Morgan Advanced Materials offsets market decline with growth across its sectors

Manufacturer of specialist products Morgan Advanced Materials (LON:MGAM) reported on Tuesday that it booked a solid set of fundamentals for the full-year ended 31 December 2019, and that the reduction of its leverage had continued to illustrate its strong trajectory over the last three years.

The company took in £1.05 billion of revenue, up 1.5% from £1.03 billion for the year before. This led the Group’s impressive 7.6% rise in headline operating profit, up from £124.8 million, to £134.2 million.

Morgan Advanced Materials attributed its success to ‘strong growth’ in its semiconductor and electronics, chemical and petrochemical, and healthcare and aerospace sectors, which it said were able to offset declines in industrial and automotive markets.

The situation was equally stable for the company’s shareholders, with headline EPS up 4.9%, from 26.7p to 28.0p, while its dividend per share remained flat at 11.0p.

Morgan Advanced Materials reaction

Responding to the update, company CEO Pete Raby commented,

“I am pleased with the further strategic and financial progress we have made in 2019, with our strategy continuing to deliver, enhancing our growth and profitability. In our third successive year of organic growth, revenue and headline operating profit* grew 0.8% and 4.3% respectively in a challenging environment. We expanded our headline operating profit margin* to 12.8% reflecting good operational cost control and the benefit from organic revenue* growth in our faster growing market segments.”

Investor notes

Following today’s news, the company’s shares were up 2.21% or 6.40p, to 295.40p per share 25/02/20 16:38 GMT. Analysts from Peel Hunt reiterated their ‘Buy’ stance on Morgan Advanced Materials stock. The Group’s p/e ratio is 10/92, its dividend yield stands at 3.72%.

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Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.