REG - Morgan Adv.Materials - Full Year Results
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RNS Number : 0265V Morgan Advanced Materials PLC 03 March 2026
"Resilient performance in challenging markets; executing strategy at pace"
Full Year Results for the year ended 31 December 2025
Financial Highlights
Headline(1) Adjusted(2) Statutory (Continuing operations)
2025 2024 OCC(2) % 2025 2024(4) %
Revenue £1,030.3m £1,100.7m (3.3)% £996.6m £1,060.1m (6.0)%
Operating profit £99.1m £128.4m (17.6)% £45.2m £99.2m (54.4)%
Operating profit margin 9.6% 11.7% (170) bps 4.5% 9.4% (490) bps
Basic EPS 15.9p 24.2p n/m(3) (1.0)p 16.5p n/m(3)
Net debt to EBITDA ratio (ex. IFRS 16) 1.8x 1.4x n/m(3) 1.9x 1.5x n/m(3)
Cash generated from operations £168.6m £163.0m n/m(3) £168.6m £163.0m 3.4%
Free cash flow £45.4m £15.1m n/m(3) - - -
Total dividend per share 12.2p 12.2p n/m(3) 12.2p 12.2p n/m(3)
Return on invested capital 14.1% 17.7% n/m(3) 14.1% 17.7% n/m(3)
1. The disposal of the majority of the Molten Metal Systems ('MMS') business
completed on 12 November 2025. In order to help users of these financial
statements understand the performance of the Group during 2025, the Directors
have presented 'Headline' metrics which include the results earned by MMS up
to the date of the disposal. These metrics are presented in addition to our
usual non-GAAP adjusted performance metrics (see note 2 below).
2. Definitions of these non-GAAP measures and reconciliations to the equivalent
statutory measures can be found in the 'Glossary' and 'Alternative performance
measures' section at the end of this announcement. Throughout this report
these non-GAAP measures are clearly identified by an asterisk (*) where they
appear in text and by a footnote where they appear in tables.
3. Movements where the % movement is not meaningful are represented by n/m.
4. Statutory financial results have been restated for the year ended 31 December
2024 to present the results of MMS within discontinued operations.
Damien Caby, Chief Executive Officer, commented:
"The business has delivered a resilient performance against a backdrop of
challenging markets. Demand in our end-markets has now broadly stabilised
and, on an organic constant-currency basis*, revenue has remained stable since
the second half of 2024. We have made good progress against our
priorities. Our business simplification programme is now materially complete
and will deliver savings in-line with our published target of £27 million by
2026, continuing our established track-record of self-help. The sale of our
Molten Metal Systems business further simplifies the Group and demonstrates
our commitment to take decisive action to manage our portfolio and create
value for shareholders.
"The strategy update in December 2025 set out a clear path for action and we
are now executing at pace. We are transforming our operations to drive
stronger more profitable growth in our chosen markets. As part of our focus
on maximising portfolio value, we are undertaking a strategic review of our
Thermal Products division and further updates will be provided in due
course. We remain confident in delivering sustainable above market organic
revenue growth and returning the Group to a 12% margin by 2028."
Highlights
· Organic constant-currency* revenue decline of 3.3% reflects end-market
weakness, notably in Semiconductor and European Industrial markets;
stabilisation in these markets during H2 2025
· Business simplification programme progressing well; additional £16 million of
savings during 2025, as expected, compared to our 2023 baseline
· Group headline adjusted operating profit* margin of 9.6%; benefits from
efficiency and business simplification partly offset the impact of weaker
markets
· Headline Net debt*/EBITDA* of 1.8 times reflects Semiconductor and
simplification programme investments; leverage to return towards our framework
targets during 2026 upon realisation of MMS disposal proceeds
· Good progress against our strategy; first major site turnaround plan
initiated, group led procurement set to deliver early wins in 2026, ERP
roll-out to kick off in Q2, MMS disposal completed
· Strategic review of Thermal Products division formally underway; updates to be
provided in due course
· Outlook for 2026 in-line with current market expectations
Outlook
Demand in our end-markets has broadly stabilised and our outlook for 2026 is
in-line with current market expectations. We expect organic
constant-currency* revenue growth of 1-2% and an adjusted operating profit*
margin at or around 10%, reflecting our continued focus on efficiency and the
first results of our Transform initiatives.
As previously reported, our medium-term guidance for overall capital
expenditure is for around £50-£55 million per annum over the next three
years.
We remain confident in achieving our medium-term financial framework.
Strategic Review of Thermal Products division
Morgan Advanced Materials Plc is undertaking a strategic review of its Thermal
Products division, as part of its ongoing programme to maximise the Group's
margin and growth profile and ensure that resources are deployed where they
can deliver the strongest long-term returns. The review will assess a full
range of strategic options, including a potential disposal. No decisions have
been made, and further updates will be provided in due course.
Results presentation today
There will be an analyst and investor presentation at 10:00 (UK time) today
via web-conference. A live webcast and slide presentation of this event will
be available on www.morganadvancedmaterials.com
(http://www.morganadvancedmaterials.com) .
We recommend that you register by 09:45 (UK time).
Enquiries
Richard Armitage, CFO Morgan Advanced Materials 01753 837 000
Nicholas Frost, Investor Relations Morgan Advanced Materials
Nina Coad Brunswick 0207 404 5959
Forward looking statements
This announcement contains forward-looking statements. These statements have
been made in good faith based on the information available up to the time of
the approval of this announcement. No assurance can be given that these
expectations will prove to have been correct. By their nature, forward-looking
statements involve risks, uncertainties or assumptions that could cause actual
results to differ materially from those expressed or implied by these
forward-looking statements. As such, undue reliance should not be placed on
forward-looking statements. The Directors undertake no obligation to update
any forward-looking statements whether as a result of new information, future
events or otherwise.
About Morgan Advanced Materials plc
Morgan Advanced Materials is a global leader in advanced materials. We
combine material science, deep application expertise and process excellence to
co-design and manufacture mission critical solutions. These solutions are at
the heart of society's most essential systems today and they will enable the
breakthroughs of tomorrow. Our products help people move, build and thrive. We
help power human progress, where it matters most.
Established in 1856, we have a proven track record in delivering for our
customers, underpinned by over a century of innovation. We employ
approximately 8,100 people worldwide, across 57 operating sites serving a
diverse range of customers across a range of end-markets.
Learn more at www.morganadvancedmaterials.com
(http://www.morganadvancedmaterials.com) .
Notes to editors
Business simplification benefits
2023 2024 2025 2026 Total
£m
£m
£m
£m
£m
Adjusted operating profit* benefits 1 8 24 27 -
Costs charged to specific adjusting items (7) (13) (15) (5) (40)
Our Strategy to become the leading force in our chosen markets
Transform operational effectiveness: We will build a scalable, more
efficient and more agile business. We are going beyond site consolidation, we
are leveraging the Group's scale, stepping up supply chain effectiveness, and
turning around our largest underperforming sites.
· We will deploy Group led category management across an indirect spend cost
base of £170m. We will deliver significant savings and reinforce the
efficiency and reliability of our supply chain.
· We will implement structured and comprehensive multi-year programmes to turn
around large underperforming sites that represent more than 20% of Group
revenue. We will optimise production cycles and supply chains and simplify the
asset base and product portfolio.
· We are investing in digital transformation to enhance business analytics, make
better informed decisions and act with agility and confidence. We will
streamline and standardise our back office processes to focus business teams
on delivery and growth.
Drive stronger growth: We will systematically upgrade our position in the
value chain so that we can grow profitability irrespective of market cycles
and increase our market share and addressable market.
· Our Performance Carbon division will innovate to increase performance and
longevity in rail and wind. It will capitalise on its reputation, technology
and trade control capabilities to expand in defence systems.
· Our Technical Ceramics division will increase its capacity to meet increasing
aircraft deliveries and the ramp up of the new generation of engines.
· Our Thermal Products division will reinforce its outreach in the process
industries to enable the decarbonisation of steel and chemical processes.
Maximise portfolio value: We will make bold choices. We will invest
selectively to expand our leading positions, partner where we know we cannot
win alone and exit markets where we cannot improve our market position or
right to win.
· Our Performance Carbon division will pursue opportunities to supply subsystems
in Energy and Industrials where the supply chains are fragmented and the
decarbonisation and digitalisation trends call for innovation. It will assess
partnerships in China for Semiconductor SiC material growth.
· Our Technical Ceramics division will leverage its expertise in high-value
niches to expand into new adjacencies, with priorities in Industrials and
Aerospace.
· Our Thermal Products division will expand its structural partnerships in fire
protection. It is a very large market and we are targeting the geographies and
applications where the value proposition is compelling.
· We are undertaking a strategic review of our Thermal Products division and
further updates will be provided in due course
Who we are will help us succeed: We are a purpose-driven organisation. We
are resilient and we thrive when it comes to solving tough problems. We are
curious and innovative and we are committed to continuous learning. We are
collaborative and open minded and we foster a culture of transparency and
humility. As a business, we are focused on recruiting, developing and
retaining the high calibre of individuals we need to deliver on the next
chapter for Morgan.
Chief Executive Officer's Review
Introduction
I am honoured that the Board selected me to serve as CEO of Morgan Advanced
Materials, following two and a half years as president of our Thermal Products
division. Morgan is a recognised global leader in advanced materials; our
material science, deep application expertise and manufacturing excellence
power progress that truly matters.
Since becoming CEO in July 2025, I have spent time visiting our sites to
assess our operations and I have met with our leaders, our employees and our
customers. The passion of our employees throughout the organisation is
evident. They are proud to be a part of Morgan and they truly believe in the
positive impact our products and solutions can have on the world. Our
customers value the quality and performance of our products and they trust us
to co-design and manufacture mission critical solutions.
These are strong foundations upon which to build, but we have work to do to
unlock our true potential. With our distinctive capabilities, Morgan can be
the leading force in our chosen markets. As I set out at our Strategy Update
event in December, we have a clear strategy that is focused on factors within
our own control which will create an efficient and high performing group. Our
strategy will return the Group to a 12% margin by 2028 and will establish a
business that grows faster and delivers more robust margins. Together, we will
transform our operational effectiveness, drive stronger growth in selected
value chains with deeper collaborations and upgraded positions, and maximise
the value of our portfolio.
I am excited about the next phase of our journey, and inspired to lead the
Morgan team through this new chapter.
Group results
Organic constant-currency* revenue declined by 3.3% compared to 2024, driven
by the well-publicised challenging conditions in the Semiconductor market.
We saw resilience across our other markets; weakening market conditions in
European Industrial and Global Automotive markets and lower revenue in
Healthcare markets were largely offset by a strong performance in Aerospace
and Defence markets.
Group headline* adjusted operating profit* margin was down 210 bps to 9.6%
(2024: 11.7%). Volume decline and mix impacts accounted for a 440 bps decrease
in margin, but our continued focus on actions within our control allowed us to
offset a significant portion of this decline. Margin gains from above
inflation pricing and efficiency offered a 170 bps improvement, further
supported by our simplification initiatives which generated an additional 160
bps improvement. The remaining movement in margin relates to foreign
exchange and other non-trading items.
Operational progress
We have now largely completed our business simplification programme which has
streamlined our management structures, reduced the number of divisions we
operate and consolidated manufacturing plants to provide better support to our
customers and to deliver synergies from key operational activities. Since
2016, we have progressively consolidated our smaller sites, reducing the total
number of sites from 85 to 60 before the disposal of MMS.
We have continued our strategic project to develop and deploy a Global
Enterprise Resource Planning (ERP) system which is intended to replace
numerous different legacy systems across the Morgan network. The programme,
which is expected to complete over the next two years, will create further
opportunities to align business processes, and to further strengthen
information security and the control environment.
Headline(*) leverage at the balance sheet date of 1.8x (2024: 1.4x) reflects
the reduction in Group profit, the completion of our Semiconductor capacity
investment and our investment in business simplification. Our ongoing
investment in digital transformation is a key strategic enabler to transform
the Group's operational effectiveness and leverage its scale. This investment
will continue into 2026 and 2027. Leverage will reduce towards our target
range during 2026 as our investment in Semiconductor capacity and the business
simplification programme come to a close and upon realisation of the full
proceeds from the disposal of our MMS business.
Sale of MMS
In August 2025, we announced that we had reached an agreement to sell the
majority of our Molten Metal Systems ('MMS') business and the transaction
completed on 12 November 2025. The details of the transaction and
consideration mechanisms are set out in the Financial Review.
The disposal of MMS is clearly aligned to our strategy, and it demonstrates
our commitment to take decisive action to manage our portfolio. It simplifies
the organisation, reducing the Group's operating footprint to 57 sites, and it
ensures that our business is focused on the selected markets where we have a
clear right to win to accelerate organic growth and generate higher returns.
Semiconductor impairment
There is a large and growing market for Silicon Carbide, however, the supply
chain is experiencing a shift towards China. We remain committed to supplying
our customers in the US and Europe and expect to utilise our US based assets
to address this demand.
We have assessed the carrying value of our assets in light of these market
developments during 2025. As a result of this exercise, the Group has
recognised an impairment charge of £15.6 million related to certain
specialist assets dedicated to the Semiconductor material growth market held
by Performance Carbon at a UK site. This impairment is consistent with the
expectations for our Semiconductor business that we set out in December.
Refer to the Financial Review for further details.
Moving forwards, our strategy for the Semiconductor market is focused on the
wafer fabrication part of the value chain. This market is dominated by
American, European and Japanese Original Equipment Manufacturers ('OEMs') and
we supply most of these businesses in various parts of the production process.
The barriers to entry in this market are high and Morgan is well-positioned to
win. Our goal is to deepen our collaboration, working as one enterprise to
expand the scope of our supply.
Progress against our Strategy
As outlined at our Strategy Update event in December 2025, the aim of our
strategy is to unlock Morgan's potential and create a highly efficient, faster
growing company. We will become the leading force in our chosen markets. The
presentation and a recording are available at www.morganadvancedmaterials.com
(http://www.morganadvancedmaterials.com)
Our strategy is focused on three key levers: Transform operational
effectiveness, Drive stronger growth, and Maximise our portfolio value. We are
focused on executing at pace and we made good early progress in 2025.
Transform: We are addressing specific gaps in our supply chain effectiveness
which have constrained our growth by holding back our service levels and we
are focused on turning around a small number of large underperforming sites.
We will make more of the Group's scale by deploying centrally led procurement.
· In respect of site turnaround, work has already commenced to cross-qualify
manufacturing lines, to optimise production and inventory management.
· In procurement, we have the assessed the Group's indirect spend and our new
Group Procurement Lead joined the business in February 2026.
· We deployed our new ERP platform at a pilot site during 2025 and are set to
commence deployment across the business in 2026.
Drive: We are driving stronger growth by focusing on our right to win to
enhance our value proposition and gain market share. We have initiated focused
plans to upgrade our position in selected value chains to allow us to grow
irrespective of market cycles.
· Our Performance Carbon division is capitalising on its reputation and
innovation in body armour and trade control capabilities by expanding into
other defence systems. We are making a targeted investment in incremental
capacity during 2026, backed by multi-year contracts.
· Our Technical Ceramics division is building on its leading position in ceramic
cores for engines blades by investing in capacity to meet the increase in
aircraft deliveries and progressive ramp up of new generation engines with
higher design complexity.
Maximise: We are continuing to maximise our portfolio value through
partnerships, divestments and bolt-on M&A.
· We have commenced a formal Strategic review of our Thermal Products
division. We will assess a full range of strategic options, including
options for significant business performance improvement measures and a
potential disposal. We will undertake the necessary preparatory work to
ensure that we can act at pace once the review reaches a conclusion. No
decisions have been made and we will provide further market updates in due
course.
Our strategy will deliver against a clear medium-term financial framework
· Above market organic constant-currency* revenue growth: We expect to achieve
growth in excess of GDP
· Reliable and competitive margins: We expect to achieve an adjusted operating
profit* margin of 12% by 2028 with sustainable margins of between 12% and 14%
beyond 2028
· Sustainable EPS Growth: Achieving sustained growth in adjusted Earnings per
Share*, ahead of organic revenue growth, driven by a combination of organic
growth, margin accretion, shareholder returns and M&A
· Attractive ROIC: 17% - 20% ROIC
· Resilient balance sheet: Leverage range of 1.0x to 1.5x, or up to 2.0x
adjusted EBITDA* post-acquisition, utilising our strong balance sheet to fund
our organic growth, and then over time deploying excess capital to fund
incremental M&A or additional shareholder returns as appropriate
· Appropriate dividend cover: Shareholder dividends maintained then growing with
adjusted earnings at around 2.5x cover
Share buyback
As announced in December 2025, we paused our buyback programme as part of our
focus on balance sheet resilience. The second tranche of the buyback has now
completed and the Group has purchased a total of £20 million of shares.
Safety, people, sustainability
We have clear 2030 goals for our business, all of which are measured against a
2015 baseline:
1. A 0.10 LTA rate: our LTA rate was 0.18 (2024: 0.13) which is an increase
compared to the prior year. Safety of our employees is essential and
addressing the root causes of lost time and recordable accidents is a critical
focus for the Board and senior management team. We have undertaken a detailed
root cause analysis of 2025 incidents, and as a result, we have developed a
focused plan to reinforce the skills and engagement of our manufacturing
leaders across the Group, and to implement more focused actions at selected
sites during 2026. Alongside, we will maintain our focus on process safety. We
have made significant progress in this area during 2025, with strong
engagement and momentum in the implementation of the improvement plans in the
first of three waves of deployment.
2. 40% of female leadership: We continue to improve our gender diversity and
36% of our leadership population are female, a year on year improvement of 2%.
We will continue our focus on ensuring that our policies, working conditions,
development and support offering, and recruiting approaches deliver a more
supportive environment for our female leaders.
3. A top quartile engagement score: our engagement score was 75%, an
improvement on the prior year. It is pleasing to see progress on this metric,
particularly at the sites where engagement levels are below average. Our
leaders remain focused with site specific actions.
4. Reduce Scope 1 and 2 CO(2) emissions by 50%: We reduced by 5% in the year
and we are now 58% below our baseline, significantly ahead of our glidepath.
80% of our power is from low carbon sources and going forward, as our business
grows, we are focusing on process efficiency and new technologies in order to
sustain this performance.
5. Reduce water usage and water use in high-stress areas by 30%: Our overall
water usage reduced by 11% and water use in high-stressed areas has decreased
by 3%. We are 39% and 23% below our baseline, respectively.
Financial review
Discontinued operations and alternative performance metrics
In August 2025, the Group announced that it had reached an agreement to sell
the majority of its MMS business which was reported within the Thermal
Products reporting segment. The transaction completed on 12 November 2025.
The disposal represented a major line of business for the Group and
accordingly, it is classified as a discontinued operation under 'IFRS 5 -
Non-current Assets Held for Sale and Discontinued Operations.' In accordance
with IFRS 5, current year results for MMS are shown as one line 'profit from
discontinued operations' on the face of the income statement and prior year
results have been restated on the same basis.
In addition to statutory metrics, the Group monitors business performance
through alternative performance measures (APMs) which are non-GAAP measures
not defined under IFRS. The Directors consider that these APMs provide useful
information to stakeholders, including additional insight into ongoing trading
and year-on-year comparisons. These APMs are not intended as a substitute for
IFRS measures and should be considered as providing complementary insight. The
Group defines each APM and therefore they may not be directly comparable with
similarly named metrics in other businesses. The purpose and definition of
each APM, along with a reconciliation to the equivalent statutory metric, are
included in the 'Glossary of Terms and Alternative Performance Metrics'
sections included at the end of this announcement.
In order to help users of these financial statements understand the
performance of the Group during 2025, where relevant, the Directors have
presented 'Headline' metrics which include the results earned by MMS up to the
date of the disposal. These metrics are clearly denoted by the use of
'Headline' and they are presented alongside statutory results and in addition
to the usual APMs presented by the business.
Throughout this Report, these non-GAAP measures are clearly identified by an
asterisk (*) where they appear in text and by a footnote where they appear in
tables and charts.
Unless otherwise stated, all financial information reported in the Financial
review relates to continuing operations.
Group financial performance
Summary financial information for the year ended 31 December 2025
Summary income statement and key metrics 2025 2024(2) Change
£m
£m
%
Headline(1) metrics
Headline(1) Revenue 1,030.3 1,100.7 (6.4)%
Headline(1) Adjusted operating profit(1) 99.1 128.4 (22.8)%
Headline Adjusted operating profit(1) margin 9.6% 11.7% (210) bps
Net debt(1) to Headline EBITDA(1) ratio 1.8x 1.4x n/m(3)
Results from continuing operations
Revenue 996.6 1,060.1 (6.0)%
Adjusted operating profit(1) 93.8 123.3 (23.9)%
Adjusted operating profit margin 9.4% 11.6% (220) bps
Amortisation of intangible assets (1.0) (1.7) (41.2)%
Specific adjusting items(4) (47.6) (22.4) 112.5%
Operating profit from continuing operations 45.2 99.2 (54.4)%
Net financing costs (22.2) (19.0) 16.8%
Profit before taxation from continuing operations 23.0 80.2 (71.3)%
Income tax expense (17.9) (24.7) (27.5)%
Profit after taxation from continuing operations 5.1 55.5 (90.8)%
Profit after taxation from discontinued operations 23.7 3.3 618.2%
Profit for the year 28.8 58.8 (51.0)%
Basic EPS from continuing and discontinuing operations 7.5p 17.7p (57.6)%
Adjusted EPS(1) 15.9p 24.2p (34.3)%
Return on invested capital(1) 14.1% 17.7% (360)bps
Summary cash flow and key metrics 2025 2024 Change
£m
£m
%
Headline cash generated from operations 168.6 163.0 3.4%
Headline free cash flow(1) 45.4 15.1 200.7%
Cash and cash equivalents 79.3 120.8 (34.4)%
Net debt (1) 232.2 226.2 2.7%
Headline net debt(1) to EBITDA(1) ratio 1.8x 1.4x n/m(3)
Total dividend per share 12.2p 12.2p -
(1) Definitions of these non-GAAP measures and reconciliations to the
equivalent statutory measure can be found in the 'Glossary and Alternative
Performance Metrics' section at the end of this announcement.
(2) Statutory financial results have been restated for the year ended 31
December 2024 to present the results of MMS within discontinued operations.
(3) Movements where the percentage movement is not meaningful are represented
by n/m.
(4) Details of specific adjusting items arising during the year and the
comparative period are given in note 4 to the condensed consolidated financial
statements.
Revenue
Revenue 2025 2024(1) Change OCC(2) Change
£m
£m
%
%
Performance Carbon 306.8 345.2 (11.1)% (8.9)%
Technical Ceramics 341.6 337.3 1.3% 3.4%
Thermal Products 348.2 377.6 (7.8)% (4.2)%
Revenue from continuing operations 996.6 1,060.1 (6.0)% (3.3)%
Discontinued operations - MMS 33.7 40.6 n/m(3) n/m(3)
Headline revenue 1,030.3 1,100.7 (6.4)% (3.3)%
(1) Statutory financial results have been restated for the year ended 31
December 2024 to present the results of MMS within discontinued operations.
(2) Definitions of these non-GAAP measures and reconciliations to the
equivalent statutory measure can be found in the 'Glossary and Alternative
Performance Metrics' section at the end of this announcement.
(3) Movements where the percentage movement is not meaningful are represented
by n/m.
On a headline* basis, the Group recognised revenue of £1,030.3 million (2024:
£1,100.7 million), a year on year decrease of 6.4% at reported currency
rates. Revenue was significantly impacted by foreign exchange headwinds,
largely related to the US Dollar and sterling exchange rates. On an organic
constant currency basis*, Group revenue decreased by 3.3% year-on-year.
Performance Carbon was heavily impacted by the well-publicised conditions
within the Semiconductor market and in total the division delivered revenue of
£306.8 million, an 8.9% decline versus the prior year on an organic
constant-currency* '(OCC') basis. Lower Semiconductor sales drove the year
on year decline, although we note that revenue has stabilised in the second
half of the year. Across other markets, the business has demonstrated a
resilient revenue performance. The business saw a smaller decline in Aerospace
& Defence sales which reflects the timing of some large defence orders
which are now expected in 2026. This was largely offset by increased demand
in rail and energy markets.
Technical Ceramics has demonstrated good resilience over the year, delivering
revenue of £341.6 million, a 3.4% increase on an OCC* basis. The business
saw strong demand in Aerospace & Defence markets, driven by demand for new
aircraft along with robust maintenance revenue driven by increased fleet
utilisation. This growth was partially offset by the impact of Semiconductor
market dynamics and notably lower sales into Healthcare markets driven by
customer inventory adjustments.
Thermal Products delivered revenue of £348.2 million, a 4.2% decline on an
OCC* basis. This performance was impacted by regional economic dynamics,
primarily driven by continued challenging conditions in European industrial
markets. Overall, we note revenues have remained broadly stable since the
second half of 2024.
Adjusted operating profit
2025 2024
Adjusted operating profit(2) Profit Margin 2024(1) Margin
£m
%
£m
%
Performance Carbon 41.2 13.4% 55.1 16.0%
Technical Ceramics 39.4 11.5% 39.2 11.6%
Thermal Products 23.5 6.7% 37.5 9.9%
Central costs (10.3) n/m (8.5) n/m(3)
Adjusted operating profit from continuing operations 93.8 9.4% 123.3 11.6%
Discontinued operations - MMS 5.3 n/m(3) 5.1 n/m(3)
Headline Adjusted operating profit 99.1 9.6% 128.4 11.7%
(1) Statutory financial results have been restated for the year ended 31
December 2024 to present the results of MMS within discontinued operations.
(2) Definitions of these non-GAAP measures and reconciliations to the
equivalent statutory measure can be found in the 'Glossary and Alternative
Performance Metrics' section at the end of this announcement.
(3) Movements where the percentage movement is not meaningful are represented
by n/m.
The Group delivered headline adjusted operating profit* of £99.1 million
(2024: £128.4 million) and a headline adjusted operating profit margin of
9.6% (2024: 11.7% reported; 11.3% on an OCC* basis). Whilst volume and mix
impacts drove a 440 bps decrease in margins, our overall margin delivery was
positively impacted by our continued focus on simplification and efficiency.
On a combined basis, the net impact of pricing, inflation and efficiency
initiatives contributed 170 bps improvement to margin with simplification
initiatives providing a further 160 bps margin. The remaining movement in
margin relates to foreign exchange and other non-trading items.
Performance Carbon delivered an adjusted operating profit margin* of 13.4%, a
260 bps decrease compared to the prior year. The impact of lower volume and
an adverse sales mix was partially offset by substantial gains from efficiency
and simplification initiatives. Margin was further supported by £5.2
million of trading receipts that will not repeat in 2026.
Technical Ceramics delivered an adjusted operating profit margin* of 11.5%
which was broadly in-line with the prior year.
Thermal Products delivered an adjusted operating profit margin* of 6.7%, a 320
bps decrease compared to the prior year. Performance reflects challenging
market conditions and foreign exchange headwinds and hyperinflation
accounting.
On a continuing operations basis, Central costs of £10.3 million have
increased by £1.8 million compared to 2024. This increase reflects the
build-out of our central ERP team who will support the new system on an
ongoing basis. Central costs for the prior year have been restated to
include central costs which were previously allocated to MMS that have
remained with the Group post deal close.
Adjusted profit margins for the discontinued MMS business are not considered
meaningful since they exclude central costs previously allocated to the
division, thus artificially increasing the profit attributable to the
operating unit.
Specific adjusting items
Specific adjusting items from continuing operations were £47.6 million (2024:
£22.4 million) and comprised the following:
2025 2024
£m
£m
Specific adjusting items from continuing operations
Impairment of non-financial assets (15.6) (4.2)
Business simplification restructuring (13.4) (12.4)
Design, configuration, customisation and implementation of a Global ERP system (13.3) (5.2)
Reversal of prior year impairments following Argentina's currency devaluation 1.9 0.5
Residual costs associated with the cyber security incident - (1.1)
Movement in fair value of consideration shares held at FVTPL (7.2) -
Total specific adjusting items from continuing operations before income tax (47.6) (22.4)
Income tax credit from specific adjusting items 1.5 2.3
Total specific adjusting items from continuing operations after income tax (46.1) (20.1)
During 2025, the Group has recognised an impairment charge of £15.6 million
related to certain specialist assets at a UK site which are dedicated to the
Semiconductor market. Our current view of future demand for this market
subsegment indicates that these assets will not be utilised. Since this
specialist machinery cannot be redeployed to fulfil other demand in the near
term without further investment we have fully impaired the asset, in-line with
the requirements of 'IAS 36 - Impairment of assets'. There is no change to
our previously communicated expectations for the Semiconductor market
opportunity for Morgan.
The Group has recorded a cumulative total of £28.6 million impairment charges
recognised in current and prior periods, for assets which it continues to
use. These impairments could be reversed if the businesses were to
outperform significantly against their budgets and strategic plans, or if
market conditions materially change. A sensitivity analysis was carried out
using reasonably possible changes to the key assumptions in assessing the
value in use of these non-financial assets. This did not result in a material
reversal of the remaining impaired amounts in 2025 (2024: £nil); the only
impairment reversed during the year relates to trading assets in Argentina, as
noted below. Refer to note 4 to the condensed consolidated financial
statements for details of the impairment review and key assumptions made.
The Group incurred total expenditure of £14.3 million in respect of our
business simplification and restructuring programme during the year (2024:
£13.1 million). Of this total, £13.4 million relates to continuing
operations (2024: 12.4 million) with the balance of £0.9 million incurred by
MMS and included within discontinued operations (2024: £0.7 million).
As at 31 December 2025, the Group's business simplification initiatives have
delivered total cumulative adjusted operating profit* benefits of £24
million, compared to our 2023 baseline, for a total cost total of £35
million. During 2025, we have rephased certain planned activities to ensure
clear prioritisation and execution throughout the business. We continue to
expect to deliver total cumulative savings of £27 million by 2026, compared
to the 2023 baseline, for a total cost of approximately £40 million.
The Group incurred £13.3 million of exceptional costs associated with the
design, configuration, customisation and implementation of a Global ERP system
(2024: £5.2 million). We made good progress in 2025, completing a pilot
system roll-out and finalising design and build ahead of a go-live of material
sites across North America and Europe during 2026. We anticipate that
roll-out and implementation will be completed by the end of 2027. Alongside
our investment in implementation, we are building out a dedicated ERP and
project team that will remain with the business post-implementation and these
costs are recognised within underlying results. We expect to incur ERP
implementation costs of between £22-24 million in 2026 which will be
recognised within specific adjusting items.
The Group recognised a credit of £1.9 million relating to the reversal of a
fixed asset impairment associated with operations in Argentina. The
impairment was recognised in 2023, following a currency devaluation of more
than 50%. During 2025, we have successfully repatriated a cash dividend from
Argentina to the UK via the Bopreal mechanism and the business has continued
to operate profitably despite ongoing economic uncertainty. Accordingly, the
Group has recognised a full reversal of its previous fixed asset impairment.
Within 'specific adjusting items' from continuing operations, the Group
recognised a fair value and foreign exchange loss on consideration shares
received in a listed Indian business as part of the consideration received for
the disposal of MMS. Further details of the MMS transaction are set out
below.
2025 2024
£m
£m
Specific adjusting items from discontinuing operations(1)
Net restructuring charge (0.9) (0.7)
Gain on disposal of MMS 28.5 -
Other - 0.1
Total specific adjusting items from discontinuing operations before income tax 27.6 (0.6)
Income tax credit from specific adjusting items (7.7) 0.2
Total specific adjusting items from discontinuing operations after income tax 19.9 (0.4)
1 Details of specific adjusting items arising during the year and the
comparative period are given in note 4 to the condensed consolidated financial
statements.
Gain on disposal of MMS
During the year the Group announced the sale of its MMS business to Vesuvius
plc. MMS was previously reported within the Thermal Products reporting
segment. The business represents a major line of business and therefore
meets the criteria of a disposal group under IFRS 5. The results of MMS for
the year ended 31 December 2024 and the period up to the completion of the
transaction on 12 November 2025 are presented as discontinued operations in
the Group's audited financial statements.
MMS was sold for total consideration of £76.2 million. The transaction was
structured as an acquisition of Morgan's 75% shareholding in its Indian listed
subsidiary, Morganite Crucible (India) Limited ('MCIL'), by Vesuvius' Indian
listed subsidiary, Foseco India Ltd ('FIL'), with consideration for the
acquisition being the issuance of new FIL shares to Morgan, plus a cash
acquisition for the remainder of the MMS business ('Rest of World').
At completion, Morgan received 1.2 million consideration shares in FIL, which
represents a circa 15% shareholding in FIL valued at approximately £55.7
million. These shares are subject to a six-month lock-up period post-initial
listing, in accordance with applicable Indian regulations.
In addition, Morgan received £20.5 million in cash as gross consideration for
the Rest of World Transaction, which was subject to customary post-completion
cash, debt and working capital adjustments and prior to any taxes, fees and
other expenses related to the overall MMS transaction.
The calculation of the gain on disposal of MMS is presented in the table
below. The gain on disposal has been included in 'specific adjusting items'
within discontinued operations in the consolidated income statement.
It is our intention to sell the consideration shares and therefore they have
been designated as held for trading and are recognised at fair value through
profit and loss and revalued at the balance sheet date by reference to the
publicly listed share price. Movements in share price and associated foreign
exchange movements are recognised in specific adjusting items due to their
nature and size. In accordance with applicable accounting standards, the
fair value movement in the consideration shares held is recognised within
continuing operations as it relates to an asset held by the continuing
business.
£m
Share consideration 55.7
Cash consideration 20.5
Total consideration 76.2
Goodwill and other intangibles (8.8)
Other non-current assets (21.6)
Current assets (18.7)
Liabilities 10.6
Net assets disposed (38.5)
Transaction costs (7.0)
Cumulative foreign exchange (5.1)
Non-controlling interest 2.9
Pre-tax gain on disposal 28.5
Statutory operating profit
Statutory operating profit from continuing operations was £45.2 million (2024
restated: £99.2 million), a significant reduction compared to the prior year
driven by reduced revenues and increased charges from specific adjusting items
as a result of our investment in the Global ERP programme, the fair value and
foreign exchange loss on consideration shares held following the disposal of
MMS, and the impairment of certain Semiconductor related assets.
Net financing costs
Net financing costs of £22.2 million (2024: £19.0 million) comprise net bank
interest and similar charges of £17.8 million (2024: £15.8 million),
interest payable on supplier finance arrangements of £1.2 million (2024:
£nil), net interest on IAS 19 pension obligations of £0.4 million (2024:
£0.6 million), and interest expense on lease liabilities of £2.8 million
(2024: £2.6 million) resulting from IFRS 16 Leases.
Net financing costs for 2026 are expected to be within the range of £22-26
million.
Taxation
The Group tax charge from continuing operations, excluding specific adjusting
items, was £19.4 million (2024: £27.0 million). The effective tax rate,
excluding specific adjusting items, was 27.5% (2024: 26.3%). Note 6 to the
condensed consolidated financial statements provides additional information on
the Group's tax charge.
On a statutory basis, the Group tax charge was £17.9 million (2024: £24.7
million), lower than the previous year due to lower taxable profits.
We expect our effective tax rate, excluding specific adjusting items, to be
within the 27-28% range in 2026.
Tax risks
The Group follows a Tax Policy to fulfil local and international tax
requirements, maintaining accurate and timely tax compliance whilst seeking to
maximise long-term shareholder value. The Group adopts an open and transparent
approach to relationships with tax authorities and continues to monitor and
adopt new reporting requirements, for example those arising from the
implementation of the OECD Base Erosion and Profit Shifting proposals within
tax legislation across various jurisdictions.
The tax strategy is aligned to the Group's business strategy and ensures that
tax affairs have strong commercial substance. Tax risks are set out in the
'Risk Management' section in the Annual Report and Accounts.
Earnings per share
Basic earnings per share from continuing operations was a loss of 1.0 pence
per share (2024: 16.5 pence) and adjusted earnings per share* was 15.9 pence
(2024: 24.2 pence).
Basic earnings per share from continuing operations was impacted by overall
trading performance and increased charges from specific adjusting items, as
noted above.
See note 8 to the condensed consolidated financial statements.
Foreign currency impact
The Group receives revenue and incurs expenses in a number of foreign
currencies and, as such, movements in foreign exchange rates can materially
impact the Group's financial results.
For illustrative purposes, the table below provides details of the impact on
2025 revenue and Group adjusted operating profit* if the actual reported
results, calculated using 2025 average exchange rates were restated for GBP
weakening by 10 cents against the US dollar in isolation and 10 cents against
the Euro in isolation:
Increase in 2025 revenue/adjusted operating profit(1) if: Revenue Adjusted operating profit(1)
£m
£m
GBP weakens by 10c against the US Dollar in isolation 39.0 3.8
GBP weakens by 10c against the Euro in isolation 17.8 2.5
1 Definitions of these non-GAAP measures and reconciliations to the equivalent
statutory measure can be found in the 'Glossary and Alternative Performance
Metrics' section at the end of this announcement.
The principal exchange rates used in the translation of the results of
overseas subsidiaries were as follows:
GBP to: 2025 2024
Closing rate Average rate Closing rate Average rate
US Dollar 1.35 1.32 1.25 1.28
Euro 1.15 1.17 1.21 1.18
Cash flow
2025 Restated
£m
2024
£m
Adjusted operating profit from continuing operations 93.8 123.3
Adjusted operating profit from discontinued operations 5.3 5.1
Headline adjusted operating profit 99.1 128.4
Adjusted for:
Depreciation 42.0 42.7
'Specific adjusting items' cash outflows (22.8) (20.4)
Loss/(Profit) on sale of PPE 0.5 (3.0)
Equity-settled share-based payments 2.0 2.8
Net working capital movements 50.4 14.6
Other items (2.6) (2.1)
Cash generated from operations 168.6 163.0
Net capital expenditure (65.9) (90.2)
Net interest on cash and borrowings (18.8) (15.3)
Tax paid (26.4) (29.2)
Lease payments and interest (12.1) (13.2)
Free cash flow before acquisitions, disposals and dividends(1) 45.4 15.1
Dividends paid to external shareholders (34.1) (34.5)
Net cash flows from other investing and financing activities (23.9) (19.6)
MMS cash proceeds, net of tax paid 10.0 -
Exchange movement and other non-cash movements (3.4) (2.0)
Movement in net debt(1) (6.0) (41.0)
Opening net debt(1) (226.2) (185.2)
Closing net debt(1) (232.2) (226.2)
Lease liabilities (49.2) (47.1)
Closing net debt(1) and lease liabilities (281.4) (273.3)
1 Definitions of these non-GAAP measures and reconciliations to the equivalent
statutory measure can be found in the 'Glossary and Alternative Performance
Metrics' section at the end of this announcement.
The Group generated cash from operations of £168.6 million (2024: £163.0
million) which was £5.6 million higher than the previous year, with lower
headline adjusted operating profit* materially offset by a continued focus on
working capital management as a result of focused initiatives across the
Group. Working capital initiatives included the initiation of a focused
Supplier Financing arrangement for those areas of the business where supplier
terms are materially below standard industry levels and an extension of our
non-recourse debt factoring programme. These initiatives improve the Group's
diversification and cost of liquidity, and the total benefit from these
arrangements as at 31 December 2025 was £37.2 million.
Free cash flow before acquisitions, disposals and dividends* was £45.4
million (2024: £15.1 million). The increase in free cashflow was driven by
a significant reduction in capital expenditure compared to the prior year
following the reduction of the scope of our investment in Semiconductor
capacity.
For the purposes of compliance with external debt covenants, net debt* is
calculated excluding IFRS 16 lease liabilities. On this basis, net debt* was
£232.2 million (2024: £226.2million), representing a net debt* to continuing
operations EBITDA* ratio of 1.9 times (2024: 1.5 times). On a headline
basis, which includes the profits earned from MMS up to the date of disposal,
net debt* to headline EBITDA ratio was 1.8 times (2024: 1.4 times). The
Group has yet to receive the majority of the consideration associated with the
sale of MMS and the value of these consideration shares was £47.2 million at
the balance sheet date. Leverage on a continuing basis will begin to return
towards our target range during 2026 upon realisation of these proceeds. We
expect leverage to be at or around 1.7x by the end of 2026.
Commitments for property, plant and equipment and computer software for which
no provision has been made amount to £1.8 million. Treasury and risk
management policies, which remain unchanged from the prior year, are set out
in the Annual Report and Accounts.
Liquidity
At the balance sheet date, the Group had net cash and cash equivalents* of
£74.2 million (2024: £111.5 million) and undrawn headroom on its revolving
credit facility of £295.3 million (2024: £279.3 million).
Capital structure
At the year end total equity was £348.9 million (2024: £389.3 million) with
closing net debt* of £232.2 million (2024: £226.2 million). Non-current
assets were £568.5 million (2024: £579.3 million) and total assets were
£984.8 million (2024: £1,077.1 million).
Final dividend
The Board is recommending a final dividend, subject to shareholder approval,
of 6.8 pence per share on the Ordinary share capital of the Group, payable on
12 May 2026 to Ordinary shareholders on the register at the close of business
on 10 April 2026. The ex-dividend date is 9 April 2026.
Together with the interim dividend of 5.4 pence per share paid on 17 November
2025, this final dividend, if approved by shareholders, brings the total
distribution for the year to 12.2 pence per share (2024: 12.2 pence).
A total dividend of 12.2 pence per share represents a dividend cover of
adjusted EPS* of 1.3 times. The Board has committed to maintaining then
growing the Ordinary dividend with adjusted earnings cover of circa 2.5 times.
Note 14 to the Company financial statements included within the 2025 Annual
Report and Accounts provides additional information on the Company's
distributable reserves.
Share buyback
On 5 November 2024, the Group announced its intention to undertake a buyback
programme of up to a maximum £40 million, excluding expenses. In December
2025, we announced our intention to pause the buyback programme after the
second £10 million tranche had been completed in order to support our focus
on balance sheet resilience.
As at 31 December 2025, the Group had purchased 8,576,587 shares, for total
consideration of £19.9 million including fees and stamp duty. The second
tranche completed in January 2026.
Post balance sheet events
There were no reportable post balance sheet events following the balance sheet
date.
We note the emerging situation in the Middle East. Whilst the Group has a
small footprint in the region, with a relatively low profit exposure we are
mindful that the situation could have an impact on broader trade and cost
inflation. It is too early to assess the potential impact for 2026 and our
primary focus is the safety of our employees.
Group principal risks and uncertainties
The Board considers that risk management and internal control are fundamental
to achieving the Group's strategic objectives. Principal and emerging risks
are identified both 'top-down' by the Board and the Executive Committee and
'bottom-up' through the divisions and central functions. Senior executives are
responsible for the strategic management of the Group's principal and emerging
risks, including related policy, guidelines and processes, subject to Board
oversight.
Not all the risks identified as part of our risk management processes are
considered principal risks. Principal risks are individual risks, or a
combination of risks, which could result in circumstances that might threaten
the Group's reputation or business model, its future performance, solvency or
liquidity. As with all businesses operating in a dynamic environment, some
risks may not yet be known, whilst other low-level risks could become material
in the future.
The Board has ultimate responsibility for the Group's systems of risk
management and internal control and ensures the Group's risk processes and
systems of internal control are robust, monitored and evolve to address
changing business conditions and threats. Principal and emerging risks are
formally reviewed throughout the year by the Board and the Audit Committee.
Risk appetite is discussed and threshold for principal risks are agreed.
The overall system of risk management is reviewed by the Audit Committee on
behalf of the Board.
Emerging risks
Emerging risks are 'new' risks that have the potential to crystallise in the
future, but are unlikely to impact the Group during the next year. The
potential future impact of such risks is often uncertain. They may begin to
evolve rapidly or simply not materialise.
Key emerging risk
Generative artificial intelligence: The Group is monitoring developments in
regulatory requirements of generative artificial intelligence, its potential
wider impacts on our business model and strategy as well as evaluating
appropriate mitigating measures.
2025 risk and control assessments
During 2025, the Board undertook a comprehensive review of the Group's overall
risk profile, which involved detailed discussion of risk assessment outputs
provided by the divisions and central functions. This included deep dives into
principal risks and horizon scanning, identifying emerging risk themes. The
Board actively engaged in discussions on risk trends and mitigation
strategies, ensuring alignment with the Group's strategic objectives for 2025
and beyond.
Members of the Board, Audit and Executive Committee received regular updates
on the Group's principal risks and the steps taken to mitigate any potential
impacts throughout the year, supplemented by thematic reviews and assurance
reports from internal and external sources.
Principal risks
The principal risks and uncertainties outlined in the strategic report of the
2025 Annual report and Accounts set out a description of the Group's principal
risks and related mitigation measures, as agreed by the Board, and describe
how these principal risks may affect Morgan Advanced Material's ability to
deliver its strategy.
The identified principal risks relate to: • External environment; •
Business change and development; • Business continuity; • Environment,
health & safety; • IT infrastructure and security; • Legal and
regulatory; and • Key financial processes.
Going concern
The Group meets its day-to-day working capital requirements through local
banking arrangements underpinned by the Group's £230 million unsecured
multi-currency revolving credit facility, which matures in November 2029. As
at 31 December 2025, the Group had significant available liquidity and
headroom on its covenants. Total committed borrowing facilities were £601.7
million. The amount drawn under these facilities was £306.4 million, which
together with net cash and cash equivalents of £74.2 million, gave a total
headroom of £369.5 million. The multi-currency revolving credit facility was
undrawn. The €150 million delayed draw Term Loan was €75 million drawn.
The Group has scheduled debt maturities of $97 million and €25 million due
in October 2026 and it expects to repay these facilities using existing
facilities.
The principal borrowing facilities are subject to covenants that are measured
bi-annually in June and December, being net debt* to EBITDA* of a maximum of 3
times and interest cover of a minimum of 4 times, based on measures defined in
the facilities agreements which are adjusted from the equivalent IFRS amounts.
The Group has carefully modelled its cash flow outlook, taking account of
reasonably possible changes in trading performance, exchange rates and
plausible downside scenarios. This review indicated that there was sufficient
headroom and liquidity for the business to continue for the 18-month period
based on the facilities available as discussed in note 1 to the condensed
consolidated financial statements. The Group was also expected to be in
compliance with the required covenants discussed above.
After making enquiries, and in the absence of any material uncertainties, the
Directors have a reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for a period of 18
months from the date of signing this Annual Report and Accounts. Accordingly,
they continue to adopt the going concern basis in preparing the Annual Report
and Accounts.
Further information is provided in note 1 to the Condensed consolidated
Financial Statements under the heading 'Going concern'.
Directors' responsibilities statement
The responsibility statement below has been prepared in connection with the
Group's full Annual Report and Accounts for the year to 31 December 2025.
Certain parts thereof are not included within these Results.
Each of the Directors, whose names and functions are included in the Annual
Report and Accounts 2025 confirm that, to the best of their knowledge:
· the financial statements, prepared in accordance with the relevant financial
reporting framework, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the company and the undertakings
included in the consolidation taken as a whole;
· the strategic report includes a fair review of the development and performance
of the business and the position of the company and the undertakings included
in the consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face; and
· the annual report and financial statements, taken as a whole, are fair,
balanced and understandable and provide the information necessary for
shareholders to assess the company's position and performance, business model
and strategy.
This responsibility statement was approved by the Board of Directors on 2
March 2026.
By order of the Board,
Director Director
D. Caby R. Armitage
Audited financial information
The condensed consolidated financial statements and notes 1 to 17 for the year
ended 31 December 2025 included below are derived from the Group's
consolidated financial statements which have been audited by Deloitte LLP. The
unmodified audit report is available for inspection at the Group's registered
office.
Consolidated income statement
Year ended 31 December 2025 Year ended 31 December 2024
Results before specific adjusting items Specific adjusting items(2) Total Restated results before specific adjusting items(1) Restated specific adjusting items(2) Total(1)
Note £m £m £m £m £m £m
Revenue 3 996.6 - 996.6 1,060.1 - 1,060.1
Operating costs before amortisation of intangible assets, impairments and (902.8) (32.0) (934.8) (936.8) (18.2) (955.0)
reversal of impairments of non-financial assets
Profit from operations before amortisation of intangible assets, impairments 3 93.8 (32.0) 61.8 123.3 (18.2) 105.1
and reversal of impairments of non-financial assets
Amortisation of intangible assets (1.0) - (1.0) (1.7) - (1.7)
Impairment of non-financial assets 4 - (15.6) (15.6) - (4.2) (4.2)
Reversal of impairments of non-financial assets 4 - - - - - -
Operating profit 3 92.8 (47.6) 45.2 121.6 (22.4) 99.2
Finance income 2.9 - 2.9 2.6 - 2.6
Finance expense (25.1) - (25.1) (21.6) - (21.6)
Net financing costs 5 (22.2) - (22.2) (19.0) - (19.0)
Profit before taxation 70.6 (47.6) 23.0 102.6 (22.4) 80.2
Income tax expense 6 (19.4) 1.5 (17.9) (27.0) 2.3 (24.7)
Profit from continuing operations 51.2 (46.1) 5.1 75.6 (20.1) 55.5
Profit from discontinued operations 7 3.8 19.9 23.7 3.7 (0.4) 3.3
Profit for the year 55.0 (26.2) 28.8 79.3 (20.5) 58.8
Profit for the year attributable to:
Shareholders of the Company 47.3 (26.2) 21.1 70.8 (20.5) 50.3
Non-controlling interests 7.7 - 7.7 8.5 - 8.5
Profit for the year 55.0 (26.2) 28.8 79.3 (20.5) 58.8
Earnings per share 8
Continuing and discontinued operations
Basic earnings per share 7.5p 17.7p
Diluted earnings per share 7.5p 17.5p
Continuing operations
Basic earnings per share (1.0)p 16.5p
Diluted earnings per share (0.9)p 16.4p
Dividends(3)
Interim dividend - pence 5.4p 5.4p
15.0 15.4
- £m
Proposed final dividend - pence 6.8p 6.8p
18.8 19.3
- £m
1. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
2. Details of specific adjusting items are given in Note 4 to the condensed
consolidated financial statements.
3. The proposed final dividend is based upon the number of Ordinary shares
outstanding at the balance sheet date.
Consolidated statement of comprehensive income
Year ended 31 December 2025 Restated Year ended 31 December 2024(1)
Note £m £m
Profit for the year 28.8 58.8
Other comprehensive expense:
Items that will not be reclassified subsequently to income statement:
Remeasurement (loss)/gain on defined benefit plans 15 (0.1) 1.3
Tax effect of components of other comprehensive income not reclassified 6 (0.1) (0.6)
(0.2) 0.7
Items that may be reclassified subsequently to income statement:
Foreign exchange translation differences (23.2) (11.0)
Cash flow hedges:
Change in fair value 0.4 (0.3)
Transferred to income statement 0.4 (1.0)
Net investment hedges:
Change in fair value 2.9 1.7
(19.5) (10.6)
Total other comprehensive expense (19.7) (9.9)
Total comprehensive income 9.1 48.9
Attributable to:
Shareholders of the Company 3.5 41.4
Non-controlling interests 5.6 7.5
9.1 48.9
Total comprehensive income attributable to shareholders of the Company arising
from:
Continuing operations (19.7) 38.5
Discontinued operations 23.2 2.9
3.5 41.4
1. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
Consolidated balance sheet
Note As at As at
31 December 2025 31 December
£m
2024
£m
Assets
Property, plant and equipment 9 326.0 344.9
Right-of-use assets 10 36.4 32.5
Intangible assets: goodwill 11 163.7 176.9
Intangible assets: other 11 3.2 3.0
Investments 12 0.5 2.0
Trade and other receivables 3.1 3.6
Employee benefits: pensions 15 12.4 13.0
Deferred tax assets 23.2 21.4
Total non-current assets 568.5 597.3
Inventories 146.5 165.9
Derivative financial assets 14 2.0 1.2
Trade and other receivables 139.1 189.6
Investments 12 47.2 -
Current tax receivable 2.2 2.3
Cash and cash equivalents 13 79.3 120.8
Total current assets 416.3 479.8
Total assets 984.8 1,077.1
Liabilities
Borrowings 212.1 337.7
Lease liabilities 38.1 36.1
Employee benefits: pensions 15 34.4 34.5
Provisions 16 9.9 10.9
Non-trade payables 2.7 2.8
Deferred tax liabilities 1.0 2.7
Total non-current liabilities 298.2 424.7
Borrowings and bank overdrafts 99.4 9.3
Lease liabilities 11.1 11.0
Trade and other payables 194.6 204.1
Current tax payable 24.0 26.6
Provisions 16 8.1 9.5
Derivative financial liabilities 14 0.5 2.6
Total current liabilities 337.7 263.1
Total liabilities 635.9 687.8
Total net assets 348.9 389.3
Equity
Share capital 69.2 70.9
Share premium 111.7 111.7
Reserves (13.7) (8.2)
Retained earnings 149.4 179.3
Total equity attributable to shareholders of the Company 316.6 353.7
Non-controlling interests 32.3 35.6
Total equity 348.9 389.3
Consolidated statement of changes in equity
Share capital Share premium Translation Hedging Fair value reserve Capital redemption reserve Other reserves Retained earnings Total parent equity Non-controlling interests Total
£m
£m
£m
£m
£m
£m
£m
£m
Reserve Reserve Equity
£m
£m
£m
At 1 January 2024 71.3 111.7 (29.9) 1.1 (1.0) 35.7 0.6 170.8 360.3 38.3 398.6
Profit for the year - - - - - - - 50.3 50.3 8.5 58.8
Other comprehensive income/(expense):
Remeasurement gain on defined benefit plans and related taxes - - - - - - - 0.7 0.7 - 0.7
Foreign exchange differences and related taxes - - (10.0) - - - - - (10.0) (1.0) (11.0)
Cash flow hedging fair value changes and transfers - - - (1.3) - - - - (1.3) - (1.3)
Net investment hedging fair - - 1.7 - - - - - 1.7 - 1.7
value changes and transfers
Total other comprehensive income/(expense) - - (8.3) (1.3) - - - 0.7 (8.9) (1.0) (9.9)
Total comprehensive income/(expense) - - (8.3) (1.3) - - - 51.0 41.4 7.5 48.9
Transactions with owners:
Dividends - - - - - - - (34.5) (34.5) (8.1) (42.6)
Equity-settled share-based payments - - - - - - - 2.8 2.8 - 2.8
Own shares acquired for share incentive schemes (net) - - - - - - - (3.3) (3.3) - (3.3)
Purchase of own shares for share buyback programme - - - - - - (10.0) - (10.0) - (10.0)
Cancellation of own shares under share buyback programme (0.4) - - - - 0.4 4.5 (4.5) - - -
Purchase of non-controlling interest - - - - - - - (3.0) (3.0) (2.1) (5.1)
At 31 December 2024 70.9 111.7 (38.2) (0.2) (1.0) 36.1 (4.9) 179.3 353.7 35.6 389.3
Profit for the year - - - - - - - 21.1 21.1 7.7 28.8
Other comprehensive income/(expense):
Remeasurement loss on defined benefit plans and related taxes - - - - - - - (0.2) (0.2) - (0.2)
Foreign exchange differences and related taxes - - (21.1) - - - - - (21.1) (2.1) (23.2)
Cash flow hedging fair value changes and transfers - - - 0.8 - - - - 0.8 - 0.8
Net investment hedging fair - - 2.9 - - - - - 2.9 - 2.9
value changes and transfers
Total other comprehensive income/(expense) - - (18.2) 0.8 - - - (0.2) (17.6) (2.1) (19.7)
Total comprehensive income/(expense) - - (18.2) 0.8 - - - 20.9 3.5 5.6 9.1
Transactions with owners:
Dividends - - - - - - - (34.1) (34.1) (6.0) (40.1)
Equity-settled share-based payments - - - - - - - 1.9 1.9 - 1.9
Own shares acquired for share incentive schemes (net) - - - - - - - (3.5) (3.5) - (3.5)
Purchase of own shares for share buyback programme - - - - - - (10.0) - (10.0) - (10.0)
Cancellation of own shares under share buyback programme (1.7) - - - - 1.7 15.1 (15.1) - - -
Reclassification to income statement on disposal of business - - 5.1 - - - - - 5.1 (2.9) 2.2
At 31 December 2025 69.2 111.7 (51.3) 0.6 (1.0) 37.8 0.2 149.4 316.6 32.3 348.9
Consolidated statement of cash flows
Note Year ended 31 December 2025 Restated(1)
£m
Year ended 31 December 2024
£m
Operating activities
Profit for the year from continuing operations 5.1 55.5
Profit for the year from discontinued operations 7 23.7 3.3
Adjustments for:
Depreciation - property, plant and equipment 33.6 34.1
Depreciation - right-of-use assets 8.4 8.6
Amortisation 1.0 1.7
Net financing costs 5 22.2 19.0
Profit on disposal of business (28.5) -
Non-cash specific adjusting items included in operating profit 18.4 4.5
Fair value loss/(gain) on equity instruments held at FVTPL 7.3 (1.9)
Loss/(profit) on sale of property, plant and equipment 0.5 (3.0)
Income tax expense 6,7 27.1 25.9
Equity-settled share-based payment expense 2.0 2.8
Cash generated from operations before changes in working capital and 120.8 150.5
provisions
Decrease/(increase) in trade and other receivables 34.2 (0.5)
Decrease in inventories 6.0 6.7
Increase in trade and other payables 10.2 8.4
Decrease in provisions (2.0) (1.0)
Payments to defined benefit pension plans (net of IAS 19 pension charges) 15 (0.6) (1.1)
Cash generated from operations 168.6 163.0
Interest paid - borrowings and overdrafts (21.6) (17.9)
Interest paid - lease liabilities (2.8) (2.6)
Income tax paid (26.4) (29.2)
Net cash from operating activities 117.8 113.3
Investing activities
Purchase of property, plant and equipment and software (67.1) (96.1)
Purchase of investments (0.4) (0.1)
Proceeds from sale of property, plant and equipment 1.0 5.4
Grants received for purchase of equipment 0.2 0.5
Interest received 2.8 2.6
Disposal of investments 1.3 1.7
Disposal of business 17.4 -
Tax paid on disposal of business (7.4) -
Net cash from investing activities (52.2) (86.0)
Financing activities
Purchase of own shares for share incentive schemes (3.6) (3.5)
Proceeds from exercise of share options - 0.2
Purchase of own shares for share buyback programme (15.2) (4.7)
Purchase of non-controlling interest - (5.1)
Increase in borrowings 38.8 121.3
Repayment of borrowings (70.1) (88.0)
Payment of lease liabilities (9.3) (10.6)
Dividends paid to shareholders of the Company (34.1) (34.5)
Dividends paid to non-controlling interests (6.0) (8.1)
Net cash from financing activities (99.5) (33.0)
Net decrease in cash and cash equivalents and overdrafts (33.9) (5.7)
Cash and cash equivalents at start of the year 111.5 124.5
Effect of exchange rate fluctuations on cash held (3.4) (7.3)
Net cash and cash equivalents at year end 74.2 111.5
1. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
Notes to the condensed consolidated financial statements
Note 1. Basis of preparation, changes in accounting policies and areas of
significant judgement and estimate
These condensed consolidated financial statements do not constitute statutory
accounts as defined by Section 434 of the Companies Act 2006 but have been
extracted from the audited Group financial statements for the year ended 31
December 2025. The Group financial results for the year ended 31 December 2025
have been audited and will be delivered to the Registrar of Companies in
accordance with Section 441 of the Companies Act.
The Group financial statements are prepared in accordance with the Companies
Act 2006 and International Financial Reporting Standards ('IFRS') as adopted
by the UK. The financial statements are prepared on a going concern basis
using the historical cost, modified for the revaluation of certain financial
assets and financial liabilities (including derivatives). The accounting
policies in the Group financial statements have been applied consistently to
these condensed consolidated financial statements.
Critical accounting judgements and key sources of estimation uncertainty
In preparing these consolidated financial statements, management has made
judgements, estimates and assumptions that affect the application of the
Group's accounting policies and the reported amounts of assets, liabilities,
income and expenses. Final outcomes may differ from these estimates. Estimates
and underlying assumptions are reviewed on an ongoing basis.
Critical accounting judgements
Information about judgements made in applying accounting policies that have
the most significant effects on the amounts recognised in the consolidated
financial statements is included in the following Notes:
Note 4: Specific adjusting items
The Group separately presents specific adjusting items in the consolidated
income statement which, in the Directors' judgement, need to be disclosed
separately by virtue of their size and incidence in order for users of the
consolidated financial statements to obtain an alternative understanding of
the financial information and the underlying performance of the business.
These are items which occur infrequently and include (but are not limited to):
· Individual restructuring projects which are material or relate to the closure
of a part of the business and are not expected to recur;
· Impairment of non-financial assets which are material;
· Gains or losses on disposal or exit of businesses;
· Significant costs incurred as part of the integration of an acquired business;
· Gains or losses arising on significant changes to or closures of defined
benefit pension plans;
· Expenses related to the design, configuration, customisation and
implementation of a Global ERP system; and
· Changes in the fair value and associated foreign exchange on shares in Foseco
India Ltd ('FIL').
Determining whether an item is part of specific adjusting items requires
judgement to determine the nature and the intention of the transaction.
Note 16: Provisions and contingent liabilities
Due to the nature of its operations, the Group holds provisions for its
environmental obligations. Judgement is needed in determining whether a
contingent liability has crystallised into a provision. Management assesses
whether there is sufficient information to determine that an environmental
liability exists and whether it is possible to estimate with sufficient
reliability what the cost of remediation is likely to be. For environmental
remediation matters, this tends to be at the point in time when a remediation
feasibility study has been completed, or sufficient information becomes
available through the study to estimate the costs of remediation.
The Group will recognise a legal provision at the point when the outcome of a
legal matter can be reliably estimated. Estimates are based on past experience
of similar issues, professional advice received and the Group's assessment of
the most likely outcome. The timing of the utilisation of these provisions is
frequently uncertain, reflecting the complexity of issues and the outcome of
various court proceedings and associated negotiations.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation
uncertainty at the reporting period that may have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are included in the Notes below.
Note 15: Pensions and other post-retirement employee benefits: key actuarial
assumptions
The principal actuarial assumptions applied to pensions are shown in Note 15.
The actuarial evaluation of pension assets and liabilities is based on
assumptions in respect of inflation, future salary increases, discount rates,
returns on investments and mortality rates. Relatively small changes in the
assumptions underlying the actuarial valuations of pension schemes can have a
significant impact on the net pension liability included in the balance sheet.
Climate change-related risks and opportunities
Management has assessed the potential financial impacts relating to climate
change-related risks, primarily considering the useful lives of property,
plant and equipment, the possibility of impairment of goodwill and other
long-lived assets and the recoverability of the Group's deferred tax assets.
Management has exercised judgement in concluding that there are no further
material financial impacts of the Group's climate-related risks and
opportunities on the consolidated financial statements. These judgements are
kept under review by management as the future impacts of climate change depend
on environmental, regulatory and other factors outside of the Group's control
which are not all currently known.
Adoption of new and revised accounting standards
Newly adopted standards
The Group has reviewed amendments to IFRS Accounting Standards as adopted by
the UK that are mandatorily effective for an accounting period that begins on
or after 1 January 2025. The Amendments to 'IAS 21 - The Effects of Changes in
Foreign Exchange Rates' Lack of Exchangeability was effective on 1 January
2025 and its adoption has not had any material impact on the disclosures or on
the amounts reported in these financial statements.
Accounting developments and changes
New accounting standards in issue but not yet effective
New standards and interpretations that are in issue but not yet effective are
listed below.
· Amendment to IFRS 9 - Financial Instruments and IFRS 7 - Financial
Instruments: Disclosures' Classification and Measurement of Financial
Instruments.
· Amendment to IFRS 9 and IFRS 7 - Contracts Referencing Nature-dependent
Electricity.
· IFRS 18 - Presentation and Disclosure in Financial Statements.
IFRS 18 is effective for periods beginning on or after 1 January 2027 and
replaces IAS 1 Presentation of Financial Statements. The standard requires the
classification of income and expenditure in the income statement to be split
between operating, investing and financing, introduces disclosures around
management defined performance measures (MPMs) and aggregation and
disaggregation of other disclosure information. The impact of the standard on
the Group is currently being assessed and it is not yet practicable to
quantify the effect of IFRS 18 on these consolidated financial statements.
There are no other upcoming accounting standards or amendments that are
applicable to the Group.
Non-GAAP measures
Where non-GAAP measures have been referenced these have been identified by an
asterisk (*) where they appear in the text and by a footnote where they appear
in a table. Definitions of these non-GAAP measures and reconciliations to the
equivalent statutory measure can be found in the 'Glossary and Alternative
Performance Measures' section included as an appendix to the condensed
consolidated financial statements within this announcement.
Going concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Strategic
Report contained in the Annual Report and Accounts. The financial position of
the Group, its cash flows, liquidity position and borrowing facilities, are
described in the Financial Review. In addition, Note 22 to the consolidated
financial statements contained within the Annual Report and Accounts, includes
the Group's policies and processes for managing financial risk, details of its
financial instruments and hedging activities and details of its exposures to
credit risk and liquidity risk.
The Group meets its day-to-day working capital requirements through local
banking arrangements underpinned by the Group's £230 million unsecured
multi-currency revolving credit facility, which matures in November 2029. As
at 31 December 2025, the Group had both significant available liquidity and
headroom on its covenants. Total committed borrowing facilities were £601.7
million. The amount drawn under these facilities was £306.4 million, which
together with net cash and cash equivalents of £74.2 million, gave a total
headroom of £369.5 million. The multi-currency revolving credit facility was
undrawn and the €150 million delayed draw Term Loan was €75 million drawn.
The Group has scheduled debt maturities of $97 million and €25 million due
in October 2026. We expect to repay these facilities using existing
facilities.
The principal borrowing facilities are subject to covenants that are measured
semi-annually in June and December, being net debt to EBITDA* of a maximum of
3 times and interest cover of a minimum of 4 times, based on measures defined
in the facilities agreements which are adjusted from the equivalent IFRS
amounts.
The Group has modelled its cash flow outlook, taking account of reasonably
possible changes in trading performance, exchange rates and plausible downside
scenarios. This review indicated that there was sufficient headroom and
liquidity for the business to continue for the 18 month period based on the
facilities available as discussed in Note 22 to the consolidated financial
statements included within the Annual Report and Accounts. The Group was also
expected to be in compliance with the required covenants discussed above.
The Board has also reviewed the Group's reverse stress testing performed to
demonstrate how much headroom is available on covenant levels in respect of
changes in net debt, EBITDA*, and underlying revenue. Based on this
assessment, a combined reduction in EBITDA* of 25% and an increase in net debt
of 30% would still allow the Group to operate within its financial covenants.
The Directors do not consider either of these scenarios to be plausible given
the diversity of the Group's end-markets and its broad manufacturing base.
The Board and Executive Committee have regular reporting and review processes
in place in order to closely monitor the ongoing operational and financial
performance of the Group. As part of the ongoing risk management process,
principal and emerging risks are identified and reviewed on a regular basis.
In addition, the Directors have assessed the risk of climate change and do not
consider that it will impact the Group's ability to operate as a going concern
for the period under consideration.
After making enquiries, and in the absence of any material uncertainties, the
Directors have a reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for a period of 18
months from the date of signing this Annual Report and Accounts. Accordingly,
they continue to adopt the going concern basis in preparing the Annual Report
and Accounts.
Directors' Responsibility Statement
The 2025 Annual Report and Accounts, which will be issued in March 2026,
contains a responsibility statement in compliance with DTR 4.1.12 of the
Listing Rules which sets out that as at the date of approval of the Annual
Report on 2 March 2026, the directors confirm to the best of their knowledge:
- the Group and unconsolidated Company financial statements,
prepared in accordance with the applicable set of accounting standards, give a
true and fair view of the assets, liabilities, financial position and profit
or loss of the Group and Company, and the undertakings included in the
consolidation taken as a whole; and
- the performance review contained in the Annual Report and
Accounts includes a fair review of the development and performance of the
business and the position of the Group and the undertakings including the
consolidation taken as a whole, together with a description of the principal
risks and uncertainties they face.
Note 2. Acquisitions and disposals
On 22 August 2025, the Group announced it had reached an agreement to sell its
MMS business to Vesuvius plc for total consideration of £76.2 million.
The transaction was structured as an acquisition of Morgan's 75% shareholding
in its Indian listed subsidiary, Morganite Crucible (India) Ltd, by Vesuvius'
Indian listed subsidiary, Foseco India Ltd ('FIL'), with consideration for the
acquisition being the issuance of new FIL shares to Morgan (the 'Indian
Transaction'), plus a cash acquisition of the remainder of the MMS business by
Vesuvius (the 'Rest of World Transaction'). The transaction completed on 12
November 2025.
As consideration for the Indian Transaction, Morgan received 1.2 million
shares in FIL, which represents a c. 15% shareholding in FIL valued at
approximately £55.7 million. Morgan's FIL shares are subject to a 6 month
lock-up period post completion, in accordance with applicable Indian
regulations. In addition, Morgan received £20.5 million in cash as gross
consideration for the Rest of World Transaction, which was subject to
customary post-completion cash, debt and working capital adjustments and prior
to any taxes, fees and other expenses related to the overall MMS transaction.
The MMS business disposed of formed part of the Thermal Products reporting
segment and represented a major line of business and therefore, in accordance
with IFRS 5, the Group's results have been restated to reflect MMS as a
discontinued operation. Refer to Note 7 for further information.
The calculation of the gain on disposal of MMS is presented in the table
below. The gain on disposal has been included in discontinued operations in
the consolidated income statement.
£m
Share consideration 55.7
Cash consideration 20.5
Total consideration 76.2
Goodwill and other intangibles (8.8)
Other non-current assets (21.6)
Current assets (18.7)
Liabilities 10.6
Net assets disposed (38.5)
Transaction costs (7.0)
Cumulative foreign exchange (5.1)
Non-controlling interest 2.9
Pre-tax gain on disposal 28.5
In March 2024 the Group acquired the remaining 7% of the shares in Morgan
Korea Company Ltd, a manufacturing business which services all three segments
of the Group, for consideration of £5.1 million. The Group had previously
owned 93% of the business and included the entity in the Group consolidation.
Note 3. Segmental reporting
The Group is managed through three distinct reporting segments, Thermal
Products, Performance Carbon and Technical Ceramics. Internal management
information on the reporting segments is regularly reviewed by the Group's
Board of Directors (the Chief Operating Decision Maker) in order to allocate
resources and assess performance.
Segment results, assets and liabilities include items directly attributable to
a segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly investments and related income, borrowings
and related expenses, corporate assets and head office expenses, and income
tax assets and liabilities.
The information presented below represents the reporting segments of the
Group.
Year ended 31 December 2025
Continuing operations Thermal Products Performance Carbon Technical Ceramics Segment total Corporate costs Group
£m
£m
£m
£m
£m
£m
Revenue from external customers 348.2 306.8 341.6 996.6 - 996.6
Segment adjusted operating profit(1) 23.5 41.2 39.4 104.1 - 104.1
Corporate costs(2) (10.3) (10.3)
Group adjusted operating profit(1) 93.8
Amortisation of intangible assets (0.3) (0.2) (0.5) (1.0) - (1.0)
Operating profit before specific adjusting items 23.2 41.0 38.9 103.1 (10.3) 92.8
Specific adjusting items included in operating profit/(loss)(3) (5.9) (20.4) (1.0) (27.3) (20.3) (47.6)
Operating profit/(loss) 17.3 20.6 37.9 75.8 (30.6) 45.2
Finance income 2.9
Finance expense (25.1)
Profit before taxation 23.0
Segment assets 304.9 300.9 201.8 807.6 177.2 984.8
Segment liabilities 96.5 50.1 88.5 235.1 400.8 635.9
Segment capital expenditure 15.9 31.3 17.1 64.3 - 64.3
Segment depreciation - property, plant and equipment 11.3 11.7 8.8 31.8 - 31.8
Segment depreciation - right-of-use assets 3.3 1.7 3.3 8.3 - 8.3
Segment impairment of non-financial assets - 15.6 - 15.6 - 15.6
Segment reversal of impairment of non-financial assets - - - - - -
1. Definitions of these non-GAAP measures and reconciliations of the statutory
results to the adjusted measures can be found in the 'Glossary and alternative
performance measures' section, which is included as an appendix to the
condensed consolidated financial statements within this announcement.
2. Corporate costs consist of central head office costs and ERP costs.
3. Details of specific adjusting items from continuing operations are given in
Note 4 to the condensed consolidated financial statements.
Restated(4) year ended 31 December 2024
Continuing operations Thermal Products Performance Carbon Technical Ceramics Segment total Corporate costs Group
£m
£m
£m
£m
£m
£m
Revenue from external customers 377.6 345.2 337.3 1,060.1 - 1,060.1
Segment adjusted operating profit(1) 37.5 55.1 39.2 131.8 - 131.8
Corporate costs(2) (8.5) (8.5)
Group adjusted operating profit(1) 123.3
Amortisation of intangible assets (0.8) (0.3) (0.6) (1.7) - (1.7)
Operating profit before specific adjusting items 36.7 54.8 38.6 130.1 (8.5) 121.6
Specific adjusting items included in operating profit/(loss)(3) (7.4) (7.6) (0.7) (15.7) (6.7) (22.4)
Operating profit/(loss) 29.3 47.2 37.9 114.4 (15.2) 99.2
Finance income 2.6
Finance expense (21.6)
Profit before taxation 80.2
Segment assets 373.4 316.3 222.7 912.4 164.7 1,077.1
Segment liabilities 103.9 54.0 85.0 242.9 444.9 687.8
Segment capital expenditure 22.8 52.3 21.0 96.1 - 96.1
Segment depreciation - property, plant and equipment 12.7 10.9 8.6 32.2 - 32.2
Segment depreciation - right-of-use assets 3.5 1.5 3.3 8.3 - 8.3
Segment impairment of non-financial assets 4.2 - - 4.2 - 4.2
Segment reversal of impairment of non-financial assets - - - - - -
1. Definitions of these non-GAAP measures and reconciliations of the statutory
results to the adjusted measures can be found in the 'Glossary and alternative
performance measures' section, which is included as an appendix to the
condensed consolidated financial statements within this announcement.
2. Corporate costs consist of central head office costs.
3. Details of specific adjusting items from continuing operations are given in
Note 4 to the condensed consolidated financial statements.
4. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
Revenue from external customers and non-current assets by geography
Revenue from Non-current assets
external customers
(excluding pension and deferred tax assets)
Continuing operations 2025 Restated(1) 2025 2024
2024
£m
£m £m
£m
USA 421.4 447.5 262.2 263.9
China 84.8 95.5 35.5 44.6
Germany 67.2 79.8 42.4 42.3
UK (the Group's country of domicile) 42.7 42.7 97.9 110.1
Other Asia, Australasia, Middle East and Africa 171.0 175.3 44.3 55.5
Other Europe 156.7 157.3 35.3 33.1
Other North America 33.5 35.3 1.8 1.9
South America 19.3 26.7 13.5 11.5
996.6 1,060.1 532.9 562.9
1. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
Revenue from external customers is based on geographic location of the
end-customer. Segment assets are based on geographical location of the assets.
In the current and prior year no single customer represented more than 5% of
revenue.
Revenue from external customers by end-market
Continuing operations 2025 Restated(1)
2024
£m
£m
Industrial 394.5 419.1
Aerospace & Defence 213.5 200.4
Oil & Petrochemical 100.3 102.7
Healthcare 72.2 84.1
Energy 70.9 69.5
Semiconductors 69.8 105.7
Rail 41.0 39.7
Other 34.4 38.9
996.6 1,060.1
1. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
Intercompany sales to other segments
Thermal Products Performance Carbon Technical Ceramics Segment totals
Continuing operations 2025 2024 2025 2024 2025 2024 2025 2024
£m £m £m £m £m £m £m £m
Intercompany sales to other segments 1.7 1.7 0.5 0.5 0.3 0.5 2.5 2.7
Note 4. Specific adjusting items
Continuing operations 2025 Discontinued operations 2025 Total Continuing operations Restated(1) 2024 Discontinued operations Restated(1) 2024 Total
£m
£m
2025
£m
£m
Restated(1) 2024
£m
£m
Restructuring charge (13.4) (0.9) (14.3) (12.4) (0.7) (13.1)
Global ERP system (13.3) - (13.3) (5.2) - (5.2)
Credit in relation to the impact of Argentina's currency devaluation 1.9 - 1.9 0.5 - 0.5
Impairment of non-financial assets (15.6) - (15.6) (4.2) - (4.2)
Gain on disposal of MMS - 28.5 28.5 - - -
Movement in fair value of consideration shares held at FVTPL (7.2) - (7.2) - - -
Costs associated with cyber security incident - - - (1.1) - (1.1)
Other - - - - 0.1 0.1
Total specific adjusting items before income tax (47.6) 27.6 (20.0) (22.4) (0.6) (23.0)
Income tax (charge)/credit 1.5 (7.7) (6.2) 2.3 0.2 2.5
Total specific adjusting items after income tax (46.1) 19.9 (26.2) (20.1) (0.4) (20.5)
1. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
Restructuring charge
During the year the business continued its previously announced simplification
and restructuring programme. A total charge of £14.3 million (2024: £13.1
million) was recognised in relation to these programmes.
Design, configuration, customisation and implementation of a Global ERP system
During the year the Group continued development of its Global ERP and started
the implementation phase. The programme will create opportunities to align
business processes, strengthen information security and the control
environment. The costs of £13.3 million (2024: £5.2 million) associated with
the design, configuration, customisation and implementation of the system are
classified as specific adjusting items due to their nature and size.
Credit in relation to the impact of Argentina's currency devaluation
In December 2023, Argentina devalued its currency by more than 50% and
restrictions on imports limited the flow of raw materials to the site. As a
result the Group incurred a charge of £5.8 million in the year ended 31
December 2023, which consisted of £2.6 million for the impact of the currency
devaluation on the trading results of the Argentina business, impairment of
property, plant and equipment of £1.9 million and impairment of inventories
of £1.3 million.
During the year ended 31 December 2024 the business was able to sell
inventories which were previously impaired and as a result reversed impairment
of £0.5m. In the year ended 31 December 2025 the business continued to
perform well and economic changes in the country allowed the business to remit
a dividend. As a result of the strong performance and dividend payment, an
impairment charge of £1.9 million which related to property, plant and
equipment used in the manufacturing process was reversed in the year ended 31
December 2025.
Impairment of non-financial assets
Performance Carbon
During 2025, the Group has recognised an impairment charge of £15.6 million
related to certain assets at a UK site which are dedicated to the
Semiconductor market. Our current view of future demand indicates that these
assets will not be commissioned. Since this specialist machinery cannot be
redeployed to fulfil other demand in the near-term without further investment,
we have fully impaired the asset, in-line with the requirements of 'IAS 36 -
Impairment of assets'.
Thermal Products
In the prior year, in light of challenging trading conditions, the Group
recognised a net impairment charge of £4.2 million related to fixed assets
held by our Thermal Products business in Europe. The value-in-use calculation
used a pre-tax discount rate of 13.5-17.2% and a long-term growth rate of
1.1-1.7% to derive the terminal value.
Review of cumulative impairment of non-financial assets
Impairment charges of £28.6 million (2024: £18.9 million) for non-financial
assets which the business continues to use have been recorded during the
current and previous years. These impaired amounts could be reversed if the
related businesses were to outperform significantly against their budget. A
sensitivity analysis was carried out using reasonably possible changes to the
key assumptions in assessing the value in use of these non-financial assets.
This did not result in a material reversal of the impaired amounts.
Gain on disposal of MMS
During the year the Group disposed of its MMS business recognising a gain on
disposal of £28.5 million, classified as specific adjusting items due to its
nature and size. Refer to Note 2 for further information.
Movement in fair value of consideration shares held at FVTPL
Consideration for the disposal of MMS comprised cash and shares in FIL, a
business publicly listed in India. The shares are held for trading and
recognised at FVTPL and revalued at the balance sheet date. Changes in the
value of the shares and associated foreign exchange movements are recognised
in specific adjusting items due to their nature and size. Refer to Note 12 for
further information.
Costs associated with the cyber security incident
During the prior year the Group incurred a residual £1.1 million of
exceptional costs and charges in relation to the cyber security incident which
took place in January 2023.
Note 5. Finance income and expense
Continuing operations 2025 2024
£m
£m
Interest on bank balances and cash deposits 2.9 2.6
Finance income 2.9 2.6
Interest expense on borrowings and overdrafts (20.7) (18.4)
Interest expense on lease liabilities (2.8) (2.6)
Interest on supplier finance arrangements (1.2) -
Net interest on IAS 19 defined benefit pension obligations (0.4) (0.6)
Finance expense (25.1) (21.6)
Net financing costs (22.2) (19.0)
Note 6. Taxation
2025 Restated(1)
2024
Continuing operations £m
£m
Current tax
Current year 22.2 28.5
Current tax associated with Pillar Two income taxes 0.1 0.2
Adjustments for prior years (0.4) -
21.9 28.7
Deferred tax
Current year (2.6) (2.4)
Adjustments for prior years (1.4) (1.6)
(4.0) (4.0)
Total income tax expense recognised in the income statement 17.9 24.7
Recognised in other comprehensive income
Tax effect on components of other comprehensive income:
Deferred tax associated with defined benefit schemes 0.1 0.6
Total tax recognised in other comprehensive income 0.1 0.6
1. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
There was no deferred tax associated with share schemes recognised in other
comprehensive income (2024: none).
2025 2025 Restated(1) 2024
2024
Reconciliation of effective tax rate £m %
%
£m
Profit before tax from continuing operations 23.0 80.2
Income tax charge using the domestic corporation tax rate 5.8 25.0 20.0 25.0
Effect of different tax rates in other jurisdictions (0.4) (1.7) 0.3 0.4
Local taxes including withholding tax suffered 4.2 18.3 3.7 4.6
Permanent differences 2.4 10.4 (0.2) (0.2)
Movements related to unrecognised temporary differences 7.7 33.5 2.5 3.1
Adjustments in respect of prior years (1.8) (7.8) (1.6) (2.0)
Statutory effective rate of tax 17.9 77.7 24.7 30.9
1. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
The effective rate of tax before specific adjusting items is 27.5% (2024:
26.3%).
The Group operates in many jurisdictions around the world and is subject to
factors that may impact future tax charges, including the implementation of
the Organisation for Economic Co-operation and Development (OECD) BEPS
actions, changes in tax rates and legislation, the expiry of statutes of
limitation, and the resolution of tax audits and disputes.
For the year ended 31 December 2025, the Group has continued to assess the
impact of the OECD Pillar Two Global Anti-Base Erosion ("GloBE") Model Rules,
which introduce a 15% global minimum tax. In accordance with the IAS 12
amendments issued in 2023, the Group has applied the mandatory temporary
exception from recognising deferred tax assets and liabilities arising from
the potential future application of Pillar Two top-up tax. As a result, no
deferred taxes have been recognised in respect of GloBE-related temporary
differences.
The IAS 12 amendments require groups to disclose separately their current tax
expense related to Pillar Two taxes. A Pillar Two top up tax charge of £0.1
million has been recognised for the current year, reflecting the application
of enacted or substantively enacted legislation in the jurisdictions in which
the Group operates. Germany, Singapore, France, Mexico and the United Arab
Emirates have been identified as jurisdictions falling outside the
Transitional Country-by-Country Reporting (CbCR) Safe Harbour for this period.
The Group will continue to monitor legislative developments, the expiry of
transitional safe harbour reliefs, and the evolving geographic mix of profits,
and will maintain the temporary exception until it is withdrawn by the IASB.
Note 7. Discontinued operations
During the year the Group announced the disposal of its Molten Metal Systems
business, an operating segment included in the Thermal Products reporting
segment. The business represents a major line of business and therefore meets
the criteria of a disposal group under 'IFRS 5 Non-current Assets Held for
Sale and Discontinued Operations'. The results of MMS for the year ended 31
December 2024 and the period up to the completion of the transaction on 12
November 2025 have been presented as discontinued operations.
The Group received £0.3 million (2024: £0.1 million) cash related to the
final payment under a contract associated with a historical disposal in 2018
of its Composites and Defence Systems business. The balance had been fully
recognised as receivables in prior periods and therefore no amounts were
recognised in the income statement in the year.
The results from discontinued operations, which have been disclosed in the
consolidated income statement, are set out below:
Year ended 31 December 2025 Year ended 31 December 2024
Results before specific adjusting items Specific adjusting items Total Results before Specific adjusting Total
specific adjusting items
items
Note £m £m £m £m £m £m
Revenue 33.7 - 33.7 40.6 0.1 40.7
Operating costs (28.4) 27.6 (0.8) (35.5) (0.7) (36.2)
Profit before taxation 5.3 27.6 32.9 5.1 (0.6) 4.5
Income tax expense (1.5) (7.7) (9.2) (1.4) 0.2 (1.2)
Profit from discontinued operations 3.8 19.9 23.7 3.7 (0.4) 3.3
Basic earnings per share from discontinued operations 8 8.5p 1.2p
Diluted earnings per share from discontinued operations 8 8.4p 1.1p
Cash flows from discontinued operations are set out below:
Year ended Year ended
31 December 2025 31 December 2024
£m £m
Net cash generated in operating activities 5.7 7.8
Net cash generated from investing activities (2.5) (6.1)
Net cash flow used in financing activities (0.1) (0.4)
3.1 1.3
Note 8. Earnings per share
Year ended 31 December 2025 Year ended 31 December 2024
Earnings Basic earnings per share Diluted earnings per share Restated earnings(2) Restated basic Restated diluted earnings per share
£m
pence
pence
£m
pence
earnings per share
pence
Profit for the year attributable to shareholders of the Company 21.1 7.5p 7.5p 50.3 17.7p 17.5p
Profit from discontinued operations (23.7) (8.5)p (8.4)p (3.3) (1.2)p (1.1)p
Profit from continuing operations (2.6) (1.0)p (0.9)p 47.0 16.5p 16.4p
Specific adjusting items 47.6 17.0p 16.9p 22.4 7.9p 7.8p
Amortisation of intangible assets 1.0 0.4p 0.4p 1.7 0.6p 0.6p
Tax effect of the above(1) (1.5) (0.5)p (0.5)p (2.3) (0.8)p (0.8)p
Non-controlling interests' share of the above adjustments - - - - - -
Adjusted profit for the year from continuing operations as used in adjusted 44.5 15.9p 15.9p 68.8 24.2p 24.0p
earnings per share
1. The tax effect of the amortisation of intangible assets was £nil (2024:
£nil).
2. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
2025 2024
Number of shares (millions)
Weighted average number of Ordinary shares for the purposes of basic earnings 279.6 284.5
per share(1)
Effect of dilutive potential Ordinary shares:
Share options 1.3 2.8
Weighted average number of Ordinary shares for the purposes of diluted 280.9 287.3
earnings per share
1. The calculation of the weighted average number of shares excludes the
shares held by The Morgan General Employee Benefit Trust, on which the
dividends are waived.
Note 9. Property, plant and equipment
Plant, Total
£m
Land and equipment
Buildings and fixtures
£m
£m
Cost
Balance at 1 January 2024 216.1 777.4 993.5
Additions 13.2 81.1 94.3
Disposals (11.5) (35.0) (46.5)
Transfers between categories 0.8 (0.8) -
Effect of movement in foreign exchange (2.0) (4.8) (6.8)
Balance at 31 December 2024 216.6 817.9 1,034.5
Balance at 1 January 2025 216.6 817.9 1,034.5
Additions 3.5 61.6 65.1
Disposals (0.4) (19.5) (19.9)
Disposal of business (11.7) (36.4) (48.1)
Transfers between categories 7.2 (7.2) -
Effect of movement in foreign exchange (8.3) (31.3) (39.6)
Balance at 31 December 2025 206.9 785.1 992.0
Depreciation and impairment losses
Balance at 1 January 2024 119.0 580.7 699.7
Depreciation charge for the year 5.4 28.7 34.1
Impairment losses - 4.6 4.6
Disposals (10.3) (34.2) (44.5)
Transfers between categories (0.5) 0.5 -
Effect of movement in foreign exchange (0.4) (3.9) (4.3)
Balance at 31 December 2024 113.2 576.4 689.6
Balance at 1 January 2025 113.2 576.4 689.6
Depreciation charge for the year 5.3 28.3 33.6
Impairment losses 1.0 15.8 16.8
Impairment reversals (0.6) (1.6) (2.2)
Disposals (0.4) (18.0) (18.4)
Disposal of business (3.5) (24.0) (27.5)
Transfers between categories 1.0 (1.0) -
Effect of movement in foreign exchange (5.0) (20.9) (25.9)
Balance at 31 December 2025 111.0 555.0 666.0
Carrying amounts
At 1 January 2024 97.1 196.7 293.8
At 31 December 2024 103.4 241.5 344.9
At 31 December 2025 95.9 230.1 326.0
No assets were pledged as security for liabilities in the current or prior
year. The net book value includes assets under construction of £43.8 million
(2024: £51.0 million) comprising £2.8 million of land and buildings (2024:
£2.8 million) and £41.0 million of plant, equipment and fixtures (2024:
£48.2 million).
Commitments for property, plant and equipment and computer software
expenditure for which no provision has been made in these financial statements
amount to £1.8 million for the Group (2024: £13.8 million).
Note 10. Right-of-use assets
Plant, Total
£m
Land and and equipment
Buildings £m
£m
Cost
Balance at 1 January 2024 80.5 11.9 92.4
Additions 5.7 2.8 8.5
Disposals (5.4) (2.5) (7.9)
Remeasurements 2.4 - 2.4
Effect of movement in foreign exchange (1.0) (0.6) (1.6)
Balance at 31 December 2024 82.2 11.6 93.8
Balance at 1 January 2025 82.2 11.6 93.8
Additions 11.6 2.3 13.9
Disposals (2.5) (1.9) (4.4)
Disposal of business (0.1) (1.0) (1.1)
Remeasurements 0.2 (0.2) -
Effect of movement in foreign exchange (2.5) (0.1) (2.6)
Balance at 31 December 2025 88.9 10.7 99.6
Depreciation and impairment losses
Balance at 1 January 2024 55.3 5.5 60.8
Depreciation charge for the year 5.6 3.0 8.6
Impairment losses - 0.8 0.8
Disposals (5.4) (2.5) (7.9)
Effect of movement in foreign exchange (0.8) (0.2) (1.0)
Balance at 31 December 2024 54.7 6.6 61.3
Balance at 1 January 2025 54.7 6.6 61.3
Depreciation charge for the year 5.8 2.6 8.4
Disposals (2.0) (1.9) (3.9)
Disposal of business - (0.4) (0.4)
Effect of movement in foreign exchange (1.9) (0.3) (2.2)
Balance at 31 December 2025 56.6 6.6 63.2
Carrying amounts
At 1 January 2024 25.2 6.4 31.6
At 31 December 2024 27.5 5.0 32.5
At 31 December 2025 32.3 4.1 36.4
The weighted average lease term is 10.1 years (2024: 10.2 years) for land and
buildings and 3.7 years (2024: 1.9 years) for plant and equipment.
The Group recognised expense relating to short-term leases and leasing of
low-value assets of £0.4 million (2024: £0.5 million).
Note 11. Intangible assets
Goodwill Customer Technology Capitalised Computer Total
£m
£m
Relationships and development Software
£m
£m
trademarks costs
£m
£m
Cost
Balance at 1 January 2024 177.5 60.9 4.2 0.8 36.2 279.6
Additions (externally purchased) - - - - 0.3 0.3
Disposals - - - - (0.8) (0.8)
Effect of movement in foreign exchange (0.6) 0.9 (0.2) - 0.2 0.3
Balance at 31 December 2024 176.9 61.8 4.0 0.8 35.9 279.4
Balance at 1 January 2025 176.9 61.8 4.0 0.8 35.9 279.4
Additions (externally purchased) - - - - 0.5 0.5
Disposals - - - - (2.0) (2.0)
Disposal of business (8.8) (0.7) - - (1.1) (10.6)
Effect of movement in foreign exchange (4.4) (3.9) 0.5 (0.1) (1.1) (9.0)
Balance at 31 December 2025 163.7 57.2 4.5 0.7 32.2 258.3
Amortisation and impairment losses
Balance at 1 January 2024 - 59.8 3.2 0.8 33.6 97.4
Amortisation charge for the year - 0.3 0.2 - 1.2 1.7
Disposals - - - - (0.8) (0.8)
Effects of movement in foreign exchange - 0.9 (0.1) - 0.4 1.2
Balance at 31 December 2024 - 61.0 3.3 0.8 34.4 99.5
Balance at 1 January 2025 - 61.0 3.3 0.8 34.4 99.5
Amortisation charge for the year - 0.2 0.2 - 0.6 1.0
Impairment reversal - - - - (0.3) (0.3)
Disposals - - - - (2.0) (2.0)
Disposal of business - (0.7) - - (1.1) (1.8)
Effects of movement in foreign exchange - (4.0) 0.5 (0.1) (1.4) (5.0)
Balance at 31 December 2025 - 56.5 4.0 0.7 30.2 91.4
Carrying amounts
At 1 January 2024 177.5 1.1 1.0 - 2.6 182.2
At 31 December 2024 176.9 0.8 0.7 - 1.5 179.9
At 31 December 2025 163.7 0.7 0.5 - 2.0 166.9
Impairment test for cash-generating units or groups of cash-generating units
containing goodwill
In accordance with the requirements of 'IAS 36 Impairment of Assets', goodwill
is allocated to the Group's cash-generating units or groups of cash-generating
units that are expected to benefit from the synergies of the business
combination that gave rise to the goodwill. Goodwill impairment testing is
performed at the operating segment level as defined by 'IFRS 8 Operating
Segments', as this is the lowest level at which goodwill is monitored. Each
operating segment is assessed for impairment annually and whenever there is an
indication of impairment.
Goodwill is attributed to each operating segment as follows:
2025 2024
£m £m
Thermal Products 84.5 95.6
Performance Carbon 44.9 46.1
Technical Ceramics 34.3 35.2
163.7 176.9
During the year the Group disposed of its MMS business which was previously
reported within Thermal Products. As a result goodwill of £8.8 million was
disposed. Refer to Note 2 for further information.
The carrying value of goodwill has been assessed with reference to its value
in use, reflecting the projected discounted cash flows of each operating
segment to which goodwill has been allocated. The key assumptions used in
determining value in use relate to short and long-term growth rates and
discount rates.
The cash flow projections in year one are based on the most recent Board
approved budget, cash flow projections for years two to five are based on the
most recent forecasts. The key assumptions that underpin these cash flow
projections relate to sales and operating margins, which are based on past
experience, taking into account the effect of known or likely changes in
market or operating conditions.
The growth rates have been calculated using GDP growth forecasts published by
the International Monetary Fund for the Group's end-markets. These GDP growth
forecasts have been weighted to reflect the Group's weighted average sales in
each end-market during 2025. A 2.8% growth rate (2024: 2.1%) has been used for
years beyond 2030 and to calculate a terminal value. Management has assessed
these growth rates, including the terminal growth rate as reasonable for each
operating segment.
The Group has used the following pre-tax discount rates for calculating the
value in use of each of the operating segments: Thermal Products: 13.7% (2024:
15.1%), Performance Carbon: 13.8% (2024: 14.1%) and Technical Ceramics 13.4%
(2024: 13.6%).
A sensitivity analysis was performed in order to quantify the impact of
possible adverse changes in key assumptions used in the discounted cash flows;
the results are presented in the table below.
Decrease in recoverable value
Assuming 10%
decrease in Assuming 10%
Long-term growth rates growth rate and increase in Assuming 10%
%
no terminal pre-tax decrease in Impairment arising
£m
growth discount rate cash flows
£m
£m
£m
Thermal Products 3.1 56.8 36.8 31.8 None
Performance Carbon 2.7 72.6 53.7 48.2 None
Technical Ceramics 2.5 88.0 61.8 54.5 None
Note 12. Investments
The Group holds equity investments which are held for trading in the short
term and therefore classified as FVTPL in accordance with IFRS 9. The
investments are revalued at the balance sheet date with changes in value
recognised in the income statement.
During the year the Group received £55.7 million of shares in FIL in
consideration for the disposal of its MMS business. FIL is listed on the
Indian Stock Exchange and operates in foundry consumables and solutions. The
shares received represented a 15% holding in the business, at completion. The
shares are measured at FVTPL, with reference to quoted market prices. The
Group recognised a fair value loss of £7.1 million and associated foreign
exchange, from the period of acquisition of the shares up to 31 December 2025,
which has been included in specific adjusting items. Refer to note 4 for more
information.
During the year the Group held an equity investment in Argentina designated in
Argentine Pesos. A fair value loss of £0.2 million (2024: fair value gain of
£1.9 million) and foreign exchange loss of £0.2 million (2024: loss of £0.4
million) was recognised with the investment disposed of during the year.
2025 2024
£m £m
Balance at 1 January 2.0 2.2
Additions 56.1 -
Change in fair value (7.3) 1.9
Disposal (1.3) (1.7)
Exchange differences (1.8) (0.4)
Balance at 31 December 47.7 2.0
Note 13. Cash and cash equivalents
2025 2024
£m £m
Bank balances 68.6 110.8
Cash deposits 10.7 10.0
Cash and cash equivalents 79.3 120.8
In 2025, the Group had restricted cash of £2.3 million (2024: £2.2 million)
as a result of exchange controls in Argentina.
Reconciliation of net cash and cash equivalents to net debt(1)
2025 2024
£m
£m
Opening borrowings (337.7) (309.7)
Increase in borrowings (38.8) (121.3)
Repayment of borrowings 70.1 88.0
Effect of movement in foreign exchange - 5.3
Closing borrowings (306.4) (337.7)
Net cash and cash equivalents 74.2 111.5
Closing net debt(1) (232.2) (226.2)
Opening lease liabilities (47.1) (47.1)
Payment of lease liabilities 9.3 10.6
New leases and lease remeasurement (13.9) (10.9)
Disposal of business 0.7 -
Effect of movements in foreign exchange 1.8 0.3
Closing lease liabilities (49.2) (47.1)
Closing net debt(1) and lease liabilities (281.4) (273.3)
1. Definitions of these non-GAAP measures and reconciliations of the statutory
results to the adjusted measures can be found in the 'Glossary and alternative
performance measures' section, which is included as an appendix to the
condensed consolidated financial statements within this announcement.
The table below details changes in the Group's liabilities arising from
financing activities, including both cash and non-cash changes.
Borrowings Net cash and cash equivalents Movement in net debt Lease liabilities Net debt(1) and lease liabilities
£m
£m
£m
£m
£m
At 1 January 2024 (309.7) 124.5 (185.2) (47.1) (232.3)
Cash inflow - 23.0 23.0 - 23.0
Borrowings and lease liability cash (outflow)/inflow (33.3) - (33.3) 10.6 (22.7)
Net interest paid - (20.5) (20.5) - (20.5)
Net cash inflow/(outflow) (33.3) 2.5 (30.8) 10.6 (20.2)
Share purchases - (8.2) (8.2) - (8.2)
New leases and lease remeasurement - - - (10.9) (10.9)
Exchange and other movements 5.3 (7.3) (2.0) 0.3 (1.7)
At 31 December 2024 (337.7) 111.5 (226.2) (47.1) (273.3)
At 1 January 2025 (337.7) 111.5 (226.2) (47.1) (273.3)
Cash outflow - (8.1) (8.1) - (8.1)
Borrowings and lease liability cash outflow 31.3 - 31.3 9.3 40.6
Net interest paid - (24.4) (24.4) - (24.4)
Net cash inflow/(outflow) 31.3 (32.5) (1.2) 9.3 8.1
Share purchases - (18.8) (18.8) - (18.8)
Disposal of business - 17.4 17.4 0.7 18.1
New leases and lease remeasurement - - - (13.9) (13.9)
Exchange and other movements - (3.4) (3.4) 1.8 (1.6)
At 31 December 2025 (306.4) 74.2 (232.2) (49.2) (281.4)
1. Definitions of these non-GAAP measures and reconciliations of the statutory
results to the adjusted measures can be found in the 'Glossary and alternative
performance measures' section, which is included as an appendix to the
condensed consolidated financial statements within this announcement.
Note 14. Financial risk management
Fair Values
31 December 2025 31 December 2024
Carrying Amount Fair value Carrying Amount Fair value
£m
£m
Level 1 Level 2 Total Level 1 Level 2 Total
£m £m £m £m £m £m
Financial assets and liabilities held at amortised cost
3.37% US Dollar Senior Notes 2026 (72.4) - (71.2) (71.2) (77.9) - (74.2) (74.2)
1.55% Euro Senior Notes 2026 (21.9) - (21.5) (21.5) (20.8) - (19.9) (19.9)
4.87% US Dollar Senior Notes 2026 - - - - (20.4) - (20.1) (20.1)
1.74% Euro Senior Notes 2028 (8.7) - (8.2) (8.2) (8.3) - (7.7) (7.7)
2.89% Euro Senior Notes 2030 (21.8) - (19.8) (19.8) (20.7) - (18.8) (18.8)
5.47% US Dollar Senior Notes 2031 (7.5) - (7.3) (7.3) (8.0) - (7.6) (7.6)
5.53% US Dollar Senior Notes 2033 (7.5) - (7.2) (7.2) (8.0) - (7.4) (7.4)
5.61% US Dollar Senior Notes 2035 (22.4) - (21.3) (21.3) (24.1) - (22.0) (22.0)
5.50% Cumulative First Preference shares (0.1) - (0.1) (0.1) (0.1) - (0.1) (0.1)
5.00% Cumulative Second Preference shares (0.3) - (0.3) (0.3) (0.3) - (0.3) (0.3)
(162.6) - (156.9) (156.9) (188.6) - (178.1) (178.1)
Financial assets held at FVTPL 47.2 47.2 - 47.2 2.0 2.0 - 2.0
Derivative financial assets held at fair value 2.0 - 2.0 2.0 1.2 - 1.2 1.2
49.2 47.2 2.0 49.2 3.2 2.0 1.2 3.2
Derivative financial liabilities held at fair value (0.5) - (0.5) (0.5) (2.6) - (2.6) (2.6)
The table above analyses the fair values of financial instruments held by the
Group, by valuation method, together with the carrying amounts shown in the
balance sheet.
The fair value of cash and cash equivalents, current trade and other
receivables/payables and floating-rate bank and other borrowings are excluded
from the preceding table as their carrying amount approximates their fair
value.
Fair value hierarchy
The different levels have been defined as follows:
· Level 1: quoted prices (unadjusted) in active markets for identical assets or
liabilities.
· Level 2: not traded in an active market but the fair values are based on
quoted market prices or alternative pricing sources with reasonable levels of
price transparency. Fair value is calculated using discounted cash flow
methodology, future cash flows are estimated based on forward exchange rates.
· Level 3: inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
There have been no transfers between Level 1 and Level 2 during 2025 and 2024
and there were no Level 3 financial instruments in either 2025 or 2024.
The major methods and assumption used in estimating the fair values of
financial instruments reflected in the preceding table are as follows:
Equity securities
Fair value is based on quoted market prices at the balance sheet date.
Derivatives
Forward exchange contracts are marked to market either using listed market
prices or by discounting the contractual forward price and deducting the
current spot rate.
Fixed-rate borrowings
Fair value is calculated based on discounted expected future principal and
interest cash flows. The interest rates used to determine the fair value of
borrowings are 3.7-6.0% (2024: 3.7-6.6%).
Note 15. Pensions and other post-retirement employee benefits
31 December 2025
UK USA Europe Rest of World Total
£m
£m
£m
£m
£m
Summary of net surplus/(obligations)
Present value of unfunded defined benefit obligations - (3.5) (23.9) (4.5) (31.9)
Present value of funded defined benefit obligations (315.6) (94.2) (0.7) (8.3) (418.8)
Fair value of plan assets 327.1 93.2 - 8.4 428.7
Net surplus/(obligations) 11.5 (4.5) (24.6) (4.4) (22.0)
Represented by:
Surpluses 11.5 - - 0.9 12.4
Obligations - (4.5) (24.6) (5.3) (34.4)
Movements in present value of defined benefit obligation
At 1 January 2025 (318.1) (105.3) (26.1) (12.8) (462.3)
Current service cost - - (0.8) (2.0) (2.8)
Interest cost (16.7) (5.3) (0.9) (0.2) (23.1)
Actuarial gain/(loss)
Experience gain/(loss) on plan obligations (4.3) (0.9) 0.2 (0.3) (5.3)
Changes in financial assumptions - gain/(loss) 4.6 (2.3) 2.0 0.2 4.5
Changes in demographic assumptions - loss (2.8) - - - (2.8)
Benefits paid 21.7 8.6 1.7 1.2 33.2
Curtailments or settlements - - - 0.1 0.1
Disposal of business - - 0.5 0.6 1.1
Exchange adjustments - 7.5 (1.2) 0.4 6.7
At 31 December 2025 (315.6) (97.7) (24.6) (12.8) (450.7)
Movements in fair value of plan assets
At 1 January 2025 330.4 101.5 0.2 8.7 440.8
Interest on plan assets 17.4 5.0 - 0.3 22.7
Remeasurement gain 1.3 2.0 - 0.2 3.5
Contributions by employer - 0.5 1.6 1.4 3.5
Benefits paid (21.7) (8.6) (1.7) (1.2) (33.2)
Administrative cost (0.3) - - - (0.3)
Disposal of business - - (0.2) (0.4) (0.6)
Exchange adjustments - (7.2) 0.1 (0.6) (7.7)
At 31 December 2025 327.1 93.2 - 8.4 428.7
Actual return on assets 18.7 7.0 - 0.5 26.2
31 December 2025
UK USA Europe Rest of World Total
£m
£m
£m
£m
£m
Fair value of plan assets by category
Equities - 4.6 - - 4.6
Growth assets(1) 29.3 - - - 29.3
Bonds 44.4 85.5 - - 129.9
Liability-driven investments (LDI)(2) 164.0 - - - 164.0
Matching insurance policies 88.2 1.3 - 6.4 95.9
Other 1.2 1.8 - 2.0 5.0
327.1 93.2 - 8.4 428.7
1. Growth assets include investment in Multi-Asset Funds as well as UK
Property.
2. The LDI assets are pooled funds in the UK that provide a leveraged return
linked to long duration fixed interest and index-linked government bonds
valued at the bid price of the units. This provides interest rate and
inflation hedging equivalent in size to circa 100% of the invested assets of
the UK Schemes measured on the 'Long-Term Objective' basis (Gilts +50bps)
(excluding matching insurance policies).
31 December 2024
UK USA Europe Rest of Tota
£m £m £m World £m l
£m
Summary of net
surplus/(obligations)
Present value of unfunded defined benefit obligations - (4.0) (24.9) (3.9) (32.8)
Present value of funded defined benefit obligations (318.1) (101.3) (1.2) (8.9) (429.5)
Fair value of plan assets 330.4 101.5 0.2 8.7 440.8
Net surplus/(obligations) 12.3 (3.8) (25.9) (4.1) (21.5)
Represented by:
Surpluses 12.3 0.1 - 0.6 13.0
Obligations - (3.9) (25.9) (4.7) (34.5)
UK USA Europe Rest of World
%
%
%
%
Principal actuarial assumptions at 31 December 2025 were:
Discount rate 5.47 5.17 4.20 5.22
Inflation (UK: RPI/CPI) 2.79/2.22 n/a 2.00 n/a
Principal actuarial assumptions at 31 December 2024 were:
Discount rate 5.45 5.47 3.50 4.66
Inflation (UK: RPI/CPI) 3.15/2.52 n/a 2.00 n/a
Note 16. Provisions and contingent liabilities
Closure and Legal and other Environmental Total
£m
restructuring Provisions Provisions
£m
£m
provisions
£m
Balance at 1 January 2025 7.4 6.3 6.7 20.4
Provisions made during the year 3.6 0.7 0.8 5.1
Provisions used during the year (3.1) (0.3) (0.6) (4.0)
Provisions reversed during the year (1.6) (0.8) (0.5) (2.9)
Disposal of business - (0.2) - (0.2)
Effect of movements in foreign exchange (0.3) (0.2) 0.1 (0.4)
Balance at 31 December 2025 6.0 5.5 6.5 18.0
Current 4.4 1.3 2.4 8.1
Non-current 1.6 4.2 4.1 9.9
6.0 5.5 6.5 18.0
Closure and restructuring provisions
Closure and restructuring provisions relate to the Group's restructuring
programmes and represent committed expenditure at the balance sheet date. The
amounts provided are based on the costs of terminating relevant contracts,
under the contract terms, and management's best estimate of other associated
restructuring costs including professional fees. Of the total, £4.5 million
of the provisions are expected to be utilised in the next one to two years.
We have a provision for a multi-employer pension obligation for a site which
was closed during 2021. The cash outflows relating to the pension obligation
may continue for up to 15 years, subject to any settlement being reached in
advance of that date.
Legal and other provisions
Legal and other provisions mainly comprise amounts provided against open legal
and contractual disputes arising in the normal course of business and
long-service costs. Provisions are made for the expected costs associated with
such matters, based on past experience of similar items and other known
factors, taking into account professional advice received, and represent
management's best estimate of the most likely outcome. The timing of
utilisation of these provisions is frequently uncertain, reflecting the
complexity of issues and the outcome of various court proceedings and
associated negotiations.
Where obligations are not capable of being reliably estimated, or if a
material outflow of economic resources is considered not probable, it is
classified as a contingent liability. The Group is of the opinion that any
associated claims that might be brought can be defeated successfully and,
therefore, the possibility of any material outflow in settlement is assessed
as remote.
Subsidiary undertakings within the Group have given unsecured guarantees of
£16.3 million (2024: £9.5 million) in the ordinary course of
business.
Environmental provisions
Environmental provisions are made for quantifiable environmental liabilities
arising from known environmental issues. The amounts provided are based on the
best estimate of the costs required to remedy these issues. The provisions are
expected to be utilised in the next five to ten years.
Tax contingent liabilities
The Group is subject to periodic tax audits by various fiscal authorities
covering corporate, employee and sales taxes in the various jurisdictions in
which it operates. We have provided for estimates of the Group's likely
exposures where these can be reliably estimated.
Environmental and other contingent liabilities
Due to the international footprint of the Group and the nature of its
manufacturing operations it is subject to a wide range of local health and
safety, environmental and employment laws and regulations. At any point in
time the Group has a number of ongoing environmental or employment cases for
which there is uncertainty due to the wide range of possible outcomes and
associated costs. Possible outcomes include the case being settled, withdrawn
or dismissed.
Note 17. Subsequent events
There were no reportable subsequent events following the balance sheet date.
Glossary and alternative performance measures
Constant-currency(1) Constant-currency revenue and Group adjusted operating profit are derived by
translating the prior year results at current year average exchange rates.
Corporate costs Corporate costs consist of the costs of the central head office.
Free cash flow before acquisitions, disposals and dividends(1) Cash generated from continuing operations less net capital expenditure, net
interest paid, tax paid and lease payments.
Group earnings before interest, tax, depreciation EBITDA is defined as operating profit before specific adjusting items,
and amortisation (EBITDA)(1) amortisation of intangible assets and depreciation.
Earnings before interest, EBITA is defined as operating profit before specific adjusting items and
amortisation of
tax and amortisation (EBITA)
intangible assets.
Group adjusted operating profit(1) Operating profit adjusted to exclude specific adjusting items and amortisation
of intangible assets.
Group organic(1) The Group results excluding acquisition, disposal and business exit impacts at
constant-currency.
Adjusted earnings per share (EPS)(1) Adjusted earnings per share is defined as operating profit adjusted to exclude
specific adjusting items and amortisation of intangible assets, less net
financing costs, income tax expense and non-controlling interests, divided by
the weighted average number of Ordinary shares during the period.
Net debt(1) Borrowings, bank overdrafts less cash and cash equivalents.
Net cash and cash equivalents(1) Net cash and cash equivalents is defined as cash and cash equivalents less
bank overdrafts.
Return on invested capital (ROIC)(1) Group adjusted operating profit (operating profit excluding specific adjusting
items and amortisation of intangible assets) divided by the average adjusted
net assets (excludes long-term employee benefits, deferred tax assets and
liabilities, current tax payable, provisions, investments, cash and cash
equivalents, borrowings, bank overdrafts and lease liabilities).
Specific adjusting items See Note 4 to the condensed consolidated financial statements for further
details.
Underlying Reference to underlying reflects the trading results of the Group without the
impact of specific adjusting items and amortisation of intangible assets that
would otherwise impact the users understanding of the Group's performance. The
Directors believe that adjusted results provide additional useful information
on the core operational performance of the Group and review the results of the
Group on an adjusted basis internally.
1. Reconciliations of non-GAAP measures to GAAP measures can be found
at the end of this announcement.
The Group monitors business performance through alternative performance
measures (APMs) which are not defined under IFRS and are therefore non-GAAP
measures. The APMs provide useful information to stakeholders, including
additional insight into ongoing trading and year-on-year comparisons. These
APMs are not a substitute for IFRS measures but are complementary to them. The
Group defines each APM and therefore they may not be directly comparable with
similarly named metrics in other businesses. The definition, purpose and
reconciliation to statutory figures where applicable are included below.
In the year ended 31 December 2025 the results of MMS for the period up to
disposal are presented in discontinued operations in the Consolidated Income
Statement. Prior year figures have been restated to present results for MMS in
discontinued operations. The income statement metrics used to assess Group
performance exclude the results of MMS and in order to provide meaningful
comparison to prior years certain metrics are presented a 'Headline' basis
which includes the results of MMS for the period of ownership.
Constant-currency
Constant-currency figures are derived by translating the prior year results at
current year average exchange rates. These measures are used as they allow key
metrics such as revenue to be compared year on year excluding the impact of
foreign exchange rates.
Organic growth
The growth of the business excluding the impacts of acquisitions, divestments
and foreign currency impacts. This measure is used as it allows revenue and
adjusted operating profit to be compared on a like-for-like basis.
Thermal Products Performance Carbon Technical Segment
£m
£m
Ceramics Totals
£m
£m
2024 revenue(1) 377.6 345.2 337.3 1,060.1
Impact of foreign currency movements (14.1) (8.5) (6.8) (29.4)
Impact of acquisitions, disposals and business exits - - - -
Organic constant-currency change (15.3) (29.9) 11.1 (34.1)
Organic constant-currency change % (4.2)% (8.9)% 3.4% (3.3)%
2025 revenue 348.2 306.8 341.6 996.6
1. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
Thermal Products Performance Carbon Technical Ceramics Segment Corporate
£m
£m
£m
Totals Costs Group
£m
£m
£m
2024 adjusted operating profit(1) 37.5 55.1 39.2 131.8 (8.5) 123.3
Impact of foreign currency movements (3.9) (2.3) (0.8) (7.0) - (7.0)
Impact of acquisitions, disposals and business exits - - - - - -
Organic constant-currency change (10.1) (11.6) 1.0 (20.7) (1.8) (22.5)
Organic constant-currency change % (30.1)% (22.0)% 2.6% (16.6)% - (19.3)%
2025 adjusted operating profit 23.5 41.2 39.4 104.1 (10.3) 93.8
1. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
Headline organic growth
Thermal Products Performance Carbon Technical Segment
£m
£m
Ceramics Totals
£m
£m
2024 revenue(1) 418.2 345.2 337.3 1,100.7
Impact of foreign currency movements (15.3) (8.5) (6.8) (30.6)
Impact of acquisitions, disposals and business exits (5.1) - - (5.1)
Organic constant-currency change (15.9) (29.9) 11.1 (34.7)
Organic constant-currency change % (4.0)% (8.9)% 3.4% (3.3)%
2025 revenue 381.9 306.8 341.6 1,030.3
1. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
Thermal Products Performance Carbon Technical Ceramics Segment Corporate
£m
£m
£m
Totals Costs Group
£m
£m
£m
2024 adjusted operating profit(1) 42.6 55.1 39.2 136.9 (8.5) 128.4
Impact of foreign currency movements (4.2) (2.3) (0.8) (7.3) - (7.3)
Impact of acquisitions, disposals and business exits (0.8) - - (0.8) - (0.8)
Organic constant-currency change (8.8) (11.6) 1.0 (19.4) (1.8) (21.2)
Organic constant-currency change % (23.4)% (22.0)% 2.6% (15.1)% - (17.6)%
2025 adjusted operating profit 28.8 41.2 39.4 109.4 (10.3) 99.1
1. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
Corporate costs
Corporate costs consist of the costs of the central head office.
Specific adjusting items
Specific adjusting items are items which occur infrequently and are presented
separately in the consolidated income statement due to their nature and size.
They typically include but are not limited to:
· Individual restructuring projects which are material or relate to the closure
of a part of the business and are not expected to recur;
· Impairment of non-financial assets which are material;
· Gains or losses on disposal or exit of businesses;
· Significant costs incurred as part of the integration of an acquired business;
· Gains or losses arising on significant changes to or closures of defined
benefit pension plan; and
· Expenses related to the design, configuration, customisation and
implementation of a Global ERP system; and
· Changes in the fair value and associated foreign exchange on shares in Foseco
India Ltd ('FIL')
The Directors consider disclosure of specific adjusting items necessary for
the users of the financial statements to obtain an alternative understanding
of the financial information and underlying performance of the business. Note
4 provides details of the specific adjusting items in the current and prior
year.
Group earnings before interest, tax, depreciation and amortisation (EBITDA)
Group EBITDA is defined as operating profit before specific adjusting items,
amortisation of intangible assets and depreciation.
The Group uses this measure as it is a key metric in covenants over debt
facilities; these covenants use EBITDA excluding IFRS 16 Leases. The following
table reconciles operating profit to Group EBITDA:
2025 2025 headline Restated(1) 2024 2024 Headline
£m £m £m £m
Operating profit 45.2 49.6 99.2 103.6
Add back: specific adjusting items included in operating profit 47.6 48.5 22.4 23.1
Add back: depreciation - property, plant and equipment 31.8 33.6 32.2 34.1
Add back: depreciation - right-of-use assets 8.3 8.4 8.3 8.6
Add back: amortisation of intangible assets 1.0 1.0 1.7 1.7
Group EBITDA 133.9 141.1 163.8 171.1
1. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
Group EBITDA excluding IFRS 16 Leases impact
Group EBITDA excluding IFRS 16 Leases impact is defined as Group EBITDA less
interest expense on lease liabilities and capital payments on lease
liabilities.
The Group uses this measure as it is a key metric in covenants over debt
facilities; these covenants use EBITDA on an IAS 17 basis (pre-IFRS 16 basis)
and this metric is used as a proxy for the charge that would have been
attributable to operating leases recognised in EBITDA under the now defunct
IAS 17.
The following table reconciles Group EBITDA to Group EBITDA excluding IFRS 16
Leases impact:
2025 2025 Headline Restated(1) 2024 2024 Headline
£m
£m
£m
£m
Group EBITDA 133.9 141.1 163.8 171.1
Interest expense on lease liabilities (2.8) (2.8) (2.6) (2.6)
Capital payments on lease liabilities (9.2) (9.3) (10.2) (10.6)
Group EBITDA excluding IFRS 16 Leases impact 121.9 129.0 151.0 157.9
1. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
Adjusted operating profit
Adjusted operating profit is defined as operating profit excluding specific
adjusting items and amortisation of intangible assets.
Specific adjusting items are excluded on the basis that they distort trading
performance. The exclusion of amortisation of intangible assets is to allow
for consistent comparability internally and externally between our businesses.
The following table reconciles operating profit to adjusted operating profit:
2025 Thermal Products Performance Carbon Technical Ceramics Segment Corporate Dis-continued Headline Group
£m
£m
£m
£m
£m
total Costs Group
£m
£m
£m
Operating profit 17.3 20.6 37.9 75.8 (30.6) 45.2 4.4 49.6
Add back specific adjusting items included in operating profit 5.9 20.4 1.0 27.3 20.3 47.6 0.9 48.5
Add back amortisation of intangible assets 0.3 0.2 0.5 1.0 - 1.0 - 1.0
Adjusted operating profit 23.5 41.2 39.4 104.1 (10.3) 93.8 5.3 99.1
Adjusted operating profit margin 6.7% 13.4% 11.5% 9.4% 9.6%
Restated(1) 2024 Thermal Products Performance Carbon Technical Ceramics Segment Corporate Dis-continued Headline Group
£m
£m
£m
£m
£m
total Costs Group
£m
£m
£m
Operating profit 29.3 47.2 37.9 114.4 (15.2) 99.2 4.4 103.6
Add back specific adjusting items included in operating profit 7.4 7.6 0.7 15.7 6.7 22.4 0.7 23.1
Add back amortisation of intangible assets 0.8 0.3 0.6 1.7 - 1.7 - 1.7
Adjusted operating profit 37.5 55.1 39.2 131.8 (8.5) 123.3 5.1 128.4
Adjusted operating profit margin 9.9% 16.0% 11.6% 11.6% 11.7%
1. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
Adjusted earnings per share (EPS)
Adjusted earnings per share is defined as profit for the year attributable to
shareholders of the Company adjusted to exclude profit from discontinued
operations, specific adjusting items and amortisation of intangible assets and
the tax effects of the excluded items, divided by the weighted average number
of Ordinary shares during the year.
Whilst amortisation of intangible assets is a recurring charge, it is excluded
from these measures on the basis that it primarily arises on externally
acquired intangible assets and therefore does not reflect consistently the
benefit that all of the Group's businesses realise from their intangible
assets, which may not be recognised separately.
This measure of earnings is shown because the Directors consider that it
provides a helpful indication of the Group's financial performance excluding
material non-recurring expenses or gains and non-financial asset impairments
and impairment reversals, and therefore facilitates the evaluation of the
Group's performance over time. A reconciliation from IFRS profit to the profit
used to calculate adjusted earnings per share is included in Note 8.
Free cash flow before acquisitions, disposals and dividends
Free cash flow before acquisitions, disposals and dividends is defined as cash
generated from continuing operations less net capital expenditure, net
interest (interest paid on borrowings, overdrafts, supplier finance and lease
liabilities, net of interest received), tax paid and lease payments.
The Group discloses free cash flow as this provides readers of the
consolidated financial statements with a measure of the cash flows from the
business before corporate-level cash flows (acquisitions, disposals and
dividends).
The following table reconciles cash generated from continuing operations to
free cash flow before acquisitions, disposals and dividends:
2025 2025 Restated(1) 2024 2024
£m
£m
Headline Headline
£m
£m
Cash generated from operations 162.0 168.6 154.8 163.0
Net capital expenditure (63.4) (65.9) (84.1) (90.2)
Net interest on cash borrowings (18.8) (18.8) (15.3) (15.3)
Tax paid (25.5) (26.4) (28.8) (29.2)
Lease payments and interest (12.0) (12.1) (12.8) (13.2)
Free cash flow before acquisitions, disposals and dividends 42.3 45.4 13.8 15.1
1. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
Net debt
Net debt is defined as borrowings, and bank overdrafts less cash and cash
equivalents.
The Group discloses net debt because this is the measure used in the covenants
over the Group's debt facilities. It helps readers of the consolidated
financial statements assess its ability to meet its financial obligations,
manage debt and its capacity to invest in growth opportunities.
2025 2024
£m £m
Cash and cash equivalents 79.3 120.8
Non-current borrowings (212.1) (337.7)
Current borrowings and bank overdrafts (99.4) (9.3)
Closing net debt (232.2) (226.2)
Net cash and cash equivalents
Net cash and cash equivalents is defined as cash and cash equivalents less
bank overdrafts. The Group discloses this measure as it provides an indication
of the net short-term liquidity available to the Group.
2025 2024
£m £m
Cash and cash equivalents 79.3 120.8
Overdrafts (5.1) (9.3)
Net cash and cash equivalents 74.2 111.5
Return on invested capital (ROIC)
ROIC is defined as 12-month adjusted operating profit divided by the average
capital employed. The Group discloses ROIC to assess its efficiency in
generating profits from the capital it has invested in its operations.
Third-party working capital includes inventories, trade and other receivables,
and trade and other payables.
2025 Restated(1) 2024
£m £m
Operating profit 45.2 99.2
Add back: specific adjusting items 47.6 22.4
Add back: amortisation of intangible assets 1.0 1.7
Group adjusted operating profit 93.8 123.3
Third-party working capital 91.0 151.4
Property, plant and equipment 326.0 344.9
Right-of-use-assets 36.4 32.5
Goodwill 163.7 176.9
Other intangible assets 3.2 3.0
Capital employed 620.3 708.7
Average capital employed 664.5 695.5
ROIC 14.1% 17.7%
1. The Group disposed of the majority of its MMS business in 2025. The
disposal group formed part of the Thermal Products segment and has been
classified as a discontinued operation under IFRS 5. Financial results for the
year ended 31 December 2024 have been restated to present the results of the
disposal group as discontinued operations.
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Copyright 2019 Regulatory News Service, all rights reservedRecent news on Morgan Advanced Materials
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