Morgan Advanced Materials said on Tuesday that its full-year 2025 financial results fell short of analyst expectations, with adjusted earnings before interest, tax and amortization coming in 7% below consensus. While reported sales exceeded the market forecast, margin performance and per-share earnings disappointed.
The company recorded 2025 revenues of £1,030 million for the year, versus a consensus projection of £1,015 million. On an organic basis, revenue contracted by 3.3%, which was a smaller decline than the consensus forecast of a 4.3% drop.
Adjusted EBITA was reported at £99.1 million, missing the consensus figure of £106 million, with an EBITA margin of 9.6% compared with the expected 10.4%. Reported earnings per share were 15.9 pence, below the consensus expectation of 19.1 pence.
Net debt at the year end stood at £232 million, up from £226 million at the end of 2024, producing a net debt to EBITDA ratio of 1.8 times.
Management identified its Thermal Products segment and higher central costs as the primary contributors to the shortfall versus forecasts. The company said Thermal Products experienced a soft industrial backdrop during the year, while central cost pressures reflected expenses tied to enterprise resource planning implementation.
By end market, demand for aerospace and defense remained robust, according to the company, while healthcare demand weakened as customers destocked. Exposure to semiconductors and industrial end markets stayed subdued as anticipated, although the company noted stabilization in the second half of 2025. Separately, Performance Carbon benefited from a one-off £5 million of non-repeating trading receipts during 2025.
In a significant strategic move, Morgan Advanced Materials announced a formal review of its Thermal Products division, which represents 37% of group revenues. The review may include a potential disposal, and the company said an outcome from this process could be possible in the first half of 2026.
Looking to 2026, management provided guidance calling for organic revenue growth of 1% to 2% and an adjusted operating margin of around 10%. The company noted that consensus forecasts currently sit at roughly £1,010 million of revenues with EBITA at £100 million.
Clear summary
Morgan Advanced Materials beat headline revenue consensus but missed on EBITA and EPS in 2025. Weakness in Thermal Products and higher central costs were cited as the main drivers of the earnings shortfall. The Thermal Products unit, which accounts for over a third of sales, is under formal review with a potential disposal outcome possible in H1 2026. Management expects modest organic growth and an operating margin near 10% in 2026, broadly consistent with market expectations.