Morgan Advanced Materials
Poised for margin expansion as end markets stabilise
Morgan Advanced Materials entered 2026 with a renewed sense of momentum and strategic clarity. This follows a year in which the business demonstrated resilience, amid one of the most volatile global industrial environments in a decade.
While 2025 saw demand pressures, Morgan has laid the foundations for a strong rebound, making it a compelling investment opportunities for long term shareholders.
Despite a 3.3% decline in organic constant currency revenue, Morgan delivered headline adjusted operating profit of £99.1 million and maintained a headline margin of 9.6%. Morgan’s £16 million in incremental simplification and efficiency savings in 2025, (with a further £27 million expected by 2026), have substantially improved cost competitiveness and operating leverage. This positions Morgan for rapid margin expansion as markets recover.
CEO Damien Caby’s strategy, unveiled at the December 2025 strategy update, targets a return to a 12% margin by 2028, with sustained levels of 12% to 14% beyond 2028. The plan focuses on three levers: transforming operational effectiveness, driving stronger growth in segments where Morgan has a leadership position, and maximising portfolio value, including a formal review of the Thermal Products division.
Morgan's balance sheet remains solid, supported by £76.2 million in total consideration from the sale of the Molten Metal Systems (MMS) business, including £55.7 million in listed equity and £20.5 million in cash. Leverage stood at 1.8x headline EBITDA, with the company guiding towards 1.7x by the end of 2026 (once MMS proceeds fully materialise).
Structural megatrends continue to favour Morgan. These include aerospace engine efficiency, semiconductor device electrification, renewable energy expansion and industrial decarbonisation. In aerospace & defence, for example, the company saw strong demand, contributing to the 20.7% of revenue derived from this high growth sector. The Technical Ceramics global business unit delivered 3.4% organic constant currency revenue growth, supported by rising aircraft deliveries and next generation engine complexity.
Environmental performance remains a strategic differentiator. Morgan has cut scope 1 and 2 emissions by 58% vs. a 2015 baseline and sources 80% of its electricity from renewable and nuclear sources, hitting the SBTi validated target ahead of schedule.
For investors seeking exposure to a global advanced materials leader with clear operational transformation, a strong ESG trajectory and high barrier to entry positions in structurally growing markets, Morgan Advanced Materials stands out. With stabilising end markets and an efficiency driven strategy already delivering early wins, 2026 marks the beginning of a compelling growth chapter.