Melrose Industries PLC

Latest Results (20.12.2024):

Revenue Growth

In the first half of 2024, Melrose Industries PLC reported a 12% increase in overall Group revenues, reaching £1,742 million. This growth was primarily driven by a 21% increase in the Engines division, attributed to parts repair, defense aftermarket, and the performance of the RRSP portfolio. The Structures division also contributed with a 6% growth, although it was somewhat constrained by supply issues and customer destocking.

Operating Profit and Margins

Melrose Industries PLC achieved a 52% increase in adjusted operating profit, amounting to £260 million for the first half of 2024. The operating margins improved by 420 basis points to 14.9% (pre-PLC costs), driven by sales growth, business improvements, and a favorable aftermarket mix. This performance was ahead of the company's expectations, showcasing strong operational progress.

Net Debt and Leverage

As of the end of June 2024, Melrose Industries PLC reported a net debt position of £976 million, which was better than anticipated. The leverage ratio stood at 1.7x, reflecting the company's efforts in funding growth, ongoing restructuring, and share buybacks. This financial position indicates a disciplined approach to capital management while pursuing strategic initiatives.

Dividends and Share Buyback

Melrose Industries PLC declared an interim dividend of 2.0 pence per share, marking a 33% increase compared to the previous year. Additionally, the company announced a further £250 million share buyback program over 18 months, demonstrating its commitment to returning value to shareholders while continuing to invest in organic growth opportunities.

Outlook and Strategic Initiatives

Looking ahead, Melrose Industries PLC remains confident in delivering on its 2024 and 2025 guidance, despite ongoing supply chain challenges. The company is focused on its long-term growth strategy, which includes double-digit EPS growth and improving cash flows post-restructuring. Strategic initiatives such as the expansion of the Engines division and the successful disposal of non-core businesses are expected to drive future profitability and market position.