UK's Morgan Advanced Materials tumbles on weak outlook, chip slump
FILE PHOTO: Financial markets data and information are displayed on a screen inside the LSEG (London Stock Exchange Group) headquarters in Paternoster Square, London, Britain, April 25, 2025. REUTERS/Toby Melville/File Photo
Shares of Morgan Advanced Materials slipped nearly 14 per cent on Tuesday after the British chip parts supplier forecast annual sales to be lower than last year due to weak semiconductor demand and growing uncertainty in European industrial markets.
Chip demand has stayed under pressure amid high customer inventories and deferred orders, while stagnant industrial output in Europe and geopolitical tensions have further weighed on client sentiment.
Shares of the firm, which has operations across 60 sites globally, were down 8 per cent at 201 pence by 0805 GMT. The stock was the top loser on FTSE midcap index, which fell 0.46 per cent.
"This is an unexpected downgrade given some signs of stabilisation with the half-year results...(this) will likely cause another hit to the share price and investor sentiment," Jefferies analysts said in a note.
Morgan Advanced Materials, which drew nearly one-third of its 2024 revenue from industrial manufacturing, expects annual sales to be about 4 per cent lower year-on-year with adjusted operating profit margin projected to slip to around 10 per cent this year.
It reported an adjusted operating profit margin of 11.7 per cent in 2024.
The company had warned in August that the market might not recover in the second half as it flagged a profit warning.
