Press Release

Morgan Advanced Materials plc

11 December 2017

Morgan Advanced Materials plc today announces that the group has elected to make an accelerated cash contribution of an additional US$36million to the group's US defined benefit pension scheme in December 2017. 

The US defined benefit pension scheme had a deficit under IAS19 at 30 June 2017 of ca. US$46million, since when the funding position has improved due largely to positive returns on the asset portfolio.  In recent years, the group has contributed between US$10-11million per annum to the US defined benefit schemes under a funding recovery plan that was anticipated to close the remaining deficit over a 5 year recovery period to 2022.

Following this additional payment, the US defined benefit pension scheme will be close to full funding on an IAS19 basis and no further deficit recovery payments are anticipated.  As a result the group's total ongoing payments to the defined benefit pension schemes across the group are currently estimated to reduce from the previously expected £25 million per annum to ca. £16.5 million per annum from 2018.

The payment into the US defined benefit pension scheme is eligible for US corporation tax relief, and will also lead to a reduction in the US Pension Benefit Guarantee Corporation levy of ca. US$1 million per annum from 2018 onwards.

This payment will lead to a reduction in the IAS19 net defined benefit pension obligation and an increase in net debt by US$36million in December 2017.

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The next scheduled update is the Group's Preliminary Full Year results presentation on 27 February 2018.