(Alliance News) - Morgan Advanced Materials PLC on Thursday said it swung to a loss in 2020 amid a steep revenue decline in Thermal Products and Thermal Ceramics.
Shares in Morgan Advanced Materials were up 5.1% at 329.50 pence in London in late morning trading.
The Windsor, England-based industrial products manufacturer posted a GP13.1 million pretax loss for 2020, swinging from a GBP109.7 million profit the year before.
Revenue dropped 13% to GBP910.7 million from GBP1.05 billion in 2019, including an 18% drop in Thermal Products revenue to GBP385.5 million and 18% decline in Thermal Ceramics revenue to GBP344.3 million. Molten Metals Systems revenue fell 16% to GBP41.2 million.
Furthermore, operating costs before amortisation of intangible assets fell only 1.0% to GBP906.4 million from GBP915.3 million, causing profit from operations before amortisation of intangible assets to shrink to only GBP4.3 million from GBP134.2 million.
Looking forward, Morgan Advanced Materials said the 2021 outlook is "uncertain given the ongoing Covid-19 pandemic and its impact on customer demand". However, it said order intake rates have achieved a "sustained sequential improvement" since the second 2020 quarter.
Provided there is no significant change to Covid-related operating conditions, the company said it expects organic constant-currency revenue to manage "modest growth" in 2021 as growth from the second quarter onwards offsets first quarter decline.
"Operating profit margins will benefit from the impact of volume leverage and the delivery of the benefits of our restructuring actions," the company added.
With a final dividend recommendation of 3.5p per share, total dividend per share for 2020 was increased by 38% to 5.5p from 4.0p the year before.
Morgan Advanced Materials said it intends to grow its dividend as the economic environment and earnings improve, targeting dividend cover of around three times adjusted earnings per share on average in the medium term.
The industrial firm also set out plans to cut its carbon emissions.
Chief Executive Pete Raby said: "As part of our focus on [environmental, social, and governance], I am delighted to announce that we are committing to reduce our Scope 1 and Scope 2 CO2 emissions by 50% by 2030 as part of our aspiration to be net zero by 2050.
"We are well positioned to grow our business and expand our margins as our markets recover."
By Anna Farley; annafarley@alliancenews.com
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Morgan Advanced Materials (MGAM)