Morgan Advanced Materials reports in line trading

11th Nov 2013 10:07

- Trading in line with expectations- Second half revenue similar to first- Restructuring to deliver cost savings- Company watching for possible impact of sterlingMorgan Advanced Materials said trading since the half year has been in line with management's expectations as the group makes progress with its restructuring.Revenue in the second half is similar to the first on a currency basis while earnings before interest, tax and amortisation (EBITDA) margins continue to improve, according to a trading update for the period from July 1st to November 1st. Order books have remained stable with a modestly positive book-to-bill ratio in the year to date. The outstanding order book at the end of October was 3% above the same time last year at constant currency. The company, however, warned that if Sterling continues to strengthen against most currencies through to year end it could reduce reported revenue and EBITA for the full year by 3-4%.The group is working to streamline business through its organisation structure and restructuring actions which are expected to bring £10m of benefits this year.The costs of these efforts are now estimated to be £11m for the full year. The firm is also reviewing its portfolio and has identified a range of exit and/or sale initiatives across a number of smaller product/technology and end market areas as it focuses on higher growth, higher margin sectors. Morgan is looking to accelerate its portfolio reshaping through a combination of these initiatives as well as continued positive mix shift.As a result of this review, the company expects to sell or exit £20m of revenue over the coming months of loss-making or breakeven activities. The non-cash write offs of this are expected to be £13m in 2013.Across all regions, including North America, Europe and Asia/Rest of World, trading conditions have remained broadly similar to the first half of the year. Shares fell 1.39% to 291.90p at 10:36 on Monday.RD