Trading Update

RNS Number : 4277F

Morgan Advanced Materials PLC

12 November 2015

 



Press Release

Trading Update 

Morgan Advanced Materials plc

12^th November 2015

Morgan Advanced Materials plc, the advanced materials company, is today issuing the following trading update covering the period from 1^st July 2015 to 11^th November 2015.

Trading conditions in the period since the half year have weakened across the Group with North America and China particularly affected by deteriorating demand. Overall our order book has mirrored this weakness, but with a mixed profile across the geographies, businesses and end markets in which we operate.

At the end of October the YTD book to bill ratio was 1.00 (June 2015 -1.03). The outstanding order book at the end of October was 5.3% below last year (June 2015 - 5.7% higher than the June 2014). Given this order profile, the Group expects that reported revenue in the second half of the year will be c7% below the first half of 2015 and that EBITA before restructuring and one-offs will be around the lower end of the range of analyst expectations.

The North American region has been the most affected by economic slowdown. General industrial demand weakness has been seen across our business over the last four months particularly oil and gas, transportation and mining markets.

In Europe the Thermal Ceramics business has continued to trade well, offset by weak demand in Technical Ceramics, Seals and Bearings and Composites and Defence Systems.

Asia/ROW has continued to see very weak demand in China, which has impacted both the products manufactured in-region for industrial markets and also those sold in to China from Morgan businesses in North America and Europe. The rest of Asia has shown some weakness in parts of its demand environment, but overall has been fairly resilient. Weak economic conditions in South America, particularly in Brazil and Argentina, are impacting the performance of our mainly industrial business in the region.

The Group is cautious about the trading and macro-economic environment for the rest of this year, and into 2016, and the Group has undertaken a range of cost reduction measures in line with this weakening economic environment and will continue to take further action as necessary. The cash cost for these restructuring and one-off items is estimated to be low, in the region of £3 million. Against this challenging market, the Group continues to invest in R&D and profitable growth opportunities which are critical for the future.  Such investment is underpinned by solid cash flow and a strong balance sheet, with low net debt estimated to be c1.5 times EBITDA at the end of 2015.

Morgan's preliminary results for the year ended 31^st December 2015 will be announced on 23^rd February 2016.

(Note:

Current market expectations compiled from analyst notes for EBITA before restructuring and one-off items range from £110.0 million to £121.5 million). 

For further enquiries:

Pete Raby/Kevin Dangerfield	Morgan Advanced Materials plc	01753 837000
Mike Smith/Nina Coad	Brunswick	0207 404 5959

 

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