Morgan Crucible Co Plc (MGCR) Chief Executive Officer Mark Robertshaw said the maker of advanced materials used in body armor and wind-turbine blades will close facilities in Europe and shift work to lower-cost operations to counteract a greater-than-expected drop in revenue.
Third-quarter revenue was 10 percent below the preceding three months, the company said today in a statement. Markets in Europe and China were particularly affected, the Windsor, England-based company said.
Morgan Crucible’s advanced materials and technology business has been hit most by global economic slowdown, with demand at the ceramics and molten metal systems units is holding up. The company is grappling with a drop in sales to the U.S. Department of Defense this year. The stock fell as much as 14 percent, the most in more than three years.
“We are looking at the potential closure and rationalization of some of our smaller plants,” Robertshaw said in a telephone interview. He would not name the facilities, mainly in Europe, because employees still need to be consulted.
Work will be moved into larger facilities and to existing, lower-cost sites, he said. Closing decisions, which will cost about 15 million pounds, will be taken in the next 3 to 4 months and should yield a 7 million pounds to 8 million pound reduction in the annual cost base, Robertshaw said.
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