Morgan Advanced Materials (MGAM) is closing eight of its core manufacturing sites in response to a crash in aerospace and industrial demand. Facilities in the materials engineer’s technical and thermal ceramics outfits will be shuttered with the aim of saving £20m a year by 2022. It will cost £30m to enact these measures.
Morgan Advanced, which makes materials for the aerospace, automotive and industrial markets, was tipped into a half-year loss by a £63.4m impairment charge. Aerospace and automotive manufacturers including Boeing (US:BOE) have scaled back production volumes, and this has rippled across supply chains.
Almost all of the group’s impairment charge was attributable to write-downs across its two ceramics business arms, which together made up nearly two-thirds of Morgan Advanced’s half-year revenues. The group has, however, witnessed a small recovery in overall daily orders, which were down a fifth in June and July compared with last year, an improvement from the 30 per cent decline experienced in the preceding two months.
The consensus forecast for full-year 2020 earnings per share stands at 1.23p, rising to 20.94p in 2021.
|MORGAN ADVANCED MATERIALS (MGAM)|
|ORD PRICE:||220p||MARKET VALUE:||£628m|
|TOUCH:||218-220p||12-MONTH HIGH:||339p||LOW: 169p|
|DIVIDEND YIELD:||Nil||PE RATIO:||69|
|NET ASSET VALUE:||84p*||NET DEBT:||76%|
|Half-year to 30 Jun||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
|*Includes intangible assets of £196m, or 69p a share|