Morgan Advanced Materials (MGAM) continued to feel the impact of slower industrial markets and lower demand from automotive customers in the second half of the year. Constant currency organic revenue growth plunged to 0.8 per cent in 2019, down from 7.4 per cent a year earlier. Despite the weaker trading conditions, the specialist materials manufacturer still saw like-for-like adjusted operating profit rise 4.3 per cent to £134m. Benefiting from its operational efficiencies programme, the margin expanded 0.7 percentage points to 12.8 per cent.
A tenth of the group’s revenue comes from China and the coronavirus outbreak has seen an extended shutdown of its Chinese manufacturing facilities. Based on current visibility, Morgan is guiding this will trim £7m off revenue and £3.5m from adjusted operating profit in the first half of 2020. This is on top of continued industrial and automotive weakness. But pointing to its faster growing market segments such as semiconductors, the group anticipates “flat to modest” constant currency organic revenue growth in the six months to 30 June 2020.
Investec forecasts adjusted pre-tax profit of £114.3m and EPS of 26.8p in 2020, rising to £122.7m and 28.7p in 2021.
| MORGAN ADVANCED MATERIALS (MGAM) | ||||
| ORD PRICE: | 290p | MARKET VALUE: | £826m | |
| TOUCH: | 290-291p | 12-MONTH HIGH: | 339p | LOW: 229p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 95p* | NET DEBT: | 71%** | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 0.91 | 59.0 | 11.9 | 11.0 |
| 2016 | 0.99 | 87.9 | 18.4 | 11.0 |
| 2017 | 1.00 | 137 | 37.8 | 11.0 |
| 2018 | 1.03 | 94.9 | 20.0 | 11.0 |
| 2019 | 1.05 | 110 | 25.2 | 11.0 |
| % change | +2 | +16 | +17 | - |
| Ex Div: | 22-May | |||
| Payment: | 29-Apr | |||
| *Includes intangible assets of £205m, or 72p a share | ||||
| **Includes lease liabilities of £64.3m | ||||
