Morgan Crucible strategy pays off
THE INVESTMENT COLUMN
Tuesday 12 September 1995
Interim figures yesterday showed operating margins from continuing businesses at 12 per cent in the six months to 4 July, up from 10.6 per cent in the comparable period. That had a dramatic effect on the bottom line. Although sales, at pounds 415m, were almost static, pre-tax profits marched up a fifth to pounds 42m.
All areas contributed to growth but thermal ceramics stood out, raising margins almost 2 points to more than 11 per cent almost entirely by organic growth. Growth from customers in the petrochemical and automotive industries boosted the figures, along with new products such as fibre-reinforced metal for pistons, helping profits to power from pounds 11.4m to pounds 16.7m.
The carbon business is now a whisker away from the 15 per cent margin target, after raising its return on sales over 2 points to 14.8 per cent. Reshaping the US operation should eventually deliver an additional $5m (pounds 3.2m) in extra operating profits and there should be a further boost from shifting production to Hungary.
Morgan has also done well to make up for the loss of US defence business, which hit both the technical ceramics and speciality materials businesses last year. The new semiconductor ceramics operation in California's Silicon Valley has alone raised sales from zero to $15m in less than three years.
The group has survived the recession better than many of its peers in the engineering sector and is now confounding the sceptics by cashing in on the recovery too. This year looks like at least equalling its previous peak earnings of 24p, hit in 1989, assuming profits top pounds 84m, which puts the shares up 8p at 389p, on a forward p/e of 16. With the order intake maintained at 10 to 12 per cent and late-cycle businesses still to benefit from recovery, the shares should have further to go.
- 1 This restaurant has misunderstood the concept of 'cheese and biscuits'
- 2 Raif Badawi, the Saudi Arabian blogger sentenced to 1,000 lashes, may now face death penalty
- 3 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 4 PornHub turns masturbation into energy in bid to save the planet
- 5 Have sex with your iPad thanks to the new sex toy no-one asked for
Raif Badawi, the Saudi Arabian blogger sentenced to 1,000 lashes, may now face death penalty
Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
PornHub turns masturbation into energy in bid to save the planet
Spiritual leader allegedly manipulated 400 men into removing testicles to be 'closer to God'
The 'sex selfie stick' lets you FaceTime the inside of a vagina
New theory could prove how life began and disprove God
This is what it's like to be dead, according to a guy who died for a bit
End of the licence fee: BBC to back radical overhaul of how it is funded
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Ukip would cut billions from Scottish budget to fund English tax cuts
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
iJobs Money & Business
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...
£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...