(Reuters) -Shares of Morgan Advanced Materials slipped nearly 14% on Tuesday after the British chip parts supplier forecast annual sales to be lower than last year due to weak semiconductor demand and growing uncertainty in European industrial markets.
Chip demand has stayed under pressure amid high customer inventories and deferred orders, while stagnant industrial output in Europe and geopolitical tensions have further weighed on client sentiment.
Shares of the firm, which has operations across 60 sites globally, were down 8% at 201 pence by 0805 GMT. The stock was the top loser on FTSE midcap index, which fell 0.46%.
“This is an unexpected downgrade given some signs of stabilisation with the half-year results…(this) will likely cause another hit to the share price and investor sentiment,” Jefferies analysts said in a note.
Morgan Advanced Materials, which drew nearly one-third of its 2024 revenue from industrial manufacturing, expects annual sales to be about 4% lower year-on-year with adjusted operating profit margin projected to slip to around 10% this year.
It reported an adjusted operating profit margin of 11.7% in 2024.
The company had warned in August that the market might not recover in the second half as it flagged a profit warning.
(Reporting by Yamini Kalia in Bengaluru; Editing by Sonia Cheema)
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