January 2005, scheduled for 22nd February 2005.


Trading Highlights

   •Morgan has made good progress during the second half of 2004 and expects
    to announce full-year results that are in line with the consensus of
    analysts' expectations for the year in spite of adverse currency and raw
    material price increase effects.

   •Currency translation, in particular the weakness of the dollar in 2004,
    will impact turnover by circa £40m compared to 2003 and operating profit by
    circa £5m. However, like-for-like sales growth has held up well resulting in
    turnover in continuing businesses being forecast to grow in excess of 5% vs.
    2003 on a constant currency basis.

   •Group operating profit margins for 2004 are expected to improve to above
    6.5% vs. 5% last year and 3.4% in 2002, despite the impact of raw material
    price inflation

   •Operating exceptional charges are expected to be in the region of circa
    £60m of which the cash spend is circa £30m.

   •The three year profit improvement programme announced in early 2004
    remains on track and the first benefits are beginning to come through in the
    full year numbers. Our goal remains to achieve double-digit operating profit
    margins at the termination of the programme.


Divisional Trading Comment


Carbon

The Carbon division has performed well relative to 2003. The business has
benefited from strong market conditions in the Americas. Sales have been strong
in the armour (personnel and vehicle) and semiconductor markets, and there has
also been an improved performance in the traditional brush and seals and
bearings markets. Trading conditions have been more difficult in Europe, but
some sales growth has been generated. India continues to grow. The Asian
business, particularly in China, has taken advantage of the organic growth in
the region. The division is also benefiting from the rationalisation plans
implemented during both 2003 and 2004.


Magnetics

The recovery of Magnetics' major markets has continued throughout the year.
Strong demand in major segments, in particular electronic article surveillance,
has more than offset the negative impact of currency conversion and increased
raw material and energy prices. Growth in sales volume, combined with the
continuing shift of production to low-cost sites (China, Malaysia and Slovakia)
has led to a further improvement of gross margin. Restructuring projects
initiated in 2003 and 2004 are on track.


Insulating Ceramics

The sales of Thermal Ceramics year on year have improved slightly on a constant
currency basis through organic growth and the continuing importance, due to
health and safety regulations, of the Superwool range of bio-soluble products
around the world. Markets have remained flat overall with the smaller Asian
markets showing strong growth. Our North American markets have been steady,
whilst in Europe stronger automotive and building product sales have been offset
by weaker demand in other segments. The whole business has benefited from the
results of the restructuring actions taken over the past two years.

Overall trading conditions for the Crucibles division improved slightly over
2003. Strong sales growth was achieved in North America, although this was
undermined by the weakness of the US dollar. Demand in Asia continued to
strengthen with sales to China accelerating. In Europe however, the markets
remained flat and showed no real signs of recovery. The increasing use of
aluminium castings in motor vehicles continued to benefit crucible sales.


Technical Ceramics

The first half of 2004 saw Technical Ceramics enjoying relatively good trading
conditions in the aerospace, medical and semiconductor markets. In the second
half of the year there has been some softening of demand in the USA with delayed
orders as some customers, particularly in Medical and Semiconductors, looking to
reduce stock levels.  Overall the European market has remained steady. The Asian
markets, whilst much smaller, have continued to show significant growth.
Actions to reduce costs remain on plan and are expected to contribute
significantly to the operating result for 2004.


Exceptional Items

The Auto Consumer business was sold in June.

From an operating exceptionals perspective, our restructuring programme is
progressing to plan, and operating exceptional charges are expected to be in the
order of circa £60m in 2004. Major items that contribute to this are provisions
in respect of the relocation and downsizing of the company HQ; and major
restructuring projects in the Carbon division that have been initiated in this
year rather than in 2005. A provision has also been made to recognise the
advanced state of negotiations for settlement with the US Federal class action
plaintiffs. This relates to the breach of competition regulations announced in
2002. Many operating exceptional charges have been recognised in 2004 and it can
be expected that these will be much reduced in 2005


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

'Our restructuring programme as announced in February 2004 is progressing well
and remains on track to drive improvements in our operating profits and margins.
While future profit enhancement targets are not predicated on market conditions
improving from where we are today, we are nonetheless strengthening our position
in growth markets that will deliver stronger long-term returns. We continue with
our ongoing programme to reduce operational complexity, decrease cycle times and
drive down overhead costs.'


For further information, please contact:

The Morgan Crucible Company plc
Victoria Gould                          Tel:     [phone]
Director of Group Communications

Finsbury Group
Robin Walker                            Tel:     [phone]




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