13th Feb 2014 10:27
LONDON (Alliance News) - Morgan Advanced Materials PLC said Thursday that full-year revenue fell by around 5% as demand it its markets remain "subdued" due to a slump in global industrial growth causing the firm to be cautious in its expectations for its first-half.
In its full-year results for the period to December 31 2013, revenue came in at GBP957.8 million, down 4.9% from the restated GBP1.007 billion reported in 2012. At a constant currency basis, revenue in the second-half was similar to the first, said the firm.
Group earnings before interest, tax, depreciation and amortisation was also down, dropping 1.6% from the GBP120.9 million in 2012 to GBP119.0 million. The group EBITA margin for the second-half of 2013 increased to 12.9%, a 90 basis point improvement compared with the 12% achieved in the first-half; for the full-year the margin was 12.4%.
Morgan Advanced's operating profit also took a hit, down 9.9% to GBP89.6 million from GBP99.4 million last year. Profit before tax dropped to GPB64 million from GBP76.7 million, a 16.6% decline.
The firm notes that its balance sheet has been affected by fluctuations in the global currencies within with it deals, stating, "Trading results from our overseas operations are converted at the average exchange rates for the year. In the second-half of 2013, sterling strengthened against many of the Group's key currencies (including the US dollar, Euro and Yuan). If the year end closing exchange rates were applied to these reported results, then the reported 2013 revenue and EBITA would have been GBP44.2 million and GBP6.8 million lower, respectively."
While increasing its dividend by 0.5 pence to 10.5 pence per share for the full-year, basic earnings per share from continuing operations fell 20.9% to 14.8 pence per share from 18.7 pence per share. The firm's proposed final dividend increased to 6.7 pence per share, up from 6.4 pence in 2012.
The industrial carbon and ceramic product manufacturer said North America, Europe and Asia/Rest of World trading conditions in the second-half of 2013 have remained similar to those experienced in the first-half of the year, with revenue stable at constant currency, with EBITA margins improved across all three regions during the second-half.
North America full-year revenue fell 4.4% to GBP359.9 million from GBP376.3 million. At constant currency the year-on-year decrease was 5.6%. Revenue in the European region also fell for the year, down 1.2% to GBP357.3 million from GBP361.7 million in 2012; a 3.7% year-on-year decrease at constant currency.
Asia & Rest of the World region recorded revenues of GBP240.6 million for the year, a 10.7% drop on the GBP269.5 million in 2012; at constant currency the decrease was 5.7%. This was the only region, however, to perform better in the second-half, despite market demand showing little pickup as yet, said the firm. Revenue was 4.4% higher in the region during the latter six months than the first-half at constant currency.
Chief Executive Officer, Mark Robertshaw said, "Demand in our end-markets remained subdued in 2013. Against this industry backdrop our focus has been on driving portfolio reshaping initiatives and operational improvements. At the same time we have continued our ongoing investment in world-leading technology to enhance our sustainable competitive advantage.
Looking ahead, the company said its expectations for the first-half of 2014 is that end-market conditions overall will remain similar to those recorded in the past several months with subdued global industrial growth.
"The order book going into 2014 was stable with a book to bill ratio of just over one times. The Group's focus on active portfolio reshaping initiatives, ongoing operational improvements and innovation underpin the Board's confidence that we will continue to make further progress in 2014," Robertshaw added.
Morgan Advanced said it recorded good progress in its continuing portfolio reshaping focus, announced in November, and that it has completed transactions in respect of business that accounted for around GBP20 million in revenue in 2013, resulting in GBP12.9 million in write-offs.
The company announced its Morgan One restructuring plan last year in order to, "accelerate profitable growth by investing in core advanced materials technologies where we have differentiation, global market leadership positions and sustainable competitive advantage." The firm said that it has made headway with the plan, including increasing its R&D spend, establishing a Global Materials Centre of Excellence for Structural Ceramics in Stourport, and increasing capital expenditure by 23% due to investment in new greenfield facilities in Dalian, China.
Shares in Morgan Advanced Materials were trading up 1.44% at 316.9 pence per share Thursday, one of the biggest gainers on the FTSE 250.
By Alice Attwood; [email protected]; @AliceAtAlliance
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