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Morgan is rationalising at the 'lower end of the cycle'

The carbon and ceramic products manufacturer has been moving through a challenging period in key markets, but a reorganisation programme promises to boost performance
July 27, 2016

If you're planning on restructuring your business in a bid to drive efficiencies, and you want to avoid maximum disruption, then you should probably do so when your markets are in a downtrend. The latest half-year report from Morgan Advanced Materials (MGAM) details a rationalisation programme stretching from Swansea to Shanghai, which has been driven while the carbon and ceramic products manufacturer has been operating at the "lower end of the cycle" in key markets, according to chief executive Peter Raby. So while underlying operating profit contracted 13.9 per cent at constant currencies, the market has responded positively to the group's strategy to drive margins at the electrical carbon and seals segment, as well as the apparent stabilisation of trading conditions during the period under review.

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That follows a marked decline during the second half of 2015, with trading faltering across automotive, oil and gas and industrial applications, although demand for the group's thermal products held up well. And this has continued through to the end of June, reflected by a 3.8 per cent improvement in the latter segment's top line from a year ago.

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