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TOP NEWS: Melrose Industries "delighted" with results before spin-off

2nd Mar 2023 10:54

(Alliance News) - Melrose Industries PLC on Thursday reported a narrowed annual loss and a rise in revenue, and it said preparations for spinning off part of GKN have progressed well.

Birmingham-based Melrose aims to buy, improve and sell industrial companies.

Revenue for 2022 was GBP7.53 billion, up 13% from GBP6.65 billion in 2021. This is compared to revenue consensus of GBP7.74 billion, cited by the Financial Times.

Pretax loss narrowed to GBP307 million from GBP660 million, while adjusted pretax profit nearly doubled to GBP384 million from GBP194 million a year ago. Net operating expenses were reduced to GBP1.36 billion from GBP1.43 billion.

In Aerospace, revenue was GBP2.96 billion, up from GBP2.54 billion, with an operating margin of 6.3%, up from 4.4% in 2021.

Chair Justin Dowley said: "We are delighted with these results, and everything is on track for the demerger. We consider a restructured Aerospace business to be one of the best businesses Melrose has ever owned. We are confident that a combination of restructured and refocused high-class Engines and Structures businesses, and overall aerospace market recovery, positions these businesses for a significantly better-than-expected performance in 2023 and beyond."

The so-called DemergerCo consists of the Automotive, Powder Metallurgy and Hydrogen businesses of GKN. Melrose bought the UK engineering firm in 2018 in a hostile takeover. Back in September of last year, Melrose said it planned to retain the Aerospace part of the GKN business and spin-off the rest as a separate London listing.

In January, Melrose said the combined DemergerCo businesses recorded GBP5.20 billion in revenue in 2022, up 6% at constant currency rates. Operating profit was between GBP320 million and GBP330 million, up 21%. The operating margin was 6.3%, which Melrose said was up from 5.5% in 2021.

Melrose declared a second interim dividend of 1.500 pence, giving a full-year payout of 2.325p per share, up 33% from 1.750 pence the year before.

Shares were up 1.8% at 156.75 pence each on Thursday morning in London.

By Xindi Wei, Alliance News reporter

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