Morgan Advanced Materials (MGAM) H2 2025 earnings summary

Executive summary

• Delivered resilient performance in 2025 despite challenging market conditions, with strategic execution progressing and early wins expected in 2026.

• Strategic review of Thermal Products underway, with a focus on maximizing portfolio value and the sale of MMS completed.

• Strategy centers on operational effectiveness, growth, and portfolio optimization, targeting a 12% EBITDA margin by 2028.

• Outlook for 2026 remains stable, targeting 1%-2% organic constant currency revenue growth.

Financial highlights

• Headline revenue was £1.03 billion, down 3.3% on an organic constant currency basis year-over-year.

• Adjusted operating profit was £99.1 million, with a margin of 9.6% (down from 11.7%).

• Adjusted EPS was 15.9p, down from 24.2p; total dividend held flat at 12.2p.

• Free cash flow improved to £45.4 million from £15.1 million; closing net debt at £232 million, leverage at 1.8x.

• Significant adjusting items of £47.6 million, including impairments and business simplification costs.

Outlook and guidance

• 2026 outlook expects organic constant currency revenue growth of 1%-2% as end markets stabilize.

• Adjusted operating profit margin expected to return to around 10%.

• Capital expenditure guidance of ~£50 million per year for the next three years; ERP investment to peak in H1 2026.

• Net finance charge to be around £24 million; effective tax rate to rise to 27%-29%.

• Year-end leverage expected to be around 1.7x, with a target range of 1x-1.5x.