Morgan Advanced Materials (MGAM) H2 2024 earnings summary

Executive summary

• Revenue reached GBP 1.1 billion in 2024, with organic growth of 3.7% and 7.6% growth in faster-growing markets despite challenging H2 conditions.

• Group-adjusted operating profit was GBP 128.4 million, with an operating margin of 11.7%, up 90 basis points year-over-year.

• Accelerated restructuring/simplification program targets GBP 27 million annual savings by 2026 at a one-off cost of GBP 45 million.

• Free cash flow was GBP 15 million, reflecting improved working capital and accelerated capital investment.

• Net debt/EBITDA at 1.4x; share buyback program ongoing, with a second GBP 10 million tranche to commence.

Financial highlights

• Adjusted operating profit rose 6.7% to GBP 128.4 million; margin increased to 11.7% from 10.8%.

• Adjusted EPS was 25.5 pence; dividend per share increased to 12.2 pence.

• Free cash flow before dividends was an inflow of GBP 15 million.

• Net debt at year-end was GBP 226.2 million, or 1.4x EBITDA.

• FX had a GBP 10.1 million negative impact on adjusted operating profit.

Outlook and guidance

• Revenues expected to decline low to mid-single digit in 2025 due to continued weakness in European, Chinese industrial, and semiconductor markets.

• Margins expected to return to 12.5–15% range in 2025, supported by GBP 16 million incremental restructuring savings.

• Capital expenditure guidance: GBP 90 million in 2025, GBP 65 million in 2026, GBP 60 million in 2027.

• Net debt expected to remain within GBP 230-250 million range; leverage to stay around 1.4x.

• Medium-term outlook: 4–7% organic revenue growth, 12.5–15% adjusted operating margin, ROIC 17–20%.