Morgan Crucible taps investors for £54m

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The Independent Online

The Engineering company Morgan Crucible yesterday launched a rights issue to raise £54m as it announced that profits rose 26 per cent last year.

The fund raising, which is fully underwritten, is designed to help finance a cost-cutting programme to save up to £50m annually by the end of 2006.

Warren Knowlton, the chief executive, said it was a sign of confidence in the company that it could undertake its one-for-four issue at 100p - a discount of about 25 per cent to Wednesday's closing price.

"Some 11 of the last 15 offerings have been in the 40 per cent plus range in terms of discount. That tells you that the market perceives this as a positive for us," he said. The shares closed unchanged at 133p.

The group unveiled a profit for the year to 4 January of £26.9m, before exceptional items and amortisation, compared with £21.3m the previous year. Pre-tax losses, after including those charges, widened to £78m from £58.7m.

Morgan Crucible, which ended the year with £249m of debt, is still looking at selling businesses to cut borrowings, having sold three units last year.

Separately, the company said current trading was in line with its expectations after it saw its markets stabilise last year. It said it was confident in its financial and trading prospects for the current year, even though the timing of a recovery remained uncertain.