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Currency in GBP
Last close As at 25/03/2023
GBP1.54
▲ 1.00 (0.65%)
Market capitalisation
GBP6,209m
Melrose Industries acquires underperforming industrial companies. It undertakes operational improvements through restructuring and investment before disposing of the assets. Deals are individually financed through new equity (and debt) with proceeds returned in cash post value realisation.
Melrose reported the unaudited results for the demerged Automotive business (to be called Dowlais) with 6% top-line growth, similar to global automotive volumes, and operating profit of £320–330m with margins at 6.3%, up by 0.8%. The Aerospace division traded in line with expectations in 2022 and is experiencing continued strong momentum into 2023. Demerger approval is now expected to be sought in late March.
Industrials
Industrials
Industrials
Industrials
Analyst, Industrials
Christopher Miller
Executive Vice Chairman
Geoff Martin
FD
Simon Peckham
CEO
Forecast net debt (£m)
1211
Forecast gearing ratio (%)
17
| % | 1M | 3M | 12M |
|---|---|---|---|
| Actual | 8.2 | 18.4 | 15.2 |
| Relative | 13.4 | 17.2 | 16.5 |
| 52 week high/low | 165.8p/95.5p |
Melrose Industries’ results highlight that the Aerospace division is recovering ahead of previous management expectations. This should increase the attractions of the new Melrose group post demerger when it becomes a focused aerospace-orientated group. The other half of the demerger, automotive-orientated Dowlais, will offer recovery potential (10%+ margin targets) along with corporate activity expectations.
| Y/E Dec | Revenue (£m) | EBITDA (£m) | PBT (£m) | EPS (fd) (p) | P/E (x) | P/CF (x) |
|---|---|---|---|---|---|---|
| 2021A | 7263.0 | 676.0 | 194.0 | 3.1 | 51.6 | 11.1 |
| 2022A | 8191.0 | 808.0 | 384.0 | 7.0 | 22.8 | 8.3 |
| 2023E | 8912.0 | 963.0 | 547.0 | 10.3 | 15.5 | 6.7 |
| 2024E | 9559.0 | 1150.0 | 722.0 | 13.6 | 11.8 | 5.6 |
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