Morgan Advanced Materials Misses 2025 Targets, Reviews Division

Key Earnings Report

Morgan Advanced Materials reported full-year 2025 results that fell short of analyst expectations, with earnings before interest, tax, and amortization (EBITA) coming in 7% below forecasts. The company's EBITA reached £99.1 million, missing the consensus of £106 million, while earnings per share were 15.9 pence against an expected 19.1 pence.

Operational Overview

The earnings miss was primarily attributed to underperformance in the Thermal Products division due to a soft industrial environment and higher central costs from an ERP system implementation. Despite this, sales totaled £1,030 million, slightly surpassing consensus estimates of £1,015 million. The organic growth decline of 3.3% was better than the forecasted 4.3% decline.

Strategic Review and Future Outlook

In a significant move, the company announced its Thermal Products division, accounting for 37% of revenues, is now under formal review, which includes the possibility of a disposal. For 2026, Morgan Advanced Materials stated its outlook aligns with market expectations, projecting organic revenue growth of 1% to 2% and an adjusted operating margin of around 10%.

Summary

While 2025 results were disappointing, the strategic review of a major division and a stable outlook for 2026 are now key focal points for investors. The market will be closely watching for an outcome on the Thermal Products review, which is anticipated in the first half of 2026.

FAQ

Q: Why did Morgan Advanced Materials miss its 2025 earnings target?
A: The miss was mainly due to weak performance in its Thermal Products division and higher central costs related to an ERP system implementation.

Q: What is the company's outlook for 2026?
A: The company expects 1-2% organic revenue growth and an adjusted operating margin of approximately 10%, which is in line with current market expectations.

Source: Investing.com