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Melrose Industries (LSE: MRO)

Last close As at 01/05/2024

GBP6.70

▲ 74.80 (12.57%)

Market capitalisation

GBP8,167m

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.

The civil aerospace market continues to grow strongly. Melrose has been restructuring to deliver improving performance. FY24 EBIT guidance increased by 6%. FY25 remains unchanged, although management emphasised expectations that the key Engines business will see margins over 30% beyond 2025 (current FY25 guidance: 28%). The group is furthering its strategy to develop as a focused aerospace business.

Latest Insights

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Industrials | Flash note

Melrose Industries — Steady climb

Industrials | Update

Melrose Industries — Continued outperformance

Industrials | Update

Melrose Industries — Increasing trajectory

Industrials | Flash note

Melrose Industries — GE partnership expansion
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Sector

Industrials

Equity Analyst

David Larkam

David Larkam

Analyst, Industrials

Key Management

  • Christopher Miller

    Executive Vice Chairman

  • Matthew Gregory

    CFO

  • Peter Dilnot

    CEO

Balance Sheet

Forecast net debt (£m)

1126

Forecast gearing ratio (%)

31

Share Price Performance

Price Performance
% 1M 3M 12M
Actual 7.12 20.46 102.31
Relative 6.71 17.21 107.54
52 week high/low 170.2p/95.5p

Financials

Melrose Industries continues to deliver strong performance improvements and is on track to achieve its ambitious margin targets in 2025 (Engines 28% and Structures 9%). As a focused aerospace group, Melrose is also benefiting from the positive long-term drivers in the sector with record civil order backlog. This bodes well for continued earnings momentum and cash generation to drive shareholder value.

Y/E Dec Revenue (£m) EBITDA (£m) PBT (£m) EPS (fd) (p) P/E (x) P/CF (x)
2022A 2954.0 292.0 89.0 4.1 151.9 30.0
2023A 3350.0 532.0 331.0 19.1 32.6 15.8
2024E 3677.0 699.0 456.0 26.7 23.3 12.0
2025E 4028.0 839.0 575.0 34.2 18.2 9.8

Update

Industrials

Melrose Industries — Aerospace rising

Update

Industrials

Melrose Industries — Accelerating sustainability

Update

Industrials

Melrose Industries — Short-term trading versus long-term value creation

Initiation

Industrials

Melrose Industries — A proven, high-value creation model