Morgan Advanced Materials PLC shares fell on Friday after the firm reported it would be cutting its investment into semiconductors in 2025, despite reporting profit growth for 2024.

Shares in Morgan Advanced Materials were down 19% at 207.00p each in London on Friday morning. The stock has fallen 21% over the past twelve months.

The Windsor, England-based manufacturer of carbon and ceramic materials said pretax profit for 2024 was £84.6 million, growing 8.7% from £77.8 million the year before.

The was despite revenue slipping 1.3% to £1.10 billion from £1.11 billion, as operating costs reduced 2.8% to £991.2 million from £1.02 billion.

Morgan Advanced Materials declared a total dividend of 12.2 pence, up 1.7% on-year from 12.0p.

‘We have delivered robust organic constant currency revenue growth against a backdrop of increasingly challenging end-markets, with good progress made in our business simplification and efficiency initiatives, continuing our track record of self-help,’ said Chief Executive Officer Pete Raby. ‘We remain focused on delivering against our strategic initiatives and expect a return to a 12.5% adjusted operating profit margin during 2025.’

Looking ahead, Morgan Advanced Materials has forecast a mid-single-digit organic decline in revenue for 2025, and assumed no recovery in the second half, as ‘demand in a number of our end-markets is uncertain’.

‘Demand for semiconductor capacity has been impacted by the slower growth in BEVs leading to high customer inventory levels in the short term,’ the firm continued.

As a result, Morgan Advanced Materials has cut its investment in semiconductor capacity to around £60 million, from its prior £100 million estimate, to deliver incremental revenue of £40 million and adjusted operating profit of £12 million in 2027, down from £80 million and £25 million estimates respectively.

‘We remain confident in the longer-term potential in semiconductors and we expect to resume our investment as the market recovers,’ it said.

The firm also on Friday confirmed that it is set to begin the second tranche of its ongoing £10 million buyback, for up to £40 million. The second tranche is due to start no later than March 31, upon completion of the first tranche.

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