MRO.L

Melrose Industries Plc
Melrose Industries - Trading Update
18th November 2024, 07:00
TwitterFacebookLinkedIn
To continue viewing RNS, please confirm that you are a Private Investor*

* A Private Investor is a recipient of the information who meets all of the conditions set out below, the recipient:

  1. Obtains access to the information in a personal capacity;
  2. Is not required to be regulated or supervised by a body concerned with the regulation or supervision of investment or financial services;
  3. Is not currently registered or qualified as a professional securities trader or investment adviser with any national or state exchange, regulatory authority, professional association or recognised professional body;
  4. Does not currently act in any capacity as an investment adviser, whether or not they have at some time been qualified to do so;
  5. Uses the information solely in relation to the management of their personal funds and not as a trader to the public or for the investment of corporate funds;
  6. Does not distribute, republish or otherwise provide any information or derived works to any third party in any manner or use or process information or derived works for any commercial purposes.
RNS Number : 5053M
Melrose Industries PLC
18 November 2024
 

18 November 2024

 

MELROSE INDUSTRIES PLC

 

Trading Update

Full year expectations unchanged

 

Melrose Industries PLC ("Melrose" or "the Group") announces the following trading update for the four months from 1 July 2024 to 31 October 2024 ("the Period").  All numbers are calculated at constant currency1.

 

Revenue was up 7%2 on the same period in 2023, with Engines, up 17%3, showing strong progress driven by aftermarket revenues, and Structures growing at 1%2,3, impacted by well-publicised OE volume reductions and previously announced customer destocking.  We continue to partner closely with our major customers to execute efficiently on production schedules, whilst our internal business improvement actions progress as planned.  As a result, adjusted4 operating profit continues to grow on the prior year, in line with our expectations.

 

End market demand continues to be positive, and our full year expectations remain unchanged.

 

Engines

 

The Engines division's revenue performance continues to be driven by our aftermarket business, which is up 32% versus prior year with a particularly strong contribution from defence.  OE volume growth remains constrained by industry-wide supply chain issues.  Looking ahead, the division is well placed to meet the ongoing industry ramp-up from its established positions as well as through new technologies.

 

Structures

 

Revenue in Structures, as previously highlighted, continues to reflect the planned exit of non-core work, customer destocking and industry-wide supply chain challenges affecting OE production rates.   Defence repricing and business improvement actions, which are focused on this division, are coming through as planned.  Restructuring programmes are on track and are nearing completion, which will result in a significant reduction in associated cash spend in 2025.

 

Outlook

 

As we progress through the second half, the Group's full year expectations are unchanged with adjusted4 operating profit at £550 million to £570 million5. Net debt4 is also anticipated to end the year in line with current expectations.

 

In 2025, despite continued supply chain challenges, we expect to make strong trading progress and we are on track to deliver our adjusted4 operating profit target of £700 million1,5.  This performance is expected to be led by the strong aftermarket performance in our Engines division offsetting OE volume constraints. 

 

Importantly, the Group expects its cash flow position to improve significantly next year and to deliver substantial free cash flow in 2025 (post interest and tax).   The Group's cash flow is poised to grow materially beyond this as a result of the completion of our restructuring programmes, the resolution of the GTF powder metal issue, all RRSPs6 generating cash and the continuing growth of the Group's profits.

 

The Group will provide longer term financial targets for the period beyond 2025 at its full year results on 6 March 2025.

 

 

Peter Dilnot, Chief Executive Officer of Melrose said:

 

"It's encouraging that we remain on track to deliver on our full year expectations, despite the industry-wide supply chain challenges.  This reflects the strength of our businesses and the balanced position we have with our aftermarket offsetting original equipment headwinds.  As we move into 2025, we enter a period of significant and sustained growth in our cash flow for many years ahead.  I am confident that Melrose's established capabilities, technology leadership, and unique position on the world's leading aircraft and engines will create substantial value in the future."

 

 

Enquiries:

 

Investor Relations: Chris Dyett +44 (0) 7974 974690, ir@melroseplc.net

 

Media:  Andrew Porter +44 (0) 207 404 5959, melrose@brunswickgroup.com

 

 

 

1 - Provided at a foreign exchange rate of USD 1.25: £1

2 - Growth rates are adjusted for disposals made in the first half of 2024

3 - On a like-for-like basis adjusting for a transfer of business between divisions

4 - Described in the glossary to the Melrose Industries PLC Interim Financial Statements and considered by the Board to be a key measure of performance

5 - Pre-plc costs

6 - Risk and Revenue Sharing Partnerships. Further details on RRSPs can be found on the Melrose plc website.

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
TSTQKPBDOBDDQDD]]>
TwitterFacebookLinkedIn