3rd Mar 2016 08:38
LONDON (Alliance News) - Melrose Industries PLC said 2016 could be an "exciting year" for the business, and expressed confidence in identifying a suitable acquisition target, as it reported a swing to a pretax loss from continuing operations for 2015.
The FTSE 250-listed manufacturing business buyer reported a pretax loss of GBP30.7 million, swung from a restated pretax profit of GBP12.5 million in 2014, as revenue fell to GBP261.1 million from GBP324.3 million. The company's 2014 results were restated to include results from businesses that were sold within discontinued operations.
During the year the company returned GBP200.4 million to shareholders after the sale of its Bridon business in November 2014, and then completed the sale of its Elster business to Honeywell International Inc for GBP3.3 billion, representing a 2.3 times return on shareholders' investments, according to Melrose.
Elster had contributed GBP1.11 billion in revenue during 2015, and the company reported a profit from discontinued operations of GBP1.42 billion, up from GBP186.5 million in 2014.
Melrose outlined plans to return around GBP2.4 billion to shareholders from the Elster sale in February.
The company's remaining business, Brush Turbogenerators, faced a "challenging year", Melrose said. Brush manufactures electricity generating equipment for the power generation, industrial, oil and gas and offshore sectors. Melrose said the focus for this business will be driving efficiency and maintaining a firm control on costs.
Melrose expects the end-market for Brush to remain challenging in 2016, but believes the focus on new product development and continued operational improvements places Brush well for any uplift in the market.
"Having successfully sold Bridon and Elster, we have more than doubled the value of shareholders' equity in both investments and returned GBP2.6 billion in cash to shareholders. This has been an exciting 12 months for Melrose and one that yet again demonstrated the ability of the team to create significant value for investors through our 'buy, improve, sell' model," said Chairman Christopher Miller in a statement.
"We remain focused on our search for an acquisition opportunity that will put this proven formula to work once again and will further increase the GBP4.3 billion in cash that we have already returned to investors since our first acquisition in 2005. With valuations looking increasingly attractive, we are confident in our ability to find the right deal at the right price and we look forward to inviting investors to participate in this next project in due course," Miller added.
Shares in Melrose were up 1.2% at 339.00 pence Thursday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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