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Investing.com -- Shares of Morgan Advanced Materials climbed 2.9% on Thursday following the release of their first quarter sales report, maintaining its full-year guidance, with cost-saving initiatives on track to achieve targeted savings.
The group reported 3.5% decline in organic sales, aligning with management’s expectations.
The first quarter results, which were in line with the company’s previous full-year guidance for a mid-single-digit percentage decline in sales, indicated a slightly better start to the year than anticipated.
Morgan’s cost savings program is progressing as planned, with expectations to deliver £16 million in savings by 2025.
Looking ahead, the company does not anticipate significant changes to the full-year outlook, expecting mid-single-digit percentage sales declines and aiming for a 12.5% margin run rate by year-end.
Tariffs are not projected to have a material net impact on fiscal year 2025 trading, thanks to localization efforts and other mitigating actions, although the company acknowledges the ongoing macroeconomic uncertainty related to tariffs.
There may be slightly higher foreign exchange headwinds, which could cause a minor adjustment in consensus from the current £124 million EBITA toward the £122 million forecasted by the company.
RBC analysts commented on the update, stating, "A relatively robust update. Confidence in the direct mitigation is a positive, though the relatively short-cycle nature of Morgan’s business does leave it exposed to the wider unfolding macro uncertainty."
This analyst sentiment reflects a cautious optimism about the company’s ability to navigate current economic challenges while acknowledging potential risks associated with the global economic climate.
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