Morgan Crucible full year profit tumbles

Materials group Morgan Crucible said weak demand in the defence and renewable energy markets drove down full year earnings.

The maker of ceramics used in wind-turbine blades said pre-tax profit slumped 26.9% to £111.4m in the year ended December 31st 2012 while revenue for the period fell 8.5% to £1.01bn.

"The group's overall order intake levels have stabilised in the last two to three months. Nevertheless, we expect the end-market environment to remain fluid and uncertain in 2013. In this environment, our focus remains on self-help initiatives," it said in a company statement.

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Group EBITA margin for the full year was 12.1% compared to 13% previously and group underlying operating profit margin, after restructuring and one-off costs, was 10.8% compared to 12.9% in 2011.

Morgan Crucible said 90% of the group performed resiliently but substantial demand declines in the defence and renewable energy markets meant disappointing results in the Engineered Materials Division.

"As a result, significant actions were taken in the second half of 2012 to align our cost base with the reduced demand levels particularly in the Engineered Materials businesses," it said.

The Ceramics Division EBITA margin improved to 14.3% in 2012 compared to 13.5% in 2011 on revenue that was 1.9% lower than 2011 on a constant currency basis.

Meanwhile revenue in the Engineered Materials Division fell 15.2% for the year on a constant currency basis with EBITA margins declining to 9.4% from 13.4% before.

"Based on the restructuring actions taken in the second half of 2012 and some initial benefits from the 'One Morgan' model, we expect to improve our profit run rate by some £10m in 2013 compared to the second half of 2012," it said.

Net debt at the year-end was reduced by £22.6m to £192.8m.

The group has proposed a final dividend of 6.4p per share, up by 6.7% from the same time last year, giving a full year dividend of 10p compared to 9.25p previously.

In a separate statement Morgan Crucible confirmed that Andrew Hosty has been appointed as group chief operating officer with immediate effect following the company's adoption of a new organisational structure.

CJ