Morgan Advanced Materials posts sharp drop in 1H profits

Morgan Advanced Materials posted sharply lower interim profits as the company's margins shrank.

"As previously announced, the cyber event we experienced at the start of the year has impacted sales, profitability and cash in the short term," chief executive officer Pete Raby said.

"Our recovery is well progressed and we have used this as an opportunity to accelerate investment in our IT infrastructure across the Group. I want to thank our employees for their hard work during a challenging period of recovery."

For the six months ending on 30 June, the manufacturer of specialist products that use carbon, advanced ceramics and composites, said that adjusted revenues grew 4.5% to reach £553.9m.

But its adjusted operating profit dropped by 31% to £50m for a 37.7% decline in adjusted earnings per share, as adjusted operating profit margins reduced from 13.7% to 9.0%.

Adjusted earnings per share meanwhile fell 37.7% to 9.9p.

In parallel, its free cash flow before acquisitions, disposals and dividends worsened from -£1.0m to -£37.1m.

Net debt doubled, increasing by 100.5% to £257.7m.

Rabay was confident on the outlook, describing demand as "robust" and reiterating its full-year guidance for revenue growth of 2-4%.

The company's interim dividend was kept at 5.3p per share.