27th Feb 2026 09:21
(Alliance News) - Aerospace firm Melrose Industries PLC on Friday said it will buy back GBP175 million worth of shares in the next year, after "another strong performance", which saw it beat profit consensus.
Nonetheless, the stock slumped 14% to 550.20 pence, the worst FTSE 100 performer.
Adjusted diluted earnings per share shot up 25% to 32.1p in 2025 from 26.4p in 2024, topping consensus of 31.6p. Melrose swung to a pretax profit of GBP468 million, from a loss of GBP106 million.
Revenue improved 3.5% to GBP3.59 billion from GBP3.47 billion, topping consensus of GBP3.50 billion. On a like-for-like basis, revenue rose 8%.
Adjusted operating profit surged 20% to GBP647 million, climbing 23% at constant currency.
"Melrose delivered another strong performance in 2025. Significant profit growth was driven by increased Engines and Defence demand, together with the positive impact of our multi-year transformation programme reading through. We generated GBP125 million of free cash flow, representing an inflection point for the group, with substantial further increases in cash generation to come. We have positive momentum and are well-positioned to benefit from expected production ramp-ups and ongoing aftermarket expansion. We are therefore confident of further growth in 2026 and achieving our 2029 targets," Chief Executive Officer Peter Dilnot said.
For 2026, it expects an adjusted operating profit outcome between GBP700 million to GBP750 million, at best growth of 16%, so slowing from 2025. It sees revenue between GBP3.75 billion to GBP3.95 billion, representing like-for-like growth of 10% at the mid-point, sharper than 2025's like-for-like top-line hike of 8%.
UBS said the profit biew was slightly below Visible Alpha consensus of GBP754 million.
Birmingham-based Melrose said its guidance "does not factor any impact from any new trade restrictions or tariffs".
Melrose lifted its final dividend by 20% to 4.8 pence per share. The total dividend for 2025 was also up 20% to 7.2p
In addition, it said: "At the end of 2025, we had completed GBP192 million of our GBP250 million 18-month share buyback programme and remain on track to complete the remainder by the end of March 2026. Today we are announcing a new share buyback programme of GBP175 million to be completed by the end of March 2027."
By Eric Cunha, Alliance News news editor
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