31st Jul 2026 11:32
(Alliance News) - Melrose Industries PLC on Friday reported a sharp fall in statutory first-half profit after being hit by foreign exchange losses and costs related to an incident at its Garden Grove facility.
The Birmingham, England-based aerospace and defence company maintained its underlying full-year guidance despite the setback.
Pretax profit fell to GBP89 million in the six months ended June 30 from GBP379 million a year earlier, while diluted earnings per share dropped to 6.0 pence from 22.2p.
Revenue increased 10% to GBP1.87 billion from GBP1.72 billion, while adjusted operating profit rose 16% to GBP347 million and adjusted operating margin improved to 18.5% from 18.0%.
Statutory operating profit fell to GBP154 million from GBP441 million, primarily reflecting unrealised losses on foreign exchange derivative contracts.
The company increased its interim dividend by 13% to 2.7p per share from 2.4p.
Chief Executive Peter Dilnot said Melrose delivered a "good performance" in the first half, with operational improvements and strong commercial momentum supporting higher profit and free cash flow.
The Garden Grove chemical tank incident in May reduced first-half revenue by GBP16 million and adjusted operating profit by GBP9 million. Melrose said the site has resumed partial production and is expected to operate at around half of its normal capacity until full production resumes.
The company expects to incur a further GBP25 million to GBP30 million of exceptional costs in the second half related to the incident. It has paused its GBP175 million share buyback programme pending greater clarity on the financial impact, including regulatory and legal proceedings.
Excluding the impact of the Garden Grove incident, Melrose left its full-year guidance unchanged, continuing to expect revenue of GBP3.75 billion to GBP3.95 billion and adjusted operating profit of GBP700 million to GBP750 million.
Shares in Melrose were down 2.7% at 462.50 pence in London on Friday morning.
By Eva Castanedo, Alliance News senior economics reporter
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