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Melrose says trading ahead of expectations, upgrades 2023 guidance

16th Nov 2023 09:27

(Alliance News) - Melrose Industries PLC on Thursday said it is trading ahead of expectations with strong revenue growth, allowing it to upgrade its full year guidance for 2023.

In the four months that ended October 31, the Birmingham, England-based manufacturer said it had revenue growth of around 18% during the period, with underlying demand higher.

Melrose said margin performance was "substantially better" than expectations, driven by higher aftermarket demand and pricing, alongside the successful delivery of operational improvements,

Engines revenue was up 18% with adjusted operating margins over 25%, while Structures revenue was up 17% with adjusted operating margins haven risen above 4%, ahead of previous guidance.

Looking ahead, it expects 2023 revenue of between GBP3.3 billion and GBP3.4 billion, down from GBP7.54 billion in March. It expects this to increase to between GBP3.5 billion and GBP3.7 billion in 2024.

Melrose said it has upgraded 2023 profit expectations by around 7%, more than doubling profits compared to last year, which it said reflects ongoing confidence in the performance of the business, with Engines full year margins now expected to be 25% and Structures margins 4% or more.

It expects 2023 Aerospace operating profit of between GBP400 million to GBP410 million, multiplied from GBP186 million in 2022, with an adjusted operating margin of around 12%.

In 2024, it expects Aerospace operating profit of between GBP520 million and GBP540 million with an adjusted operating margin of around 15%.

Shares in Melrose were up 0.5% to 535.00 pence each in London on Thursday morning.

By Greg Rosenvinge, Alliance News senior reporter

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