Morgan Crucible warns on profits

Industrial materials provider Morgan Crucible has delivered a profits warning as trading conditions have deteriorated across most geographies, particularly in Europe and China.

Mark Robertshaw, Chief Executive Officer, commented: "With a weaker market environment group performance for the full year is likely to be materially below the board's previous expectations. We are taking firm action to reduce our cost base to protect profitability and are reviewing further structural actions. In line with our strategy the group continues to invest for the future both in new product development and capital expenditure in higher margin business areas."

The slowdown in demand has been most pronounced in the Advanced Materials and Technology business, the group said, in an interim management statement covering trading since the beginninf of July. The Ceramics division and Molten Metal Systems, which comprise over 70% of the company, have been more resilient, with margins remaining in its target mid-teen range.

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The FTSE-250 constituent maintained that "cash generation is robust and the expected net debt to EBITDA [earnings before interest, tax, depreciation and amortisation] ratio for 2012 year remains low at 1.2 to 1.3 times."

CM