Engine sales drive Q1 growth at Melrose
Aerospace tech group reported a strong start to the year with its Engines division driving group revenues higher, as it reiterated recently upgraded guidance for the full year.
Revenues were up 8% year-on-year in the first quarter, with Engines sales up 21%, helped by the aftermarket category with risk and revenue-sharing partnerships and repair activities showing above-average growth.
While Engine OE (original equipment) volumes are constrained by industry-wide supply chain issues, the higher profitability of aftermarket business means the division is generating strong margins, Melrose said.
Over in the Structures division, which offers airframe technology and electrical distribution systems for aircrafts, revenues were flat on last year. The company said this was as expected following the planned exit of non-core work and destocking by a major customer as highlighted in its full-year results in March.
Looking ahead, the company expects to deliver a 33% hike in adjusted operating profit to £560m, weighted towards the second half, after lifting its guidance range by 6% to £550m-570m in March.
"We have had a strong start to the year with a particularly good performance from our Engines division. We expect this momentum to continue throughout the year," said chief executive Peter Dilnot.
"Longer term, the group is well positioned to deliver ongoing growth and margin expansion supported by positive end markets and excellent business improvement momentum. We are confident about unlocking significant further potential in the years ahead."
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