Morgan Advanced Materials PLC COVID-19 update (0145P)
June 05 2020 - 2:00AM
UK Regulatory
TIDMMGAM
RNS Number : 0145P
Morgan Advanced Materials PLC
05 June 2020
Press Release
Morgan Advanced Materials plc
05 June 2020
COVID-19 update
Morgan Advanced Materials plc is issuing a further update in
relation to the impact of COVID-19 on the business, following its
statement on 31 March 2020.
Our employees and operations
The health, safety and wellbeing of our employees remains our
absolute priority. We have introduced heightened safety measures
such as social distancing and hygiene measures in all of our plants
to ensure the safety of our employees and follow the advice of the
relevant local governments. We have also reduced activity and
closed sites in geographies where that was required. This included
the short-term closure of sites in China, Italy, India, South
Africa and Mexico for a period of time. Those plants have now
reopened and all of our plants are operating at this time.
Trading performance
Sales for the 21 weeks from 1 January to 24 May 2020 were 8.8%
lower for the Group, on an organic constant-currency basis,
compared to the same period last year. This reflects a 3.2% decline
in the first quarter, largely driven by shut-downs in China,
followed by a decline of 19.5% in April and May, as the impact of
the COVID-19 pandemic was felt more widely across the rest of the
Group.
By business, the organic constant currency trends for the 21
weeks to 24 May 2020 compared to the same period last year are as
follows:
- Carbon & Technical Ceramics division sales were 4.3%
lower, with growth in Seals & Bearings partially offsetting
declines in Electrical Carbon and Technical Ceramics.
- Thermal Products division sales were 14.6% lower.
Mitigating actions and financial position
We have taken action to reduce costs, improve cash flow and
increase liquidity. These include reductions to capital expenditure
other than for vital health, safety and environmental matters, a
temporary hiring freeze for all but the most critical roles, a
curtailment of discretionary expenditure and temporary salary
reductions for the Executive team and Board.
We are also taking steps to improve the structural cost position
of the Group for the longer term, so that we emerge from this
downturn with an improved cost position. These actions will further
reduce costs by GBP20m per annum by 2022, with an anticipated cash
cost of GBP30m to deliver these savings; further details of this
programme will be provided in the Group's half year results
announcement which is due for release on 30 July 2020.
With respect to our liquidity position, we have no debt
maturities until 2023, and as at 24 May 2020 we had net debt
(excluding lease liabilities) of GBP177m, with cash of GBP95m and
undrawn headroom of GBP115m under our revolving credit
facility.
We have a global diversified business, a clear strategy and a
strong balance sheet. We remain focussed on protecting our
colleagues, serving our customers, containing our costs and
preserving our financial position.
For further enquiries:
Morgan Advanced Materials
Pete Raby plc 01753 837 000
Peter Turner
Nina Coad Brunswick 0207 404 5959
LEI: I4K14LL95N2PHDL7EG85
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END
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