15th Nov 2016 08:41
LONDON (Alliance News) - Industrial turnaround specialist Melrose Industries PLC on Tuesday said trading for 2016 remains in line with its expectations, with encouraging signs emerging at its new US acquisition.
In early July, Melrose agreed to acquire heating, ventilation, air conditioning and home appliance products maker Nortek for USD1.44 billion. Melrose operates a business model by which is acquires underperforming industrial businesses, restructures and returns them to health, and then sells them on.
On Tuesday, Melrose said a number of actions to improve Nortek's performance have been carried out in a short space of time, and Nortek is well-positioned to achieve the assumptions about its outlook made when Melrose agreed the acquisition.
So far, Melrose said it has closed Nortek's head office, appointed a new chief executive to run Nortek's Heating, Ventilation & Air Conditioning business and is in the process of shutting down loss-making parts of the group.
Losses from Nortek's Audio, Visual & Control business are also narrowing and a process is underway to cut out unprofitable products across the group, Melrose said.
Brush, an electricity generation company that is Melrose's other asset, has continued to operate against tough markets but its second-half results should top the first, Melrose said.
Still, in order to react to a prolonged downturn in Brush's markets, Melrose said the workforce at the business has been cut by a quarter since the start of the year.
Shares in Melrose were up 4.9% to 176.25 pence on Tuesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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