Morgan Advanced Materials (MGAM) H1 2026 earnings summary

Executive summary

• Revenue grew 4.8% year-over-year on an organic constant-currency basis to £518.1m, with strong performance in Energy, Aerospace, and Technical Ceramics.

• Adjusted operating profit increased to £57.8m, with margin improving to 11.2% from 10.9% year-over-year.

• Major site turnarounds, procurement initiatives, and ERP roll-out are progressing, targeting operational efficiency and £27m annualized savings by end-2026.

• Strategic review of the Thermal Products division is ongoing, with options including potential disposal and portfolio optimization.

• H1 results benefited from a non-recurring £8.9m semiconductor contract, not expected in H2.

Financial highlights

• Adjusted EPS rose to 10.7p; interim dividend maintained at 5.4p per share.

• Free cash flow was £3.5m; net debt to EBITDA (excl. IFRS 16) at 2.0x, expected to improve to 1.7x by year-end.

• Return on invested capital was 14.5%, down from 15.4% year-over-year.

• Segmental margins: Performance Carbon 17.1%, Technical Ceramics 13.0%, Thermal Products 6.4%.

• Net capital expenditure was £12.5m, lower due to reduced strategic investments and project phasing.

Outlook and guidance

• Full-year organic constant-currency revenue growth expected at ~2%, with H2 margin in line with H1, excluding the non-recurring semiconductor benefit.

• Year-end leverage anticipated at 1.7x, progressing toward the 1x–1.5x target range.

• CapEx expected at £50m for 2026, weighted to H2; ERP investment to peak in 2026 and wind down by end-2027.

• Medium-term targets: 12% adjusted operating margin by 2028, ROIC of 17–20%, and dividend cover at 2.5x.