Morgan Advanced Materials Seeks Buyers for Composite and Defence Systems Business
The provisional cash exit costs from closing the Composites and Defence Systems business are anticipated to be around £6 million (approximately $8.4 million).
Morgan Advanced Materials recently announced that its board has decided to exit the Composite and Defence Systems business. The exit will take the form of the potential divestment of certain product lines, should a suitable acquirer be found, along with the closure of the remainder of the business lines. Discussions with potential acquirers of certain product lines are reportedly at an early stage, and there can be no certainty that any divestments will be made. The provisional cash exit costs from closing the Composites and Defence Systems business are anticipated to be around £6 million (approximately $8.4 million), which may be partially offset by any proceeds from the divestment of certain product lines and the sale of certain fixed assets of the business.
In a recent trading update, Morgan announced that its sales for the first three months to March 2018 were 6.5% higher, on an organic constant currency basis, compared to the first quarter of last year. Sales for the Thermal Products division were 6.2% higher than the prior year’s first quarter, with growth in Asia and Europe. Within the Carbon and Technical Ceramics division, sales were 9% higher than the 2017 first quarter, with above-trend growth in Seals & Bearings driven by ceramic armor sales, good growth in Electrical Carbon, and modest growth in Technical Ceramics. The Composites and Defence Systems business has continued its recent declining trend.
Looking forward to the balance of the year for the group as a whole, the growth rate achieved in the first quarter is reportedly higher than is anticipated for the full year, reflecting a relatively weaker comparator period in the first quarter of the prior year. Morgan currently anticipates that its full year headline operating profit margins will be slightly ahead of the prior year, with the benefits of pricing, efficiency savings, and volume leverage being partially offset by a planned reinvestment in research and development and sales resources, as well as the dilutive impact of the divestments completed in 2017.
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