Morgan Advanced shares tumble as net profit falls 70% in a year

(Alliance News) - Morgan Advanced Materials PLC shares tumbled on Tuesday, as the company announced a 71% drop in net profit despite broadly flat revenue in 2025, due to negative adjustments more than doubling year-on-year.

Shares in Morgan Advanced Materials were down 8.6% to 213.50 pence each on Tuesday morning in London.

The Berkshire, England-based manufacturer of specialist thermal, ceramic and carbon products serving various industries reported statutory revenue of GBP996.6 million last year, down 6.0% from GBP1.06 billion twelve months prior.

Statutory pretax profit was GBP70.6 million, down 31% from GBP102.6 million in 2024. However, Morgan Advanced reported adjustments for GBP47.6 million this year, more than doubling from last year's GBP22.4 million, bringing adjusted pretax profit to GBP23 million, down 71% from GBP80.2 million a year ago.

The company said that it had to recognise a GBP15.6 million impairment on a UK assets dedicated to the semiconductor market. "Our current view of future demand for this market subsegment indicates that these assets will not be utilised. Since this specialist machinery cannot be redeployed to fulfil other demand in the near term without further investment we have fully impaired the asset," it added.

The one-off charge brought cumulative impairment charges to GBP28.6 million, which "could be reversed if the businesses were to outperform significantly against their budgets and strategic plans, or if market conditions materially change".

The costs for the implementation of a global enterprise resource planning system also grew to GBP13.3 million this year from GBP5.2 million in 2024, further weighing on Morgan Advanced's operating profit.

Despite the challenges, the company maintained a full-year dividend of 12.2 pence a share, and said that it completed the second tranche of its GBP40 million buyback programme in January, which has then been paused to "focus on balance sheet resilience" halfway through its completion.

However, the firm remains confident in its medium-term outlook, and expects capital expenditures of GBP50 million to GBP55 million per year over the next three years.

Chief Executive Officer Damien Caby said: "The business has delivered a resilient performance against a backdrop of challenging markets. Demand in our end-markets has now broadly stabilised and...revenue has remained stable since the second half of 2024....Our business simplification programme is now materially complete and will deliver savings in-line with our published target of GBP27 million by 2026, continuing our established track-record of self-help. The sale of our Molten Metal Systems business further simplifies the group".

He added: "We are transforming our operations to drive stronger more profitable growth in our chosen markets. As part of our focus on maximising portfolio value, we are undertaking a strategic review of our Thermal Products division and further updates will be provided in due course. We remain confident in delivering sustainable above market organic revenue growth and returning the group to a 12% margin by 2028."

By Martin Miraglia, Alliance News reporter

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