Trading Statement

Morgan Crucible Co PLC
06 December 2005



6th December 2005

The Morgan Crucible Company plc ('Morgan'), the specialist materials company, is
issuing this trading update ahead of its full year results for the year ending
4th January 2006, scheduled for 22nd February 2006.

Trading Highlights


   • Sale of the Magnetics division for an enterprise value of c£300 million,
    comprising £225 million cash and £75 million of pension and other employee
    liabilities assumed by the purchaser - completion due in December


   • Morgan has continued to make good progress during the second half of
    2005 and expects to announce full-year operating profit in line with the
    consensus of analysts' expectations for the continuing group (excluding the
    Magnetics division)


   • 2005 like-for-like sales growth from continuing businesses is forecast
    to be c.4% on a constant currency basis


   • Group operating profit margins are continuing to progress well towards
    Morgan's publicly stated target of double-digit margins by the end of 2006.
    Full year 2005 margins on continuing business are expected to be over 8.5%
    vs 7.2% last year (on an IFRS basis)


   • Morgan's financial strength will be transformed as a result of the
    disposal of the Magnetics division, with a zero net debt position at the end
    of the year


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

'Morgan has entered a new phase in its performance and prospects. Our financial
position will be transformed by the proceeds from the sale of the Magnetics
division and our business has been further simplified by the disposal. We now
have a business that is focused on growing in the areas where our market
position is strongest. We are continuing to deliver on our profit improvement
plan. This strict cost management focus, combined with good organic sales growth
and a strong position in the majority of our chosen long term growth markets,
means that Morgan is well positioned for the future.'

Divisional Trading Comment

Carbon

The Carbon division continued to perform well in the second half of 2005,
building on the strong performance in the first half of the year. Market
conditions in the Americas remain robust. Performance has been strong in the
traditional brush and seals and bearings markets and also in the semiconductor
market. Armour sales reduced during the summer period due to changes in the
specifications required by the US military; however these have now been
addressed and sales are increasing once again. Trading conditions remain
relatively weak in most of Europe, although some sales growth has been
generated. There is good organic growth across most of the businesses in Asia,
particularly in China, and the division is benefiting from the capital and
resource investment that continues to be made in the region. The programme of
site rationalisation, overhead reduction and the move to low cost manufacturing
countries is continuing successfully.

Technical Ceramics

Trading performance for the Technical Ceramics division has remained strong
throughout the second half of the year. As a result the business continues to
make good progress towards its goals of organic sales growth and margin
expansion, with improvements being seen in all regions. The business has
continued to achieve cost reductions and these helped to offset raw materials
and energy cost increases. US markets remain strong overall: the telecoms market
in the US suffered in Q3 as last year from some supply chain overstocking, but
this has cleared in Q4 with a return to higher levels of activity. Overall
Europe was stable, and in Asia additional capacity is now in place in the
Yixing, China facility that will allow the division to meet the growing demand
for its thermal processing products in that region. Globally, the piezo ceramic
and medical segments continue to show good growth and an investment programme
has recently commenced to expand the piezo business across all regions.

Thermal Ceramics

The Thermal Ceramics division has continued its positive first half performance
with sales in the second half ahead of the comparative period last year. Thermal
Ceramics continues to expand in the growth markets of Asia and Latin America,
with expansion and modernisation of facilities in China, India, Australia,
Brazil and Korea. At the same time the division remains focused on reducing the
cost base in Europe and North America to help offset the impact of the cost
rises in raw materials and more significantly in energy which has put pressure
on margins in the second half of the year, particularly in Europe. The launch of
a new high temperature bio-soluble fibre (SuperwoolTM 607HT) during the second
half of 2005 is enabling the Thermal Ceramics business to increase its market
share.

Crucibles

After a difficult first half, particularly in Europe, overall trading conditions
for the Crucibles division stabilised during the latter part of the year. The
rapid worldwide increases experienced in fuel and energy costs have
significantly added to our own manufacturing costs and suppressed operating
margins.
Whilst demand in Western Europe remained relatively subdued, some growth was
achieved in parts of Eastern Europe and throughout Asia.

Financial Position

The sale of the Magnetics division will transform the balance sheet of Morgan
with net debt being eliminated. Our intention is to reduce the deficit in the UK
pension schemes substantially in Q1 2006. Financial flexibility to accelerate
the strategic development of the Group will also be enhanced by the proceeds of
the disposal. We are actively pursuing possibilities for bolt-on acquisitions as
well as further investment in growing our core businesses. We will aim for a
longer-term net debt position in a range of 1x to 1.5x EBITDA as accretive
investments are made.


Enquiries

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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