12th September 2001 - In the recent set of interim results, Morgan Crucible reported a decline in pre tax profits from £m 41.3 to £m 37.6. However, sales held up well with an increase of 2.7% to £m 540.3 from £m 526.0.

Commenting on the results. Ian Norris, Group Chief Executive said:

“The trading environment for the first six months has been challenging. We have focused successfully on maintaining our market share, whilst reducing costs.

In the short-term, the sharpness of the slowdown experienced in a number of our markets makes projecting future demand particularly challenging. Conflicting messages as to when and at what pace to expect recovery, from both market observers as well as from changes in our own order book, add to the uncertainty.

Against this background, our overall performance in the first half of this year has been encouraging. However, our order intake during July and August, months which are never the ideal indicators, provides no clear pointer towards second half recovery. In such circumstances we believe it is appropriate to be cautious. Therefore, we currently anticipate our underlying performance in the second half to be broadly in line with that of the first half.”

Financial Results

Strategic Progress

Carbon

Electrical Carbon

Engineered Carbon
Magnetics

Ceramics Division

Technical Ceramics

Insulating Ceramics


* Before goodwill amortisation of £3.7m (2000 : £3.1m) and Corporate Exceptional Items of a loss of £2.3m (2000 : £18.3m profit).
Strategic Progress

The automotive market, particularly in the United States, has shown major weakness with overstocked manufacturers cutting back on production in order to reduce their inventory levels. Likewise, many of the higher-tech markets, which helped fuel strong organic sales growth for a number of Morgan’s businesses last year, have been adversely impacted. The markets for telecommunications equipment, semiconductor capital equipment and computer data storage have moved rapidly from strong double-digit growth to decline, which in some markets has exceeded 50%.

Morgan has responded to the market challenges with major initiatives to defend market share, cost control and a continuing focus on growth opportunities for the future. Investments in development programmes for fuel cells and multi-layered electro-ceramic actuators have been increased