Morgan Crucible sees subdued demand in the first half

Morgan Crucible, the 'advanced materials' group, saw both revenue and profits slip slightly in its first half after seeing areas of softening demand in its two main divisions.

The company, whose products range from medical instruments, aerospace and power generation to body armour, trains and fire protection systems, reported that group revenue was down 4.8% in the six months to June 30th, from £560m to £533m.

Meanwhile, pre-tax profit slipped 3.4% from £55.6m to £53.7m, while underlying pre-tax profit fell 3.2% from £59.7m to £57.8m.

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"I am pleased by the overall resilience of the group's profits and margins against a macro-economic environment that has become more challenging," said Chief Executive Officer Mark Robertshaw.

In the Engineering Materials division, the group said it has seen weaker trading in the higher margin defence and renewables markets. Revenue was down 12.8% year-on-year. Meanwhile, sales in the Ceramic Division unit were slightly higher than the prior year.

"Where we have seen areas of softening demand in both divisions we have responded rapidly at an operational level to mitigate the impacts and the group has the ability and plans in place to make further adjustments if required," Robertshaw said.

Despite the weaker revenues and profits, the interim dividend per share was raised by 10.8% from 3.25p to 3.6p. Net debt increased from £215.4m to £222m, while the net debt-to-EBITDA ratio rose from 1.2 to 1.3 (EBITDA = earnings before interest, tax, depreciation and amortisation).

"Based on current trading conditions our expectation is for a similar performance in the second half of the year as the first half. We remain committed to delivering on the three year financial goals which we announced at the beginning of 2011," Robertshaw said.

Shares were down 0.95% at 249.8p in early trading on Tuesday.

BC