Morgan Advanced Materials (MGAM) H1 2024 earnings summary

Executive summary

• Organic constant-currency revenue grew 8.2% year-over-year, with 14.9%-15% growth in faster-growing segments and 6% in the core.

• Adjusted EPS rose 48.5% to 14.7p, reflecting recovery from the prior year's cyber incident and underlying growth.

• Group adjusted operating profit margin reached 12.5%, supported by pricing and efficiency improvements.

• Return on invested capital at 19.7%, at the higher end of the target range.

• Interim dividend increased to 5.4p per share.

Financial highlights

• Revenue reached £572.6m, up 3.4% reported and 8.2% organic constant-currency year-over-year.

• Group adjusted operating profit was £71.3m, with margin at 12.5% (up from 9.0% in 1H 2023).

• Free cash flow before dividends was an outflow of £7.9m, improved from £37.1m outflow in 1H 2023.

• Net debt at period end was £222.3m (excl. lease liabilities), representing 1.3x EBITDA.

• Cash generated from continuing operations increased to £66.1m from £12.9m.

Outlook and guidance

• H2 revenues expected to be in line with H1, with operating margin maintained at 12.5%.

• Full-year organic revenue growth expected towards the top end of the 4%-7% framework range.

• Capital expenditure guidance unchanged at £120m for 2024.

• Effective tax rate guided at 25–27%.

• Cautious on demand in several end-markets but well-positioned in differentiated segments.