Melrose Industries (LSE: MRO)

Currency in GBP

Last close As at 04/12/2023

GBP5.15

56.40 (12.30%)

Market capitalisation

GBP6,165m

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 reward sharing partnership (RRSP) investments on multiple engine programmes.

As part of the change of strategy to a focused aerospace group, Simon Peckham (CEO) and Geoffrey Martin (CFO) will step down on 7 March 2024 to be replaced by internal appointments: Peter Dilnot, currently COO, will become CEO, and Matthew Gregory, currently CFO GKN Aerospace, will become group CFO. The company has commenced a £500m share buyback programme.

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Industrial Science Device

Sector

Industrials

Equity Analyst

David Larkam

David Larkam

Analyst, Industrials

Key Management

  • Christopher Miller

    Executive Vice Chairman

  • Geoff Martin

    FD

  • Simon Peckham

    CEO

Balance Sheet

Forecast net debt (£m)

1023

Forecast gearing ratio (%)

27

Share Price Performance

Price Performance
% 1M 3M 12M
Actual (2) (13.5) 110.1
Relative 2.8 (9) 100.5
52 week high/low 170.2p/95.5p

Financials

The aerospace cycle is in strong recovery mode and Melrose Industries, assisted by the restructuring actions, is taking full advantage at both the top line and profit level. Internal momentum and market recovery provide confidence that management’s target returns set out for FY25 will be achieved, offering a further positive valuation catalyst.

Y/E Dec Revenue (£m) EBITDA (£m) PBT (£m) EPS (fd) (p) P/E (x) P/CF (x)
2022A 2957.0 292.0 62.0 4.1 111.9 22.1
2023A 3410.0 505.0 288.0 17.2 26.7 12.3
2024E 3605.0 638.0 415.0 26.2 17.5 9.5
2025E 4068.0 842.0 616.0 36.0 12.7 7.1
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