Morgan Crucible dives

Morgan Crucible shocked the market today as tough conditions in Europe and China forced the high-technology materials group to issue a profits warning.

The shares tumbled by 11% as a result. The company, which makes body armour for soldiers and insulation materials for the solar power industry, said it had begun cutting costs to address the weakening demand.

The cuts, which include job losses in continental Europe, will reduce Morgan’s costs by about £8 million a year, resulting in a one-off £15 million charge for 2012.

“With a weaker market environment, group performance for the full year is likely to be materially below the board’s previous expectations,” said chief executive Mark Robertshaw. “We are taking firm action to reduce our cost base to protect profitability and are reviewing further structural actions,” he added.

Robertshaw added he was “reviewing the composition of our portfolio” to see whether any parts of the business were “non-core” and might be disposed of.

He said trading conditions have deteriorated across most of Morgan’s markets in the third quarter of the year, with Europe and China being hit especially hard.

As a result, revenues for the period were about 10% below the first half, a reduced level of trading that is expected to continue for the rest of the year.

The group’s shares fell by 28.8p to 227.15p.