Morgan Advanced Materials Stock Earnings Reports

Morgan Advanced Materials delivered a resilient FY2025 performance despite weaker end markets, with headline revenue of £1,030m (organic constant currency -3.3%) and an adjusted operating margin of 9.6%. Semiconductor exposure (c.£33m revenue decline) was the main driver of the revenue drop, while Aerospace & Defense and certain technical ceramics businesses showed good growth. The group generated £45m of headline free cash flow, improved working capital (including use of non‑recourse facilities), and ended the year with net debt of £232m (1.8x EBITDA). Management reiterated a 2026 outlook of 1%–2% organic constant currency revenue growth and an adjusted operating margin returning to around 10% as markets stabilize and operational improvements take effect. Key strategic priorities are (1) transforming operational effectiveness (procurement, site rationalization, ERP rollout), (2) driving stronger growth in selected, higher‑value adjacencies and customer collaborations (including targeted capacity builds), and (3) maximizing portfolio value via active management — including the sale of MMS and a formal strategic review of the Thermal Products division. Targets and guidance: achieve ~£50m capex per year, maintain dividend now and grow it when earnings cover recovers (~2.5x), return leverage to ~1.5x within two years, and a roadmap to reach 12% EBITDA margin by 2028. Planned one‑off items include ERP spend (~£20m in 2026) and remaining restructuring/implementation costs; specific adjusting items for FY2025 were £47.6m (including a £15.6m non‑cash semiconductor impairment).