Morgan shares plunge after profit warning
Thursday 14 January 1999
The warning sent Morgan Crucible shares down by 30 per cent and prompted sharp falls in other engineering stocks, the worst hit being other companies exposed to overseas markets.
Morgan Crucible said profits for the year just ended would be 15-20 per cent lower than the pounds 108m recorded in the previous year.
The group said it was responding with a "major attack" on overheads and manning levels and the disposal of businesses with combined turnover of pounds 200m-pounds 300m a year.
The 1,000 redundancies will cost the group pounds 15m and will be spread across Europe, Asia and America. The group declined to say how may job losses there would be the UK, where it employs 4,000 out of a group total of 15,000.
Vic Maundrell, the board director running the group's technical ceramics division, is also stepping down and is in line for a pay-off of up to pounds 360,000. He is on a two-year contract and earned pounds 180,000 last year.
Ian Norris, chief executive, said that the group had been hit by a downturn in orders from several of its major customers, including the steel, semiconductor, car and aerospace industries. However, Morgan Crucible is maintaining its dividend and says it is optimistic that profits will increase in the second half of this year.
Morgan Crucible shares fell 70p to 183.5p, wiping pounds 182m from its market capitalisation. Other engineering stocks fell in its wake, with Bodycote off by 9 per cent, IMI by 8 per cent, Cookson by 7 per cent and Johnson Matthey by 6 per cent.
November and December are usually highly profitable months for Morgan Crucible but last year the group was hit by cuts in inventory levels and deferment of orders into the new year.
In the US, the influx of Asian steel imports meant that fewer blast furnace refurbishments were carried out, reducing demand for Morgan Crucible's refractory products.
The group was also affected by the rescheduling of component orders following the General Motors strike and production problems at Boeing. In semiconductors, destocking and deferment of orders led to a pounds 12m reduction in business while currency translation knocked another pounds 3.5m off profits because of the strong pound.
Outlook, page 17
Exclusive: World’s most pristine waters are polluted by US Navy human waste
Saint Patrick's Day: Google Doodle marks patron saint of Ireland - here are 10 things you didn't know about the man
Missing Malaysia Airlines Flight MH370: Did jetliner fly into area controlled by Taliban? Net widens after claims final satellite signal could have been sent from the ground
Britain’s five richest families worth as much as poorest 20 per cent, says Oxfam
Nasa-funded study warns of ‘collapse of civilisation’ in coming decades
Ukip and Nigel Farage on course for remarkable victory in European elections
Katie Hopkins continues campaign to become Britain's most hated talking head with poorly timed Bob Crow tweet
Tony Benn was entirely ineffectual - and usually wrong
No EU referendum under Labour: Ed Miliband to reveal that vote on membership is ‘unlikely’ in next Parliament if party wins power
The rise of Ukip: Study warns Labour that Eurosceptic party's electoral base now 'more working class than any of the main parties'
Europeans have ‘got whiter’ due to natural selection in past 5,000 years, scientists say
- 1 Is your name now 'banned' in Saudi Arabia?
- 4 Nasa-funded study warns of ‘collapse of civilisation’ in coming decades
iJobs Money & Business
£35000 - £60000 per annum + Bonus + Benefits: Pro-Recruitment Group: You must ...
£32000 - £42000 per annum + Bonus and Benefits: Harrington Starr: A leading pr...
£60000 - £65000 Per Annum plus car allowance and excellent benefits: Clearwate...
£55000 - £65000 per annum: Harrington Starr: Front Office Support Analyst -Cha...