MAM holds guidance, to make £67m pension fund contribution

Morgan Advanced Materials maintained full-year guidance and said it was making a £67m contribution towards its defined benefit pension scheme top free up cash flow.

In a statement ahead of its capital markets day, the company said it was accelerating organic revenue growth to extending its position in faster growing markets, supporting 3-6%a year.

MAM added that it would invest an extra £60m of capital in its semiconductor manufacturing capacity “over the next few years”.

The pension deal follows an agreement with scheme trustees to move to full hedging of inflation and interest risk.

“This will benefit both the schemes and the company by significantly reducing the volatility of valuations in the future, and represents a significant milestone towards being able to secure member benefits by means of annuities with insurance companies,” MAM said.

It added that cash pension contributions would be cut by £17m a year for at least the next three years, with modest or zero contributions afterwards.

Reporting by Frank Prenesti for Sharecast.com