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 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

Industrials |
Update

08.03.24

Melrose Industries — Continued outperformance

Industrials |
Update

17.11.23

Melrose Industries — Increasing trajectory

Industrials |
Flash note

07.11.23

Melrose Industries — GE partnership expansion

Industrials |
Update

24.10.23

Melrose Industries — Engine for growth

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Sector

Industrials

Equity Analyst

David Larkam

Analyst, Industrials

Key Management

Christopher Miller

Executive Vice Chairman
Geoff Martin

FD
Matthew Gregory

CFO
Peter Dilnot

CEO

Balance Sheet

Forecast net debt (£m)

1126

Forecast gearing ratio (%)

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 reported FY23 organic growth of 17% (13% including business being exited) and operating margins improved from 5.0% to 11.6%, driving a 165% increase in EBIT. Engines reported 16% growth, with margins up from 15.7% to 26% driven by strong aftermarket business. Structures reported organic growth of 18% (12% including business being exited), driven by civil with margin increased from 1.3% to 5.1% due to restructuring, contract repricing and volume benefits. Net debt was £572m, excluding finance leases and after £93m of the current £500m share buyback programme, with net debt/EBITDA at 1.1x.