Melrose Industries

Overview
Price performance
Financials
Research
Thematics

Melrose Industries is a focused aerospace group with activities in engine components and structures, operating in both metallic and composite materials. The group has significant risk and revenue sharing partnership (RRSP) investments on multiple engine programmes.

Melrose is negotiating the current industry turbulence from supply chain issues well, assisted by its strong position in the engines aftermarket. A further £250m buyback has been announced, but equally important is the £300m in investment into areas such as additive fabrication to drive growth ahead of the market.

Latest Insights

Industrials |
Update

01.08.24

Melrose Industries — Positive progress continues

Industrials |
Update

03.06.24

Melrose Industries — Crystallisation of the 2020 Employee Share Plan

Industrials |
Flash note

02.05.24

Melrose Industries — Steady climb

Industrials |
Update

08.03.24

Melrose Industries — Continued outperformance

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Sector

Industrials

Equity Analyst

David Larkam

Analyst, Industrials

Key Management

Christopher Miller

Executive Vice Chairman
Matthew Gregory

CFO
Peter Dilnot

CEO

Balance Sheet

Forecast net debt (£m)

1282

Forecast gearing ratio (%)

Share Price Performance

Price Performance
%	1M	3M	12M
Actual	(4.6)	(15.7)	(2.1)
Relative	(4.3)	(17.3)	(10.7)
52 week high/low	677.6p/446.8p

Financials

Melrose’s H1 revenue increased by 9% (12% excluding business exited) to £1.7bn and, at the aerospace operating level, the operating margin increased 420bp to 14.9%. Adjusted group operating profit for H1 was £247m (+55%). Engines’ revenue growth of 21% was driven by aftermarket growth of 31%, with the engine repair and defence operations particularly strong. Operating margin increased from 24.5% to 29.4%. Structures’ underlying sales growth was 6%, with the operating margin up from 2.5% to 4.7%. This benefited from restructuring, exiting/repricing certain business and three small disposals.