Morgan Advanced Materials PLC Q3 Trading Update (4469E)
November 06 2020 - 12:40PM
UK Regulatory
TIDMMGAM
RNS Number : 4469E
Morgan Advanced Materials PLC
06 November 2020
Press Release
Morgan Advanced Materials plc
06 November 2020
Q3 trading update
Our employees and operations
The health, safety and wellbeing of our employees is our top
priority. We continue to operate our heightened safety measures
such as social distancing and hygiene protocols in all of our
facilities to ensure the safety of our employees and we continue to
follow the advice of the relevant local governments. All of our
plants are operating at this time.
Current trading
Sales for the nine months to 30 September 2020 were 9.8% lower
for the Group, on an organic constant currency basis, compared to
the same period last year. This reflects a 11.5% organic constant
currency decline in the third quarter, an improvement from the
15.4% decline seen in the second quarter.
By business, the organic constant currency trends for the nine
months to 30 September 2020 compared to the same period last year
are as follows:
- Carbon & Technical Ceramics division sales were 6.3%
lower, with growth in Seals & Bearings partially offsetting
declines in Electrical Carbon and Technical Ceramics.
- Thermal Products division sales were 14.1% lower.
With respect to order trajectory, we have seen an improving
performance since the position reported at the half year, with
average daily order intake improving to a year on year decline of
around 15% in August to October.
Mitigating actions
Throughout the downturn we have taken appropriate action to
reduce costs, improve cash flow and increase liquidity. These
include reductions to capital expenditure other than for vital
health, safety and environmental matters, a temporary hiring freeze
for all but the most critical roles, a curtailment of discretionary
expenditure and temporary salary reductions for the Executive team
and Board.
The restructuring programme announced in July is on track, with
all of the major plant closures now announced, and key activities
underway to structurally improve the efficiency of our businesses.
This will reduce costs by GBP20 million per annum by 2022, with an
anticipated cash cost of GBP30 million to deliver these
savings.
Financial position
As at 30 September 2020 we had net debt (excluding lease
liabilities) of GBP129 million, a GBP19 million improvement during
the third quarter. We have significant liquidity, with cash and
cash equivalents of GBP136 million and undrawn headroom of GBP119
million under our revolving credit facility, and no debt maturities
until 2023.
Interim dividend
The Board recognises that dividends are an important part of the
returns for shareholders. With the improving order trajectory since
the half year and the strong financial position of the Group, the
Board has declared an interim dividend for 2020 of 2.0 pence per
share. The dividend will be payable on 11 December 2020 to
shareholders on the register at the close of trading on 20 November
2020. The ex-dividend date is 19 November 2020.
Outlook
Subject to no significant change in Covid related operating
restrictions, for the full year we anticipate the Group's organic
constant currency sales decline to be in the range of 10-14%, with
a return to organic constant currency sales growth anticipated from
the second quarter of 2021.
Pete Raby, Chief Executive Officer, said:
"We are pleased with our improving sales performance in the
third quarter and order momentum going into the fourth quarter.
With the sequential improvement in demand together with actions
taken across the business, the Board is resuming an interim
dividend. Whilst the current environment remains challenging, we
are focussed on protecting our colleagues, serving our customers
and preserving our strong financial position.
We are continuing our long-term investments to support the
future growth of the business and our restructuring actions to
improve efficiency. We are well positioned to emerge from this
crisis stronger, growing quickly as our markets recover and
expanding our margins as volumes return to more normal levels."
For further enquiries:
Morgan Advanced Materials
Pete Raby plc 01753 837 000
Peter Turner
Nina Coad Brunswick 0207 404 5959
This announcement contains inside information. The person
responsible for the release of this announcement on behalf of
Morgan Advanced Materials plc is Peter Turner, Chief Financial
Officer
LEI: I4K14LL95N2PHDL7EG85
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