18th Apr 2008 07:00
Morgan Crucible Co PLC18 April 2008 The Morgan Crucible Company plc - Interim Management Statement The Morgan Crucible Company plc ('Morgan Crucible'), the advanced materialscompany, is holding its Annual General Meeting at 11.00am today, where thefollowing comments will be made regarding current trading, financial performanceand outlook for the financial year. This statement covers the period from 5thJanuary 2008 to 17th April 2008, and constitutes Morgan Crucible's first InterimManagement Statement as required by the UK Listing Authority's Disclosure andTransparency Rules. • The Group has continued to experience good trading conditions across all its divisions in the nine weeks since we reported our full year 2007 results in late February • The order book at the end of March continues to be healthy with year on year improvements in line with those reported in February • For the year as a whole we expect to deliver performance in line with guidance set out at the preliminary results in February • We completed the acquisition of the Technical Ceramics businesses, Certech and Carpenter Advanced Ceramics from Carpenter Technology Corporation for c$145million • A c£160 million pensioner buy-out transaction was completed in March, between the Trustees of our UK pension schemes and Lucida plc, an FSA regulated company. Commenting on the year to date performance and outlook for the Group, MarkRobertshaw, Chief Executive Officer said: "The recently completed acquisition of the Carpenter businesses continues tomove our end-market mix towards higher growth, higher margin, less economicallycyclical markets. Furthermore, the buy-out of the £160m of UK pensionerliabilities significantly de-risks our balance sheet and further reinforces ouralready healthy credit position. I am pleased with the progress we havecontinued to make since the year end and in particular with the strength of ourorder books. We therefore remain confident that the business will make furtherprogress in 2008". Carbon The overall order book for Carbon is well up on last year with a particularlystrong pipeline in armour both for our silicon carbide materials and for the NPAerospace business in which we acquired an equity stake last year. Productionconstraints in our US armour business and the continuing 'lock out' situation inour India facility are expected to restrain growth and impact gross margin inthe first half of 2008. However, the ongoing strength of our order pipeline inthe US coupled with anticipated production changes coming on-stream in Q2 meanthat we expect a stronger second half of the year. The traditional Carbonbusinesses of electrical and mechanical are trading in line with expectations.We are seeing strong growth in our high temperature insulating business, largelydriven by the demand of the solar energy market. Technical Ceramics The Technical Ceramics business has enjoyed a good start to the year. The strongopening order book has delivered healthy sales for the year to date. This yearon year revenue growth is particularly encouraging when we adjust for the end oflife of a 'hard disk drive (HDD)' customer application which still had sales inQ1 2007. The main driver of our results has been the focus placed on winning new businesscombined with the continued strength of our medical and aerospace customers: thestrength in these sectors has more than offset some softness in markets relatedto the building industry and telecoms. The aerospace and medical markets remaina key area of focus for the division. The acquisition of the Carpenterbusinesses was successfully completed at the end of March and takes the divisionfurther into the growing aerospace market. Insulating Ceramics The Thermal Ceramics business has seen good top line growth year to date againstlast year particularly in light of the strong project-based business in H1 2007.This growth is driven primarily by strong Asian sales with Latin America alsotrading well. The order book remains robust especially in chemical and processing (CPI) andenergy end-markets for delivery into Asia and the Gulf Region. The roll-out ofour High Temperature and Low Shot Superwool(R) products continues with sales ofHigh Temperature Superwool(R) starting in North America from February of thisyear. We continue to convert our network of manufacturing facilities toSuperwool production capability with the Japanese facility having been recentlyconverted. Our newly redesigned and enhanced global R&D centre in Bromborough,UK is now close to completion and will be formally opened in the second quarter. Good trading conditions in the Molten Metal Systems business continued into thefirst quarter of 2008, with overall sales increasing in line with expectations.Whilst some of this increase was attributable to stock building by distributors,in advance of the planned transfer of UK manufacturing to our German and Indianplants, underlying business levels and order intake continued to exhibitunderlying growth, with all regions contributing. Financial Position The balance sheet remains strong and there have been no significant changes inthe financial position of the Group since that reported as at 4 January 2008,other than the acquisition noted above (funded through an increase in bankborrowings), and the pensioner buy-out transaction that was completed in March.Morgan Crucible made a one-off contribution to the schemes of c£4 million aspart of this pensioner buy-out transaction. Outlook The Group continues to enjoy a healthy order book. Based on year to date tradingand our healthy current order book, performance for the full year is anticipatedto be in line with expectations and the Board remains confident about theoutlook for the future. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Morgan Advanced Materials