Morgan Advanced Materials plc (LSE:MGAM) shares dropped 16% after warning that demand in several key markets remains uncertain.
The company, which manufactures high-performance ceramics and carbon-based materials for industrial sectors including aerospace, energy, and semiconductors, expects mid single-digit organic revenue decline in 2025 with no second-half recovery.
Weaker semiconductor demand, driven by slower electric vehicle growth and high inventory levels, has led Morgan to cut planned investment in the sector from £100 million to £60 million. Projected semiconductor-related revenues for 2027 have been halved.
Despite this, 2024 results showed resilience. Revenue slipped 1.3% to £1.1 billion, but adjusted operating profit rose 6.7% to £128.4 million, lifting margins to 11.7%. The company’s accelerated cost-cutting aims to restore margins to 12.5% in 2025.
Peel Hunt said the 2025 guidance looked more cautious than current consensus. The broker said, that at first pass, underlying earnings (EBITDA) would likely be in the order of £125 million, down from forecasts of around £137 million.
It maintained its 'buy' advice and 360p price target. The shares were off 42.05p at 213.95p.