Morgan release half-year results of 2018

2018-07-27

Jul. 26, 2018 - Group revenue was £521.8 million (1H 2017: £518.8 million), an increase of 0.6% on a reported basis compared with 1H 2017, driven by improvements in the underlying business. Organic constant-currency revenue* increased by 7.8% in the first half. Excluding the impact of the growth in ceramic armour in Seals and Bearings, the Group organic constant-currency revenue* growth is 5.8%.

Group headline operating profit* was £61.5 million (1H 2017: £61.2 million). Headline operating profit margin* was consistent with 1H 2017 at 11.8%.

Operating profit before specific adjusting items was £57.7 million (1H 2017: £57.6 million) and profit before tax decreased to £43.9 million (1H 2017: £91.9 million). Current period operating profit was reduced by specific adjusting items of £7.6 million (1H 2017: increased by £46.1 million).

The net finance charge was £6.6 million (1H 2017: £11.8 million), primarily comprising of net bank interest and similar charges of £4.2 million (1H 2017: £8.4 million), the finance charge under IAS 19 (revised) of £2.4 million (1H 2017: £3.5 million), being the interest charge on pension scheme net liabilities. There was no gain or loss from financial instruments in the period (1H 2017: £0.1 million gain).

The Group amortisation charge for the half-year was £3.8 million (1H 2017: £3.6 million).

The Group taxation charge, excluding specific adjusting items, was £14.4 million (1H 2017: £13.8 million). The effective tax rate, excluding specific adjusting items, was 28.0% (1H 2017: 29.9%).

Headline earnings per share* was 13.1 pence (1H 2017: 11.5 pence), reflecting the improved operating profit, lower financing charges, and lower effective tax rate of 28.0%. Basic earnings per share was 9.1 pence (1H 2017: 26.9 pence).

Commenting on the results for Morgan Advanced Materials, Chief Executive Officer, Pete Raby said:

'We have made good progress with the implementation of our strategy in the first half and we expect to complete our execution priorities to plan during the year. 

Trading conditions have been good in the first half of the year in most of our markets. The Group has continued to grow organically reflecting these end market conditions and share wins driven by our strategy implementation.  As we progress through the year, we expect the growth rate will moderate slightly as we track against a tougher prior year comparator period.

We are ahead of our plan to drive operational efficiency across the business, and these savings funded investment in research and development and sales effectiveness in the first half as planned.

Our expectations for the full-year are now slightly higher than previously anticipated.'