Morgan Crucible (MGCR) has largely met forecasts, substantially reduced following October's profits warning, and order intake has stabilised over the past few months. Still, the engineer predicts little operational improvement in 2013, which shifts the focus firmly on to restructuring and cutting costs.
Management is also making big changes. A new regional structure - One Morgan - does away with divisional reporting, saving £6m-8m a year from 2014, and initial benefits should improve profit run rate by £10m this year compared with the second half of 2012. There's a new name, too - Morgan Advanced Materials. Clearly, chief executive Mark Robertshaw is doing all he can to sharpen up the business, but global economic growth is out of his hands. That was obvious in 2012. Collapsing margins at Morgan's engineered materials division sliced divisional underlying cash profits by 42 per cent and the group total by 15 per cent to £122m. It blames a slump in demand for solar panels and wind turbines and for armoured vehicles from the Ministry of Defence. Recovery here may be many months away. Still, improving margins offset falling sales at the larger ceramics division. Much of that is down to superior returns on Morgan's high-temperature insulating material 'superwool', and it's ramping up capacity to cope with demand.
Broker Numis Securities expects adjusted pre-tax profit of £106.5m in 2013, giving adjusted EPS of 25.4p (2012: £100m/23.2p).
MORGAN CRUCIBLE (MGCR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 284p | MARKET VALUE: | £799m | |
| TOUCH: | 283-284p | 12-MONTH HIGH: | 369p | LOW: 220p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 14 | |
| NET ASSET VALUE | 83p* | NET DEBT: | 71% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 0.84 | 82.8 | 22.2 | 7.00 |
| 2009 | 0.94 | 31.4 | 7.10 | 7.00 |
| 2010 | 1.02 | 67.7 | 15.8 | 7.70 |
| 2011 | 1.10 | 111 | 26.9 | 9.25 |
| 2012 | 1.01 | 81.4 | 20.2 | 10.0 |
| % change | -8 | -27 | -25 | +8 |
Ex-div: 17 Apr Payment: 31 May *Includes intangible assets of £265.1m, or 94p per share | ||||
