Morgan Advanced Materials profits jump despite currency headwinds

23rd Jul 2014 08:39

- PBT up 10.3%, EBITDA down 3.3%- Revenues down due to Defence softness- Order book up 12.4% YoYProfits were better than expected at Morgan Advanced Materials in the first half of the year, with a much improved order book in spite of the "mixed" market and depressed revenues from its defence arm.On revenues down 7.8% year-on-year at £448.4m, or flat at constant currencies, underlying pre-tax profits were up 10.3% £43.8m, on the same period the prior year, or 22.1% on a constant currency basis.The FTSE 250 materials technology group saw earnings before interest, tax, depreciation and amortisation slide 3.3% to £56.4m due to currency headwinds, or up 6% at constant rates.The outstanding order book was 12.4% higher than at the same time last year, with a book-to-bill ratio of 1.06 times thanks to all geographies being in positive territory and the Asia region showing particular strength.Chief Executive Mark Robertshaw was encouraged, although said management expects market conditions to "remain mixed". European trading was broadly stable compared with the previous year, with the exception of the Composites and Defence Systems (C&DS) business, where revenue was £13.8m lower in part through the exit of some low-margin lines of business but also due to the timing of programme orders and shipments."I am pleased with the progress we are making in proactive portfolio reshaping both in terms of exiting lower margin lines of business but also with the growth coming through in geographies such as Asia and in technology families such as Thermal Ceramics, Electrical Carbon and Seals and Bearings." He pointed to investment in research and development, such as the new Centre of Excellence for Structural Ceramics in the UK, and in higher levels of growth capital expenditure, including the new greenfield sites in Dalian, China and the United Arab Emirates. "Our focus remains on self-help initiatives: driving positive mix, delivering cost efficiencies and making continued investments in technology and differentiation. This, aligned to an improved order book compared with the equivalent period last year, gives the board confidence that the group will make progress in the second half of 2014."Shares in the company were up 3.79% to 312.20p at 09:35 on Tuesday.OH