1st Aug 2024 10:27
(Alliance News) - Shares in Melrose Industries PLC on Thursday fell as lower 2025 sales guidance appeared to take the shine of results which the company said beat its expectations.
The Birmingham, England-based aerospace firm with Engines and Structures divisions that were formerly part of GKN cut adjusted 2025 revenue guidance to GBP3.8 billion from GBP4.0 billion before to reflect supply chain challenges and disposals.
Shares in Melrose fell 7.5% to 544.53 pence in London on Thursday. The wider FTSE 100 was down 0.3%.
Nonetheless, Melrose said it was on track for 2024 guidance and 2025 profit targets, despite those supply chain challenges.
The company maintained 2024 revenue guidance of GBP3.6 to GBP3.75 billion and adjusted operating profit guidance of GBP550 to GBP570 million.
In the first half of 2024, the pretax loss widened to GBP105 million from GBP62 million, a year prior. Revenue climbed 6.7% GBP1.74 billion from GBP1.63 billion. Diluted losses per share were 6.1p compared with 3.0p. The dividend was increased to 2.0p per share from 1.5p.
Alongside the increased dividend, Melrose announced a GBP250 million share buyback to be completed in the next 18 months.
Engines revenue grew 21% to GBP720 million with adjusted operating profit up 46% to GBP212 million and adjusted operating margin up to 29.4%, the firm stated. The performance was driven by the strength of growth initiatives and the after-market including repairs and defence.
Structures revenue growth of 6% to GBP1.02 billion reflected planned civil destocking offset by defence growth.
Chief Executive Peter Dilnot said: "We have made strong progress in the first half, driven by Engines aftermarket performance and business improvement actions, despite industry-wide supply chain challenges. We remain confident of delivering on our 2024 and 2025 guidance."
By Jeremy Cutler, Alliance News reporter
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