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[April 2008]
Morgan Crucible Co – Interim Management Statement
The Morgan Crucible Company plc held its Annual General Meeting on 18 April 2008 where the following comments were made regarding current trading, financial performance and outlook for the financial year. This statement covers the period from 5 January 2008 to 17 April 2008 and constitutes Morgan Crucible's first Interim Management Statement as required by the UK Listing Authority's Disclosure and Transparency Rules.
• The Group has continued to experience good trading conditions across all its divisions in the nine weeks since it reported its 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 Morgan Crucible expects to deliver performance in line with guidance set out at the preliminary results in February.
• The company completed the acquisition of the Technical Ceramics businesses, Certech and Carpenter Advanced Ceramics from Carpenter Technology Corporation for around $145 million.
• A circa £160 million pensioner buy-out transaction was completed in March, between the Trustees of the UK pension schemes and Lucida plc, an FSA regulated company.
Commenting on the year to date performance and outlook for the group, CEO Mark Robertshaw said: “The recently completed acquisition of the Carpenter businesses continues to move our end-market mix towards higher growth, higher margin, less economically cyclical markets. Furthermore, the buy-out of the £160m of UK pensioner liabilities significantly de-risks our balance sheet and further reinforces our already healthy credit position.
“I am pleased with the progress we have continued to make since the year end and in particular with the strength of our order books. We therefore remain confident that the business will make further progress in 2008.”
Morgan Crucible said that the Technical Ceramics business had enjoyed a good start to the year. The strong opening order book has delivered healthy sales for the year to date. This year on year revenue growth is particularly encouraging when adjusted for the end of life of a 'hard disk drive (HDD)' customer application which still had sales in Q1 2007.
The main driver of the results was the focus placed on winning new business combined with the continued strength of the medical and aerospace customers: the strength in these sectors more than offset some softness in markets related to the building industry and telecoms. The aerospace and medical markets remain a key area of focus for the division. The acquisition of the Carpenter businesses was successfully completed at the end of March and takes the division further into the growing aerospace market.
The Thermal Ceramics business saw good top line growth year to date against last 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 also trading well.
The order book remains robust especially in chemical and processing (CPI) and energy end-markets for delivery into Asia and the Gulf Region. The roll-out of the High Temperature and Low Shot Superwool® products continued with sales of High Temperature Superwool® starting in North America from February of this year. Thermal Ceramics continues to convert its network of manufacturing facilities to Superwool production capability, with the Japanese facility having been recently converted. The 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.
On trading outlook, Morgan Crucible said that the group continued to enjoy a healthy order book. Based on year to date trading and the healthy current order book, it said that performance for the full year was anticipated to be in line with expectations and that the Board remained confident about the outlook for the future.
ENDS